Happy Mother’s Day to all the moms out there! The constitutional session limit is just ten days away, and significant uncertainty remains with the budget. The Senate will take up the combined operating, capital, and supplemental budget tomorrow on the floor. It will definitely be entertaining. Just over three weeks remain until the June 1 candidate filing deadline. Surprisingly, few incumbents running for re-election have serious challengers, and many have no challengers at all. And ballots from the congressional special election have started coming in the mail from voters all around the state.

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Port dispute could sink budget and torpedo Legislature’s end game — or not

The following is an excerpt from this week’s edition (5/5/2022) of the Alaska Political Report. You can click here for more information about the Alaska Political Report. A subscription is $1,299/year per organization. Discounted pricing is available for non-profits and government entities. We will be providing extensive election coverage this year in addition to our session coverage. If you have any questions or would like to subscribe, please email jeff@akpoliticalreport.com.

There are less than two weeks left until the constitutional 121-day session limit, and the plan to get out of Juneau — to the extent one exists — still faces significant obstacles. As expected, earlier this week the Senate Finance Committee rolled the capital and supplemental budget into House Bill 281 – the operating budget that the House already passed last month. The committee passed the bill out Tuesday, and sent it to the Rules Committee.

Things got contentious earlier today on the Senate floor when the Senate Finance Committee’s new version of HB 281 was first read across. What should have been a unanimous procedural vote to adopt the committee substitute turned into a rare and telling debate. Golovin Democratic Sen. Donny Olson, one of the finance committee’s minority members, objected to the bill being adopted because it did not include money for the Nome Port. (More on that below.) He also said he did not like all the budget bills being combined into one. Wasilla Republican Sen. Mike Shower and Palmer Republican Sen. Shelley Hughes, the majority leader, both spoke in support of Olson’s position. After debate, the committee substitute was adopted 11-7. Six of the seven no votes were from members of the Senate majority — an extremely rare split that highlights the well-known fracture within that majority.

The Senate Finance Committee’s move to roll the capital budget into the already-passed House bill limits the House members’ options when the combined measure returns to their chamber — forcing them to accept or reject the entire bill without any changes or additions. If they reject the Senate’s changes — which is standard — a conference committee will be appointed. The conference committee cannot make any additions; it’s limited to choosing elements from either the House or Senate versions, except in the rare case of a free conference committee, which only happens if the first conference fails. Which means that the Senate plan to get out of Juneau by forcing a conference committee on the combined bills could end in gridlock.

The main problem is the capital budget. Eagle River Republican Rep. Kelly Merrick and Nome Democrat Rep. Neal Foster, who co-chair the House Finance Committee, both want capital budget money for fixing Anchorage’s ailing port and a new port in Nome. The Senate’s version of the capital budget has $25 million for Anchorage’s Port of Alaska and no money whatsoever for the Nome port. Merrick and Foster want a lot more, and Anchorage Mayor Dave Bronson has also been heavily lobbying for port money. In the still-preliminary House version of the capital budget, there’s $400 million for the Port of Alaska — half of which is locked in and half that’s contingent on federal matching money. There’s also $175 million for the Nome Port.

Because the Senate Finance Committee already passed the joint operating, capital and supplemental budgets in HB 281, the only way to make changes now — unless the bill gets sent back to the committee — is on the Senate floor. Negotiations between all four finance co-chairs are ongoing. But Sitka Republican Sen. Bert Stedman, who co-chairs the Senate Finance Committee, has been hesitant to make large port appropriations, which don’t benefit his home region. Stedman’s move of merging the capital budget into the House’s operating budget, while risky, puts him in control of the process — something House leadership and several of his fellow majority members, understandably, do not like.

The big question now is does the Senate make the needed changes to the capital budget to appease House leadership? Floor amendments will not be heard until Monday. If everything is ironed out and the Senate passes the bill early next week, that leaves a week before the deadline to finish the session. Lawmakers could extend ten days with a two-thirds vote of each body, but that’s a dubious proposition at best. Plus, sources tell the Political Report that some key members of the Senate have excused absences after May 18 and will be leaving town.

There is also the problem of the effective date. For the budget to go into effect in less than 90 days, the Alaska Constitution requires a two-thirds vote in each chamber. The new fiscal year starts on July 1. When the House passed their version of the operating budget last month, they failed by two votes to get the 27 needed for the effective date. This, however, can be cured when they vote on the conference committee report. The Senate needs 14 votes, and got exactly that last year, days before July 1. Some argue the effective date for the budget is moot because even if it’s not technically effective July 1, it eventually will be funded. But GOP Gov. Mike Dunleavy has taken the position that if the budget is not effective on July 1, the government will shut down until the funding is effective. This became a major issue last year and was resolved only days before July 1 — and it could potentially be another stumbling block this year. The strange procedural vote in the Senate mentioned above shows how challenging it is to get 14 votes in that divided chamber.

