There are just three days left until the constitutional session limit, and a budget deal is still not in place. In fact, the conference committee for the budget was just finalized today. The sequence of events that got us to this point are equally complex, bizarre, and essentially unprecedented. But most of all they are very loose! I will do my best to explain below in a special Loose Unit edition of the Sunday Minefield. Another variable is the June 1 candidate filing deadline, which is just over two weeks away. A lot of unknowns remain including who might run and for what office, as well as the outcome of redistricting litigation. A lot will happen between now and June 1.
A friendly message and reminder to all our readers. The Landmine is made possible by myself and a team of awesome Alaskans. It takes a lot of work to provide the content we do. I am back in Juneau to report on the Legislature. Living in Juneau for session is not cheap. If you enjoy the content we provide, please consider making a one time or recurring monthly donation. You can click here to donate. We have a donation system that makes it super easy. We would really appreciate it. And thanks to everyone who has been supportive!
This Week’s Loose Units
It would be impossible to list or rank the sheer number of Loose Units in Juneau this week. So this week’s Loose Unit is the Alaska Legislature. Consider everyone listed below as a Loose Unit for this week. It’s fitting that earlier this week the Australian prime minister referred to the opposition leader as a “loose unit” for pushing higher wages. And for those who get mad about being the Loose Unit, check out the article.
At a press conference on Wednesday, the Prime Minister called Albanese a “loose unit” – probably dim to the fact the phrase is broadly interpreted as a compliment – for committing to supporting an increase to the minimum wage of at least 5.1 percent as part of a recommendation to the Fair Work Commission.
Explaining how we got here would be like me trying to build a rocket. But here we go. On Monday and Tuesday the Senate debated the “turducken” budget. The Senate Finance Committee, chaired by Senators Bert Stedman (R – Sitka) and Click Bishop (R – Fairbanks), again jammed the capital and supplemental budgets into the operating budget passed by the House in early April. This made many in the House unhappy because they were effectively unable to have a say in the capital budget.
Once an amended bill goes back to the first body that passed it, they cannot amend it. They can only accept or reject it. If they reject it, which is standard procedure for the budget, it goes to a conference committee so the differences can get worked out. Usually, the House passes the operating budget first and the Senate passes the capital budget first. Then they each go to the other bodies for amending and then to a conference committee. But because things have been so abnormal the last few years, the Senate has taken control of the process by using the “turducken” approach.
One fluke vote in the Senate started off a chain of events that has led to what can only be described as a cluster fuck. An amendment for a full statutory dividend (approximately $4,200) offered by Senator Mike Shower (R – Wasilla) passed 10-9. Senator Natasha von Imhof (R – Anchorage) was gone because of a health matter in her family. If she had been there, it would have failed 10-10. Amendments can be passed with a majority of members present. So her absence allowed the full dividend amendment to pass. Why they did not wait for her to come back is beyond my comprehension. It was a huge error. Part of it had to do with the fact Stedman waited so long to get the budget out of the finance committee. The clock is his friend but as you will see below, it can also be risky. Von Imhof came back the next day but the damage was done. There was talk of rescinding action on the amendment which would have allowed for a re-vote. But that requires 11 votes, and they did not have the votes to do that. It’s important to mention that historically, especially in the Senate, members would not take advantage of someone’s absence. But the pro-dividend people have been narrowly losing for years and they are tired of it. I can’t say I totally blame them.
The Senate also passed a $1,300 energy rebate and hundreds of millions of dollars in capital projects for the Port of Alaska in Anchorage, the new port in Nome, and road projects in the Mat-Su Valley. The port projects were must haves for Representatives Kelly Merrick (R – Eagle River) and Neal Foster (D – Nome), the House finance co-chairs. In two days of debate, the Senate added over two billion dollars to the operating budget, a staggering amount. After a multi-billion dollar windfall from high oil prices, the budget the Senate passed relied on super high oil prices and ran an approximate one billion dollar deficit. Stedman and Bishop totally lost control of their budget on the floor. The result was a dividend of over $5,500 and a lot of capital projects. The budget ended up passing the Senate 15-5. But everyone was totally unprepared for what happened next.
Stedman and Bishop, who voted for the budget, assumed the House would reject it the next day and that it would end up in a conference committee where they would lower the dividend. Even Shower and Senate President Peter Micciche (R – Soldotna) acknowledged this. The next day, Wednesday, the House was scheduled to meet at 7 pm to take up the concurrence vote. But then things got started getting hyper loose. It became clear the House had the 21 votes to concur – which has not happened since 1982. In response, House Speaker Louise Stutes (R – Kodiak) abruptly and quietly ended the floor session without informing the minority Republicans or even many in her majority. She snuck onto the floor with Representative Sara Hannan (D – Juneau) to end things. This pissed off a lot of people. This represented the point of no return for the idea of a full dividend.
Stutes then cancelled floor sessions on Thursday and Friday to try and stop the concurrence vote. Governor Mike Dunleavy (R – Alaska) promised several representatives that he would veto the $1,300 energy rebate, around $840 million, as well as an extra $90 million for pension obligations to zero out the deficit. One of the craziest parts of all of this is the absolute silence from everyone. Neither the House or Senate majorities, or Dunleavy, said a word about any of this. Not a single press conference or meaningful statement to the public. This is extremely abnormal. But legislative “leadership” clearly does not want to publicly answer questions and acknowledge how bad things are.
