Senate President Peter Micciche, R-Soldotna, looks on as Senators vote whether to adjourn the long-awaited budget vote on Tuesday, June 15, 2021. Budget talks were derailed Tuesday after lawmakers and the governor balked at the budget proposal. (Peter Segall / Juneau Empire)

Budget talks break down as shutdown looms

Floor sessions delayed or canceled as spending plan remains ‘in flux’

This story has been updated with additional information.

The state of Alaska appears ready for a government shutdown, as lawmakers canceled scheduled floor sessions and spent most of the day in closed-door meetings. Legislative leadership met for most of the day Tuesday, and while the Senate met briefly for a technical session, going into the evening the House of Representatives was still at the call of the chair.

Speaking to reporters in the halls, lawmakers mostly declined to comment on the status of the talks, saying they knew only bits and pieces of the negotiations.

Rep. Neal Foster, D-Nome, declined to elaborate but said the tentative agreement that had come out of Sunday’s conference committee meeting was “in flux.”

Majority Leader Chris Tuck, D-Anchorage, told reporters there were discussions of a possible second, “contingency” PFD adding up to $2,300 on the condition the state’s long-term fiscal solution is solved in the August special session.

Several lawmakers balked at the budget proposal that came out of the bicameral conference committee charged with negotiating the budget. The final proposal split up funding sources for projects across the state, meaning if lawmakers want items in their district funded and a larger Permanent Fund Dividend they’ll have to vote for things they oppose.

The committee’s budget proposed using funds from the state’s Constitutional Budget Reserve to fund certain state projects and a portion of the PFD. But using funds from the CBR requires a vote three-quarter vote in each body, which is not guaranteed.

The state’s fiscal year begins July 1, and if the Legislature hasn’t passed a budget by then, state operations will be unfunded.

Additionally, the shutdown would trigger automatic layoffs for certain state employees. The state must inform employees of the firing within 10 days according to state contracts, and notices will be sent to employees even if their position will remain when the budget passes.

On Monday, several lawmakers expressed anger at using the CBR funds, saying they were being bullied into voting a certain way. Tuesday morning, many lawmakers learned of an email message purportedly sent by Gov. Mike Dunelavy urging Alaskans to tell their elected representatives to vote against the budget bill.

But that message was sent by Restore the PFD, an advocacy group managed by the governor’s office, and in an email, Deputy Press Secretary for the governor’s office Lauren Giliam said that message was unauthorized and did not necessarily reflect the governor’s position on the budget.

“The Restore the PFD Facebook page, which is administered by the Office of the Governor, sent out an unauthorized email with respect to the Governor’s advocacy of a vote on the budget,” Giliam said in an email. “While Governor Dunleavy strenuously opposes the amount of the Permanent Fund Dividend in the proposed budget, he did not authorize any advocacy efforts to urge votes one way or the other on the bill. The budget is currently the subject of vigorous negotiations between lawmakers in both bodies. The Governor is clear he is not going to interfere in those deliberations.”

The governor’s office didn’t immediately respond to request for further information.

[Lawmakers decry ‘bully tactics’ in budget proposal]

The governor did send a letter, but it was to Rep. Sara Hannan, D-Juneau, chair of the Legislative Council, urging her to open the Capitol building to the public. The Capitol has been closed to the public since the beginning of the COVID-19 pandemic, but a number of lawmakers and others have argued for its opening.

The council had a meeting at 1 p.m. Tuesday, and reopening the Capitol complex was on their agenda. However, the meeting had to be delayed, Hannan told reporters, as lawmakers were waiting on leadership to call a floor session. The council is currently scheduled for Wednesday at noon, Hannan said.

The Senate met briefly for a technical session Tuesday morning but just barely agreed to adjourn until the next day. Sen. Bill Wielechowski, D-Anchorage, opposed adjourning to the next day which triggered a vote in the body.

“We have a conference committee report on our desks,” Wielechowski said, referring to the budget. “We should vote on it.”

Senators voted 8-7 in favor of adjourning.

After the Senate session, Wielechowski told reporters it was possible lawmakers could pass the operating budget and avoid a government shutdown but not vote to reverse the sweep until later in the session. But that scenario could leave several critical programs unfunded until lawmakers are able to act.

• Contact reporter Peter Segall at psegall@juneauempire.com. Follow him on Twitter at @SegallJnuEmpire.

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