Lowered expectations

It's time to start looking at what's realistic this session.

Good morning, Alaska! Today is Day 70 of the 32nd Legislature, the #GavelClassic guesses have been locked in and shout out to the source who bet me that Department of Administration Commissioner Kelly Tshibaka would be out of state government before the end of session.

As a friend of the newsletter/blog often reminds me: Former Ruby Republican Sen. John Sackett once said of the Legislature, “How you organize determines the outcome.” He was specifically talking about impeaching Gov. Bill Sheffield, but it’s a worthy point. Just what a Legislature will accomplish largely comes down to who controls the majority of votes on Day 1 of session. It still holds up nearly 40 years later, but perhaps in ways that I hadn’t considered. While I had been applying that thinking to the kind of policy decisions we’ll see by the end of session, it also applies to whether those decisions will be made at all. With the Legislature about as evenly divided as it’s ever been, the governor’s strongest-in-the-nation veto power looms so large that he can effectively box in the range of potential outcomes. On budget items, the Legislature needs a whopping three-quarter majority to override the governor (45 of the 60) and a two-thirds majority to override non-budget vetoes (40 of 60). We saw just how this plays out with attempted override of Year One Gov. Mike Dunleavy.

This year, it means the veto pen is almost certainly aimed at any and all revenue measures that the Legislature, which is already as evenly divided as possible, can manage to scrape together. He demands the Legislature first put to the voters a slate of constitutional amendments (that’d also conveniently be on the ballot alongside him) that would further box in the Legislature—requiring taxes be approved by both the voters and legislators, constitutionalizing the dividend and implementing a strict spending limit. While there’s more interest in digging into the Legislature’s financial situation and structural deficit than in recent years, there’s gotta be a point where legislators ask themselves: What’s the point?

What’s the point of expending the political capital in pushing an incredibly divisive measure like an income tax or sales tax that’s destined to be vetoed? It’s one thing to expend the political capital doing the right thing and another to expend that political capital teeing up your chief political opponent’s re-election strategy. I’ve been hearing more and more thinking along that line, a mixture of frustration and resignation that legislators’ hands are effectively tied on the solution and that the state is bumbling its way into yet another several years of deficit spending.

Gov. Dunleavy has effectively taken many options off the table and as much as legislators are loathe to admit it, it’ll have an impact on how things move forward for the rest of session. Not what should be done, but what’s doable? Legislators will once again find themselves in the unenviable place of playing defense. Defending the state’s dwindling reserves, defending the Alaska Permanent Fund’s health and defending what state services are left. The influx of the American Rescue Plan’s relief dollars helps take the pressure off the near-term, potentially giving the state some cushion in the budget for several years, but it’s not a solution.

What legislators can do this year is continue to lay out a convincing case for something to be done. They can start doing the work to understand how new revenues can be generated equitably, fairly and with minimized economic impact. Even if Gov. Dunleavy wasn’t standing in the way of solution’s to the state’s budget, we don’t really have a good understanding of how new revenue would impact Alaska. To that end, the House Ways and Means Committee is set to hold its first hearings this week—overviews with state revenue and spending, the 10-year fiscal plan, revenue projections and the Alaska Permanent Fund—as it gets to work on its job of focusing in on the state’s financial picture.

On the agenda

As always, find the full agenda here but here’s what stands out to me:

  • 1 p.m. Senate Finance Committee — Hearing on SB56/HB76 regarding the extension of the covid-19 disaster emergency. After the House passed an all-in extension last week, the Dunleavy-aligned Senate is likely to pare the bill back. This’ll start the showdown between the House and Senate over the scope of the bill with the House particularly keen on getting the legislation in place by the April 1 deadline needed to keep SNAP benefits unaffected for the upcoming month.

  • 1 p.m. House Judiciary Committee — Hears HB 57 by Rep. Josephson dealing with the funds subject to the CBR sweeps (a big issue given the adminsitration’s desire to sweep several funds that were once considered exempt); HB 29 by Rep. Rauscher on electric utility liability for vegetation management.

  • 1:30 Senate Judiciary Committee — The confirmation hearing with Attorney General-nominee Treg Taylor is expected to continue today. Sen. Lora Reinbold said she wants to drill down on Taylor’s lack of experience in criminal law (something most Alaska Attorneys General do not have). Also on the agenda are Sen. Wielechowski’s SJR 1 to constitutionalize the dividend and Sen. Micciche’s SB 9, the hard-luck attempt to update Alaska’s alcohol laws (now in its fourth session)

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