The silence resulted in the public thinking for four days they were going to get a $5,500 dividend. Think about that. A family of four thinking they would get $22,000. This is life changing money for many. And while this was never going to be the dividend amount, no one had the guts or leadership to speak up and tell people the truth. It’s really shameful. They play these games and forget or don’t understand the impacts they have on the public.
In the middle of all of this, Stedman scheduled a finance hearing on Friday for an oil tax bill from Senator Bill Wielechowski (D – Anchorage). It’s basically the failed oil tax ballot initiative known as Alaska’s Fair Share. During the loose Senate debate on the budget, Wielechowski offered it as a budget amendment. Senator Josh Revak (R – Anchorage) responded and said the bill was in his Resources Committee and needed a hearing. Wielechowski said it had not had a hearing in over a year, and then motioned for the bill to be discharged from the Resources Committee. It passed 13-7. The majority voting to discharge a minority bill from a committee is unheard of. Stedman, Bishop, and Senator Gary Stevens (R – Kodiak), the rules chair, voted for it as payback for Revak voting for the amendment with all the capital project money. The next day Stedman had the votes in the Senate to schedule a finance hearing the following day.
The message he was sending was simple: spend this much money and we will raise oil taxes and institute other taxes to pay for it. The hearing was just for show, but it had the desired effect. Letters and emails started pouring in to legislators from trade groups and business people who don’t want taxes. Like everyone else, they did not understand the games that were being played. Stedman played it masterfully but also pissed off a lot of people in the process.
The House finally met yesterday to take up concurrence. It ended up failing 18-22. It needed 21 votes. Most notably, Representatives David Eastman (R – Wasilla) and Christopher Kurka (R – Wasilla) voted no. They didn’t like how big the budget was, but mostly that the Senate stripped out language about banning public funding for abortions – something that has repeatedly been ruled unconstitutional. These are ardent full dividend supporters and are now on record voting against a full dividend. This is a fatal blow to their political careers. If they had both voted yes, I honestly believe someone would have flipped and ended everything. Eastman and Kurka voted against a guaranteed win, a full dividend, for what is sure to be two guaranteed losses, a full dividend and the meaningless abortion funding language. Their constituents and now-former supporters are furious. Also notable was majority members Representatives Josiah Patkotak (I – Barrow), Tiffany Zulkosky (D – Bethel), and Neal Foster, the finance co-chair, all voted yes.
House failed to concur. But the amazing thing is Rep. Foster voted to concur, and then Stutes appointed Rep. Ortiz to the conference committee instead of Foster, the other co chair. That’s unheard of. Foster is for a full dividend, Ortiz isn’t. The fix is in! #akleg pic.twitter.com/OMZnpveioO
— The Alaska Landmine (@alaskalandmine) May 14, 2022
While the vote was about the amount of money for some, the real vote was about Dunleavy. Many in the House did not want him to get the full dividend win. It’s a huge boost to his re-election and they wanted to do whatever they could to stop that. But now it really doesn’t matter. The budget is now in the conference committee, but the four days of the public thinking a $5,500 dividend was going to happen created a major issue. And not just for the budget process. This will now be a major campaign issue. I can just see the campaign adds now: “The elites stole your dividend.”
Before the Senate voted for the $5,500 dividend, it was accepted that the dividend was going to be $2,600 – the 50/50 amount. That is no longer an option. I think anything below $4,000 makes it hard to get the votes. If the House would have concurred that would have been it. But now whatever comes out of the conference requires 21 votes in the House and 11 in the Senate.
Stutes did not appoint Foster to the conference committee because he is for a full dividend. Instead, she appointed Representative Dan Ortiz (I – Ketchikan) – who is not for a full dividend – as the other majority member. It’s very uncommon for one of the finance co-chairs to not be on the conference committee. Stutes appointed Representative Bart LeBon (R – Fairbanks) as the minority member. LeBon is not for a full dividend and voted against concurrence. The House, while closely divided, can probably get to 21.
The Senate, however, is a different story. Micciche appointed Stedman and Bishop as the majority members and Wielechowski as the minority member. Stedman and Bishop are in lock step. But the Senate majority is highly fractured and does not have 11 votes for the budget. They need Wielechowski and the other five Senate Democrats to get to 11. This is exactly what happened last year. The Senate majority is so screwed up that when Micciche appointed Stedman and Bishop to the conference committee, Shower objected. Something else that is unheard of. Micciche called an at ease so Shower could talk to them. Shower, who was visibly angry, walked over to them. They were both sitting in their chairs looking like mob bosses. Stedman asked Shower what he wanted. Shower said, “You know what I want.” To which Stedman replied, “Well then talk to the House.” Shower said, “I’m talking to you.” It was intense. Micciche then interrupted and told them to calm down. Shower ended up removing his objection because it was clear he did not have the 11 votes to block Stedman and Bishop. But if Senators Shelley Hughes (R – Palmer) and Mia Costello (R – Anchorage) were there, I am not really sure what would have happened. That would have been an unmitigated level of loose and would have had disastrous repercussions. The Senate is really fucked up.
The conference committee has to finish by Tuesday so the vote can be scheduled for Wednesday. There are a lot of bills legislators are trying to get passed in the next few days. This is common for the end of session. But the budget is a real problem. There is zero end game. If it fails to pass on Wednesday, a special session will need to be called. A budget needs to be passed by July 1 to avoid a government shutdown. People want to go home and most of them need to campaign. Stedman knows this. But things are so fragile and people are so angry it’s really hard to predict what will happen. I give it a 60% chance it all blows up and the conference committee report fails, resulting in a special session. LOOSE.
If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at [email protected]