Several senators and representatives want a full dividend, which would be substantially larger than the current proposal that splits the Permanent Fund’s earnings equally between the PFD and government services. Others are upset about the capital budget and the budgets being combined into one bill. Will they use the effective date to blow everything up? It’s possible. But keep in mind that all but one of the 60 legislative seats are up this year due to redistricting. Legislators want to be able to campaign and raise money, not be stuck in Juneau. Stedman, who does not have a tough race and is known as a hard and patient negotiator, knows this and is probably banking on lawmakers’ desire to get out of Juneau being more urgent than their need to bring home larger dividends or capital projects for their constituents. But with so much uncertainty and so many moving parts, it would not take much for things to go off the rails.

We are watching the process closely and will provide updates as needed.

Other Happenings

For a further update and explanation on the budget mess, and why a special session may end up being called, check out my Facebook Live video from yesterday from Juneau.

The June 1 filing deadline is fast approaching. This Landmine article explains just how different the legislature is going to look next year due to redistricting/retirement/running for higher office. Representative Adam Wool (D – Fairbanks) confirmed he will file to run for U.S. House in the general election, so he will definitely be gone next year. Ten House incumbents will definitely be gone next year, and there are five open House seats. Meaning there will be a minimum of 15 new representatives next year. But a few others may choose not to seek re-election or run for higher office, and some could lose re-election. So there could be a scenario where the House has 20 new members – a 50% turnover! Even 37.5% turnover (15 members) is significant. With so many new people, it will make organizing difficult. The Senate will also have high turnover, but likely not as high as the House. Stay tuned for more Landmine coverage on the elections including a live stream from our Anchorage studio after June 1 where we break down all the races.

The Alaska Democratic Party elected Mike Wenstrup party chair at the convention this weekend in Seward. An appropriate, non-satirical, headline would read “Alaska Democrats elect straight, cisgendered white man as party chair.”

Here is a weird one. Mike Dunleavy’s campaign is now offering these yard signs for sale. However, they are shitty knockoffs of signs Paxson Woelber designed in 2018 when he was working for the pro-Dunleavy independent expenditure group. Funny enough, Paxson has switched sides and is now doing graphic and website work for Bill Walker’s campaign. I asked Paxson, who is a co-owner of the Landmine, what he thought about this. He provided the following comment:

Pretty weird to see the Dunleavy campaign making low-effort knockoffs of the signage we did for the IE in 2018. Look how they reused the same tree graphic on several of the signs. How hard is it to make an illustration of a tree? They even copy-pasted the trees into the water with the boat and whale. Trees don’t grow in the ocean and ripping off original work by Alaska designers is kinda lame. They should try something new. I just hope nobody thinks I made these.

And I’m fairly certain there is a statute against using images of the Alaska Railroad for partisan purposes…

Josh Revak going after Santa Claus is peak loose!

Mary Peltola, a Democrat running in the congressional special election, took to Twitter this week and declared that she’s the only pro-choice woman in the race. But then Tara Sweeney, a Republican running in the race, said she is pro-choice as well. Which led to another tweet from Peltola saying the stands corrected.

This Week’s Loose Unit 

As the end of session approaches, there is no shortage of Loose Unit candidates. But an extremely loose situation made this week’s designee clear. This week’s Loose Unit is a tie between Senator Shelley Hughes (R – Palmer) and Senator Mia Costello (R – Anchorage). To give some context, both are members of the Senate majority. Hughes is the majority leader and Costello is the majority whip. These positions both involve ensuring the majority sticks together. Now it’s no secret the Senate majority is seriously fractured and not functional. But what earned them Loose Unit status is a vote that is just on another level.

When the Senate Finance Committee’s substitute for the budget hit the Senate floor on Thursday, Senator Donny Olson (D – Golovin) objected. He said his objection was about rolling the capital and supplemental budgets into the operating budget and because there was no money for the port in Nome. It’s highly irregular for there to be an objection about simply adopting a bill for consideration. But Olson is a member of the minority and had issues with the bill, so it’s his right to object. It should have been a quick and simple vote. But after his objection on adopting the bill, Senator Mike Shower (R – Wasilla) and Hughes both spoke on behalf of Olson’s objection! This is hyper loose behavior of majority members, especially Hughes as the majority leader. The budget that came out of the Senate Finance Committee is a majority bill. After debate, the vote was 11-7 to adopt the bill. Keep in mind, this is not voting for the bill, it’s just voting to adopt it for debate and consideration. Six of the seven no votes were from majority members that included Costello, the whip. The job of the whip is to maintain discipline and order within the majority. Hyper loose behavior.

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 jeff@alaskalandmine.com.