The Legislature's long-shot fiscal plan comes into very blurry focus

It's not really a fiscal plan or even the bones of a fiscal plan, but at least the foundation is being considered.

Happy Friday, Alaska!

In this edition: It’s starting to look like achieving a full fiscal plan for the state of Alaska in three weeks is actually pretty tough (especially when some folks refuse to do the required reading), an update on the the second-to-latest lawsuit spawned by the Dunleavy administration, the latest on the Department of Law’s latest scandal, a particularly sharp APOC ruling, the reading list and the weekly watching.

Programming note: Friday in the Sun will be a Saturday in the Sun sort of week. After skipping out on last week’s edition, I actually have a fair amount of stuff in the hopper. Keep an eye out for it midday tomorrow.

A long-shot fiscal plan

After plodding around for a couple weeks, the Legislature’s Fiscal Policy Working Group—the eight-member, bicameral team established as part of a deal with some House Republicans to avoid a shutdown—looks like it’ll be throwing things into… second gear next week, with more than two meetings on the agenda and an abbreviated public-testimony roadshow to lead into the Aug. 2 special session on the budget, the PFD, revenues, PCE, constitutional amendments, etc. The initial hearings have covered scintillating topics like the history of the state’s revenues and expenditures, the state’s retirement system and a brief overview of the proposed constitutional amendments dealing with the Alaska Permanent Fund. They’ve not made for the most consequential hearings in the world but have at least given us all a pretty good handle on who is and isn’t doing the required reading (which’d be the House Republicans who demanded we set up this committee in the first place).

On the one hand, the whole thing has loads of people scratching their heads about what’s going on here as it’s not immediately clear how a hearing on the state’s retirement accounts gets the state to a fiscal plan. But on the other hand, the hearings have done a good job at keeping a lid on things while also quietly making some important points about how some of the far-right’s fanciful thinking (like diverting the earnings from the state’s pension to the budget) is a bad idea. Side note: I’ve heard that a handful of pro-PFD protestors have showed up raring to give legislators a piece of their mind to find themselves sitting through hours about intricacies of retirement accounts and investment risk.

Anyways, the closest we’ve got to any real sense of direction out of the committee was some closing comments from co-facilitator Sen. Lyman Hoffman, D-Bethel, during Thursday afternoon’s meeting. Here’s his points summed up:

  • The plan should have some room for emergency funding. Whether that be some funds diverted into the Constitutional Budget Reserve (where it’d need a three-quarter vote to spend) or socked away in some other fashion, Hoffman said many legislators are unwilling to lock the state’s budget in with little room for error.

  • If the Legislature ultimately agrees to pay out larger dividends—a move that would require the Legislature to also implement either cuts or taxes, which from a practical standpoint would take considerable time to implement—then Hoffman suggested a stepped approach. It sounds like there’s little traction for Gov. Mike Dunleavy’s proposed plan of “Big PFD now, $500 million in unspecified cuts and taxes… eventually,” and Hoffman suggested the size of the dividend grow as those revenues and/or cuts come online. He pegged the number for the initial dividend in the $500 range.

  • “If it comes to be 50-50, then we need to look at giving serious consideration into when the effective date of that is and how do we get there. Most importantly, I think that coming up with the number is going to be the most important question, but to get there is going to take a lot of dialogue by this committee. I think … members (should) start contemplating where you might go, how large of a deficit, where we would get the $1.8 billion to afford that number. If it's higher than that or lower than that, we also need to address that question.”

Why it matters: Sure, it’s been a pretty uneventful couple weeks as far as committee hearings go, but let’s be honest that it was always going to be a long-shot that a plan would come together during a committee hearing. Hoffman’s comments give us a good look into what folks are talking about behind the scenes and, frankly, make for one of the best/only pitches to bridge the various opposing viewpoints on the budget and state’s fiscal direction. Settling the size of the dividend is the most critical question in front of the Legislature, which will trickle down to everything else, but it’s not enough to simply put whatever figure that is into action without resolution on who pays.

What’s next: Next week’s schedule will kick off with a pair of hearings, agenda to be determined, as well as a quickfire series of public hearings starting in Anchorage on Thursday evening. From there, they’ll go to Mat-Su on Friday, Fairbanks on Saturday and then hold a hearing in Juneau where folks can also call in from around the state on Monday.

The special session is set to start on Aug. 2.

The practical goal

Anchorage Superior Court Judge Herman Walker Jr. heard oral arguments today in the maybe-lawsuit over the operating budget’s effective date. The core of the case is whether or not budget bills require an immediate effective date (which requires a two-thirds supermajority vote) to, well, be immediately effective. But before they’ll even get to that, the court will have to decide if the entire case is itself constitutional. The governor is barred by the Alaska Constitution from suing the Legislature, but the question here is whether the Attorney General—who was acting on orders of the governor—suing the Legislative Affairs Agency is the same thing or, in fact, a clever legal workaround.

The state argues it’s different and also you’re not supposed to look at all the news releases and public statements of the governor and Attorney General Treg Taylor that, essentially, said they’re working to sue the Legislature to decide the issue.

The attorney for the Legislative Affairs Agency argued that the legal workarounds largely don’t matter and that the court needs to look at “the practical goal of the action.” He said it’s clear that governor is trying to sue the Legislature to determine a constitutional issue and therefore the entire case should be barred on those grounds.

As always, it’s hard to suss out what Judge Walker may do with this case. He’s already told them that the underlying issue would override the fact that the issue of the effective date is moot given the Legislature’s ultimate passage of the bill, but just how he might rule on the issue of the lawsuit’s constitutionality is less clear. He said he’s planning on issuing a decision sometime next week.

Cicotte off the job… for now

In response to the bombshell news from The Guardian that Assistant Attorney General Matthias Cicotte was running an anonymous Twitter account that was deeply bigoted, racist, antisemitic and perhaps even a little secessionist, the Department of Law today announced Cicotte “has been removed from his caseload and his status with the department is subject to change at any time as the investigation continues.”

Critics and opposing attorneys have generally argued that Cicotte shouldn’t necessarily be fired because of the account alone, but have raised questions about whether his racist, homophobic, transphobic and antisemitic viewpoints have affected his work, which has recently largely dealt with the Department of Corrections.

$52,650

That’s how much the Alaska Public Offices Commission’s staff has recommended in fines for the several egregious campaign finance errors and gaps committed by Anchorage Mayor Dave Bronson on the campaign trail. The agency has found several errors or gaps in pretty much every single financial disclosure report his campaign filed as well as several over-the-limit contributions. In a somewhat remarkable move for APOC, the staff recommends the enforcement of the full statutory fines.

“After wading through (Bronson for Mayor’s) utterly confusing reports for many days, it is clear to staff that the public had no idea of what was going on in the (Bronson for Mayor) campaign until well after the April 6, 2021 election and the May 11, 2021 runoff elections,” concludes the report. “Under all the circumstances staff recommends no reduction to the civil penalty in the case.”

I’ll have a more complete break-down of this report for the blog early next week. Find the full report here.

Reading list

The Olympics!

The Olympics are underway! Let’s take a look at one of the worst Olympic races, per Secret Base’s “The Worst” series (which has some seriously good binge-worthy videos).

Have an nice weekend, y’all.