Politics

How the Democrats in the Alaska Legislature suddenly became relevant

JUNEAU -- For almost the full 90 days of this year's regular legislative session, the small Democratic minorities in the state House and Senate have been powerless to accomplish their goals.

They were unable earlier to stop $100 million in education cuts in the operating budget, or to even open a discussion on oil tax credits that have caused the budget deficit to balloon.

But now, it's Democrats who are in the driver's seat.

They're making use of an obscure provision in state budgeting law that hasn't been relevant for a decade, and that some say shouldn't exist and isn't working as intended. Ironically, the provision that gives Democrats power was created at the insistence of Republicans years ago.

The battle is over money for schools, but the key is the state's $10 billion Constitutional Budget Reserve, a savings account into which Alaska can dip to balance its budget in lean times. And these are lean times, with oil revenues plunging and the state facing a budget deficit as big as $4 billion.

"We've hit the fiscal cliff, we've fallen off the fiscal cliff," said Sen. Pete Kelly, R-Fairbanks, who wants to cut school funding and use the CBR to balance the state budget he wrote as co-chair of the Senate Finance Committee.

The House started the year making big cuts to education, before the budget passed over to the Senate, which made even bigger cuts.

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In an ordinary year, that would have meant that the Republican-led leadership in both houses would have gotten together and met somewhere in the middle.

But this is no ordinary year, and House Democratic leader Chris Tuck is using his new power to try not only to reverse the $47 million education cut in the Senate but also the $19 million House cut to education. He's even seeking to restore $32 million in cuts that Gov. Bill Walker made before the legislative budgeting process even started.

But even with those cuts, billions in state reserves will be needed to balance next year's budget. Two years of deficits have consumed readily available savings that Republicans were able to use with a majority vote, leaving the CBR, which required a supermajority.

When Alaska voters amended the Constitution to create the reserve fund in 1990 they made it hard, but not impossible, to get into by requiring a three-quarters majority vote. That means 15 of the 20 senators and 30 of the 40 representatives must agree.

Republicans have solid majorities in each body, but in the House they don't have the three-quarters vote needed, meaning that House Speaker Mike Chenault, R-Nikiski, needs to negotiate with Minority Leader Tuck to get support from his coalition to access the CBR and balance the state budget.

That's an unusual position for a Democrat, and he said he's finding Republicans unaccustomed to it as well.

A week of negotiations have made little progress, Chenault said Friday afternoon.

"I don't see where we get a CBR vote for the money, as of yet," he said. "We don't have a three-quarter vote right now."

Tuck said the Republican-led majority caucus usually rolls right over Democratic objections but can't this year.

"This is something that the majority is not used to, working side by side with us on a budget we can all agree on," Tuck said.

But what Democrats call negotiating a budget, some Republicans are calling it taking the budget "hostage."

Sen. Anna MacKinnon, R-Anchorage, said the Senate has the 15 votes it needs to get money out of the reserve but still needs Tuck's Democrats to pass a budget balanced with reserve funds.

"We don't have the money to draw from the CBR without a minority vote over in the House," she said, but the Senate doesn't want to give in to their demands.

"I will not be held hostage to spend more money that we don't have," MacKinnon said.

Tuck described the senators' approach to negotiations as "folding their arms arms and saying 'no, no, no,'"

That's left Chenault as something of a mediator, and he said his caucus is in agreement with rolling back the additional $47 million cut the Senate made to education's per-student funding formula called the Base Student Allocation that goes to districts.

But he said Democrats are using the CBR negotiations to open up a host of topics in which they weren't happy with budget decisions.

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That's included ferries, broadband for rural schools, funding for the Office of Children's Services, public broadcasting, the university system, Medicaid expansion, and others along with education, he said.

"They had a fairly long list of things they were interested in," Chenault said.

The three-quarters vote needed to access the CBR was intended to protect the fund by making it difficult to take money out of it, but those who watch the fund say it has had unintended consequences.

"Some people say the three-quarters vote causes you to spend more in order to get that vote, rather than spend less, which is what it was intended to do," said David Teal, director of the Division of Legislative Finance.

Former House Speaker John Harris, R-Valdez, once said that when it was necessary to access the CBR almost any individual legislator could demand a pork-barrel project in exchange for their vote.

"It's legalized bribery, but its still bribery," he said.

Sen. Lyman Hoffman, D-Bethel, was in a Democratic majority when the CBR was created. He said he and other Democrats would have preferred it be easier to access the fund.

"It was the majority's opinion that it should be a two-thirds vote, but the Republican minority didn't want it to be so low. They insisted on a three-quarter number instead of a two-thirds number," he said.

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The minority rights they were protecting for Republicans then are now, 25 years later, giving Republicans fits.

Chenault said he's now exploring the possibility of passing a budget without a CBR vote and tapping into other state funds to pay bills for a while. Those would likely include the Power Cost Equalization Fund, the Higher Education Trust Fund and others, which could put off a CBR vote until the fall, when those funds would be exhausted.

Chenault said that would allow the session to end quickly.

The Republican majority can also access the billions in the Permanent Fund's earnings reserve with a simple majority, but Chenault said that's not under consideration for now.

Tuck said Republicans should negotiate adequate education funding and not dip into any of those special accounts.

"There is no reason to invade the Permanent Fund, there is no reason to invade the power fund, there is no reason for anybody to start invading funds that are the lifeblood of various people in the state of Alaska," he said.

Chenault acknowledged that he'd broached the idea of adjourning without a CBR vote to Walker.

"That's not an option the governor really wants to see, for us to leave without a CBR vote," Chenault said.

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