The Budget Bully
"Is that the message from administration ... we stand up and salute or we get our budget vetoed?"
Good evening, Alaska!
In this edition: We’re getting back into legislative news with a trip to the Senate Finance Committee, which is raising some serious concerns about Gov. Mike Dunleavy’s latest attack on the separation of powers; and we can’t totally break from redistricting, so I’ve got a recap of the East Anchorage arguments.
Spice level: 🌶️🌶️
Mike Dunleavy, the Budget Bully
Over the past three years, Gov. Mike Dunleavy and his administration have tried and mostly failed to exert their political will over the Legislature, the court system and Alaskans with just about any tool at hand. They’ve attempted much through novel readings of the law and loyalty pledge firings that have netted little more than a string of lost courses cases and settlements. One of the governor’s favored and, frankly, most effective tools to bend others to his will has been the budget. He doesn’t command the numbers in the Legislature to get his budget approved, but he does have the numbers to stymie any efforts to override his vetoes, which he’s used with gusto. He’s used that political reality to bleed the University of Alaska, undermine the Alaska Marine Highway System and slash dozens and dozens of other programs ranging from foster care services and legal services for victims of domestic violence to the state’s tourism marketing budget. In most cases, the vetoes cut the budget passed by the Legislature back to the budget the governor initially proposed. In some cases, the governor has wielded his veto pen as a cudgel against the other branches of government.
The prime example being his $334,700 vetoes to the Alaska Court System over its ruling that struck down an anti-abortion law. The action served as a plank for the Recall Dunleavy campaign and spawned a lawsuit that landed the governor with another ruling that found he had violated the separation of powers by attempting to exert his political will over the courts through the budget.
But if you think he would’ve learned, then I’ve got a bridge, a dam and a small-diameter natural gas pipeline to sell you.
In last year’s round of vetoes, the governor saw fit to eliminate the Legislature’s entire $1.9 million budget for per diem. It being legislator per diem meant it didn’t raise nearly as many alarm bells as the rest of his vetoes, but it raises the same questions and concerns about the governor’s willingness to bully through the budget.
Those concerns were voiced today when the Senate Finance Committee hosted Dunleavy budget director Neil Steininger to discuss the supplemental budget. The supplemental is a fast-track budget intended to close unforeseen budget gaps in the current year, like forest fires and the restoration of Dunleavy vetoes that everyone knew were unattainable (the formula-driven Medicaid being the main one). This one contains the Legislature’s per diem for the current year.
“Is there a reason for that?” asked Sen. Bert Stedman, the co-chair of the Senate Finance Committee who’s grown particularly pugnacious with the administration.
“To ensure that per diem can be paid to legislators,” Steininger replied, attempting to hurry through what was set to be an uncomfortable topic of discussion.
“What was the reason for the veto?” Stedman asked.
“Chair Stedman,” Steininger replied, “the veto was made as part of the governor’s deliberation on veto items. The veto was made effectively because there was no action on critical issues of the state and the governor, you know, sought to draw attention to that through the veto.”
That specific inaction being the Legislature’s refusal to overdraw the Alaska Permanent Fund to pay out the dividend Dunleavy was seeking and refusal to pass a slate of constitutional amendments dealing with the PFD and strict limits on the Legislature’s ability to tax and spend. It’s also the first time, to my knowledge, that any reason—let alone such a nakedly partisan reason—was given for the veto. The governor’s veto documents, which are typically the place to explain the reasoning for his actions, contained only “Veto of session per diem for legislators” for explanation. They couldn’t even be bothered to muster up a half-hearted explanation of tightening budgets or right-sizing government.
(And, if we’re getting overly pedantic about it, that’s not even correct because it didn’t veto only session per diem but the entire per diem budget.)
Just why any of this matters when griping about legislator compensation is in vogue, was quickly laid out by Stedman. The governor’s attack on the Legislature’s budget is unprecedented, representing an interference with the basic operational capacity of a co-equal branch of government in service of undermining its political independence in achieving political goals. And, more importantly, is it the new normal?
“So then, am I to assume that if we don't agree with everything the governor asks, we’re going to have this repeated? … Is that the message from administration, we overdraw or stand up and salute or we get our budget vetoed in the Legislature? … Are we to assume that our budget is going to get vetoed in part or in full if we don't agree to a constitutional change to diminish our authority in the legislative branch of government?”
Steininger replied that the administration isn’t pushing for an overdraw of the Alaska Permanent Fund this year. When pressed again and again on whether the administration would wield the budget against the Legislature if it didn’t get into line, Steininger refused to give a clear answer. Instead, he reiterated that the Dunleavy administration is focused on getting those constitutional amendments—which requires a vote two-thirds threshold, a laughably high bar—on the ballot.
