Much work remains for state budget that’s seen few changes so far

There have been relatively few large changes to the Gov. Mike Dunleavy’s proposed budget in the first step of the Legislature’s annual budget process. 

Public testimony is planned for Alaska House Finance Committee meetings on Thursday, Friday and Saturday. The committee is considering the changes recommended by 16 budget subcommittees that closed out their work in late March. 

While there have been some significant changes to what Dunleavy proposed, they’re far less extensive than the changes two years ago. That’s when lawmakers rejected the deep cuts to services that Dunleavy proposed to pay for $3,000 permanent fund dividends under the formula in a 1982 state law.  

This year, House members looking at the Department of Law budget recommended rejecting the administration’s proposal to shift the cost of prosecuting misdemeanor crimes to home-rule municipal governments. 

Home-rule municipalities have the authority to write their own misdemeanor laws. Anchorage and Juneau have, so they’re already paying for their own prosecutors. And the North Slope Borough pays the state. But other municipalities aren’t. 

Deputy Attorney General John Skidmore, who heads criminal prosecutions for the state, referred to a line from Spider-Man when he explained the reasoning behind the administration’s proposal at a March 5 subcommittee meeting. 

“With great power comes great responsibility,” Skidmore said of home-rule municipalities. “They have the power to do this for their citizens, and the argument then is that there is some responsibility that would go along with it.”

But the proposal raised concerns with municipalities. Seward’s acting police chief Alan Nickell told legislators on March 12 that his city already has a large deficit. 

“In a time where everyone is hurting for money, following the pandemic, this is not the time to make it harder for anyone,” Nickell said. 

The Department of Law subcommittee recommended restoring $1.29 million in state funding for misdemeanor prosecutions. 

Another significant change was the addition of $1 million for the Redistricting Board. It will draw the map that will determine who controls the Legislature for the next decade. 

The board will be working later than normal. It won’t draw the map until the fall this year because the census numbers are being delayed by the pandemic. In addition, the board generally has to pay to defend itself against lawsuits over whatever map it comes up with. 

Dunleavy has again proposed paying for full PFDs under the traditional formula. Instead of paying for them with cuts to services, he proposed drawing more than planned from the Alaska Permanent Fund’s earnings reserve account. Some lawmakers are concerned that doing that would lead to drawing down the permanent fund in the future. 

None of the House subcommittees focused on the PFD amount. 

The budget process is later than normal because the House majority caucus took a month to organize. That makes it virtually impossible for the Legislature to finish its work in 90 days.

Not counting two sessions when the Legislature immediately went into a special session, it’s only had two 90-day sessions since a voter-passed initiative went into effect in 2008 saying that sessions should be 90 days. The state constitution allows sessions to last up 121 days. This year, the 90th day will be April 18, and 121st will be May 19. 

Along with the PFD, another major uncertainty left in this year’s budget is how the state will spend more than $1 billion it’s receiving in American Rescue Plan Act money. Federal guidance on how to spend it will be available May 10, nine days before the deadline to end the session.