Fractured House struggling to agree on a path forward
State Director Thor Stacey reports from Juneau on legislative activities up to March 14
The session is finally in full swing with budget subcommittees meeting in both the House and Senate as they consider Gov. Mike Dunleavy’s proposed department budgets.
The governor also has his cabinet designees under consideration in House committees while appointments to various boards and commissions are being considered in both the House and the Senate. The governor has also introduced 26 different pieces of legislation, which the Legislature has been slow to hear—outside of his amended budget proposal and criminal justice reform.
Most of the governor’s legislation has to do with his budget proposals. Good examples are the repeal of the municipal share of fish taxes or the repeal of school debt reimbursement. At some point, NFIB expects to see legislation to raise user fees for certain state services.
All in all, the governor’s budget plan requires legislative action on legislation designed to divert certain revenue streams away from communities and back to the general fund.
Members of the Dunleavy administration have also made it clear that the administration is preparing to roll out some pro-private-sector policy reforms that can be accomplished by executive action, outside of the legislative process. We will likely see a series of administrative actions after the cabinet has been confirmed and seated.
In other news, the governor traveled to Houston to promote Alaska’s oil and gas leases and there are plans in the works to travel around the state and promote his vision for the state budget.
In the Senate
Senate committees are hearing some pieces of legislation while maintaining an overall focus on the budget process. The Senate Finance Committee has introduced a “committee substitute” (CS) for the governor’s budget that essentially reforms the proposal but does not change any of the dollar amounts. This change signals that the Senate has rejected the alternative budget format put forward by OMB in the governor’s amended proposal.
The Senate remains focused on supporting the organization of the governor’s cabinet, addressing criminal justice reform, and addressing the state’s fiscal situation. The Senate also remains stymied in its forward progress by the late-to-the-party House.
Video of the Senate Finance Committee’s March 6 and March 7 meetings can be watched here and here. Presentation material for the March 6 hearing is available here and for the March 7 hearing here.
The short synopsis is that cutting state spending will have economic deleterious impacts on the economy. The governor hopes to encourage new private sector activity while paying large dividends to account for government dollars circulating in the economy. The slightly different perspectives offered by the governor’s economist and the Institute of Social and Economic Research at the University of Alaska Anchorage is illustrative of debate that will occur between the legislative bodies and the governor’s office on the best path forward on Government spending. Expect the Senate to seek to pay small dividends while maintaining a much higher level of state spending than the proposal put forward by the governor.
In the House
The House committee process is now in full swing but the majority remains fractured with leadership struggling to coalesce around a definitive path forward on the budget and its legislative agenda. In the short-term House members have traveled to their districts (Senate members as well) to participate or facilitate meetings with their constituents. Various House members and committees have also encouraged public testimony on issues such as the marine highway and education funding.
The House prefers to use former Gov. Bill Walker’s budget as a starting point for its budget process. This will likely materialize and will mean that Governor Dunleavy, the Senate, and the House all have different perspectives on where to start the budget process. House leadership would like to close out its budget sub-committees on March 22 but that deadline is soft. The House has a goal of moving its version of the operating budget to the Senate by the 90th legislative day. Given the fractious nature of the House leadership coalition, NFIB thinks it is unlikely it will move a budget by its target date of April 14.
Legislation
We can expect the House to hear and move some of their members’ personal legislation this year—inspite of the need to focus on the budget. NFIB finds it highly unlikely that the standing committees will be able to sit idly by while the Finance Committee works on the budget. Once the finance sub-committees close out, we will get a sense of the House’s appetite for hearing and moving their own, non-budget related bills.
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