“That is the message that the administration is trying to send,” he said.
To Stedman, the message was clear that the Dunleavy administration is no longer playing by any semblance of the rules that have guided the state:
“I think it's clear that we either avidly agree with whatever policy proposals come out of the administration or our budget is subjected to review and reduction. That message came across loud and clear. … Over the years no matter who the governor is or was and no matter what policy direction they wanted to take the state, they would submit their budgets to the Legislature, and we would basically agree with them even we adamantly disagreed with the governor. We had our legislative budget submitted along with the court's. There was virtually nonexistent crossing over to the other lanes.
“It's clear with this administration that there are no rules. There are no sideboards, and the 40 years of precedence means nothing. It is a problem and how we work through it, time will tell, but it is pretty clear that in the creation of three branches of government, one branch isn’t going to have the authority over all the other branches because they don’t get what they want to go ahead and do budgetary penalties against them.”
Sen. Donny Olson, D-Golovin, also put a fine point on it, arguing that the governor’s strong-arming of the other branches is starting to look eerily familiar to the final days of President Donald Trump’s time in office.
“What I'm perceiving is that we're slowly gravitating toward a more totalitarian perspective where we have an administrative branch that appears almost Trumponian in style,” he said. “The big concern that I have is this next election coming up, should we be expecting another Jan. 6 insurrection outcry by the people who didn't win this election? The people in my district are concerned that there's going to be something nasty that happens down here ... I see things gravitating toward a more chaos iron-rule attitude.”
In the big picture: Even considering the Senate Finance Committee’s rocky relationship with the administration, this is some of the most serious allegations I’ve heard them level at the governor. And they’re not wrong. The governor’s decision to veto legislative pay combined with Steininger’s admission that it was politically motivated has no significant difference from the unconstitutional vetoes leveled at the Alaska Court System. This bad blood is going to be important to keep in mind as the budget comes together.
After all, Dunleavy can cut spending with his veto pen. He cannot increase it.
Follow the thread: The Senate Finance Committee tackles the supplemental budget
East Anchorage in the rearview
The East Anchorage case focuses in on the Alaska Redistricting Board’s decision to divide the two Eagle River house seats into two different Senate districts, effectively spreading out the political influence of the deep-red district over the JBER district and the South Muldoon district. At the heart of the argument is that Eagle River’s best pairing is with Eagle River, not with communities that are separated by a 15-minute drive on the highway or, in South Muldoon’s case, the largely unoccupied Chugach Mountains that require a 15-minute drive on the highway and a drive through the North Muldoon district to connect the two.
This is the one major area where the board faced serious internal division. The board’s conservative trio—John Binkley, Bethany Marcum and Budd Simpson—bulldozed over the objections raised by board members Nicole Borromeo and Melanie Bahnke that the pairings ignored the racial makeup of East Anchorage. It resulted in Bahnke and Borromeo signing onto the final report in protest (after Binkley suggested they not be allowed to sign at all).
The legal arguments here are tricky, however, because previous cases have granted broad latitude for how the board determines socioeconomic integration—finding, effectively, that anything within a municipality is automatically considered to be integrated—and particularly when it comes to Senate pairings. Here, the East Anchorage plaintiffs argue that the connection over the Chugach Mountains, which would require voters to pass through two other Senate districts, is out of line with the Alaska Constitution’s requirements for contiguity. They also point to the Alaska Constitution’s requirement of watersheds to be taken into account when drawing boundaries as further reason to invalidate the Senate pairings.
There’s also a fair number of allegations that the board violated the public process here. The biggest point of contention is the board’s swift approval of the final Senate pairings after a closed-door meeting that spanned two days. That the plan shifted from what was agreed upon when entering the closed-door meetings and that there was never any on-the-record justification or explanation for the pairings has also continued to hang over the process.
The expedited rate of the trial has made things difficult for all plaintiffs, but particularly so for the East Anchorage plaintiffs. They were first to go during the trial, which got underway before the full scope of discovery had been completed. At issue here is a series of emails that the board had claimed attorney-client privilege over but were eventually released to the plaintiffs. It’s these emails along with some other data produced by the board that caused the East Anchorage plaintiffs to attempt to amend their complaint to include race-based discrimination in the lawsuit. The motion was ultimately denied, but Judge Thomas Matthews allowed in some additional testimony on these issues.
What they’re seeking: The main ask here is that Eagle River be paired with Eagle River. They’re less prescriptive when it comes to what happens to the South Muldoon House seat but have suggested it be paired with the North Muldoon seat. Any change here, would likely result in a reshuffling of Senate pairings that could affect the rest of the city.