It took the Legislature coming within days of a first-ever government shutdown for Alaska just to pass an operating budget. Given that, perhaps it was optimistic to try and shoehorn multiple constitutional amendments, the current and future dividend, revenues to pay for government, and a boatload of spending items into a 30-day special session. But, as they say, you never know until you try.
And now we know, as most of us suspected, that the most dysfunctional Legislature in recent memory couldn’t miraculously find common ground on the state’s budgetary future. At the end of the week, the House and Senate appeared to be heading toward a compromise position of an $1,100 Permanent Fund dividend, $114 million in required oil tax credit payments, restoration of money in some “swept” funds and an early exit from Juneau. Those of us who have been waiting impatiently for someone to step up and make hard decisions about the state’s fiscal future will find it frustrating that for yet another year, the Legislature has kicked the can down the road. But at this point, what’s the alternative — paying legislators in the various caucuses for weeks more in per diem expenses while they do little but take potshots at each other in committee meetings and interviews?
The smart money has already moved on to next year — not likely the legislative session, but the election.
Scant hope for solutions
It’s technically possible that next January, legislators will discover a newfound willingness to come together in the state’s best interest and hammer out a fiscal solution that recognizes the central role Permanent Fund earnings will play in Alaska’s future. But don’t bet on it.
Next year will be an election year, and legislators are historically loath to stick their necks out by advocating for solutions unpopular with half the electorate or more, such as massive cuts or the institution of a sales or income tax. What’s more, the starkly divided Legislature will still have its same cast of characters that led to unprecedented brinksmanship this year, and if anything, the current special session has shown legislators are even less apt to compromise now than in previous sessions. Absent seismic shifts in the public mood or legislators’ philosophies on government, next year’s session is likely to play out like this year: A great deal of sound and fury, accomplishing little but the bare passage of an operating budget — likely one with a dividend in the $1,000-$1,500 range.
The best we can hope for is positive developments in the budget factors not controlled by the Legislature — strong Permanent Fund investment returns and a continued oil price rebound.
A pivotal election
What will — or at least could — break Alaska’s stalemate over long-term fiscal solutions is next year’s general election. Essentially, everything will be in play: The governor’s seat will be in the mix, as will every single one of the seats in the Legislature because of the new district map created by Alaska’s Redistricting Commission.
The redistricting process itself could be pivotal in shaping the look of the next Legislature. The districts created will reflect changes in Alaska’s population, with growth in the Mat-Su region and on the Kenai Peninsula. But there are also many different ways to split a state as large as Alaska into 40 districts, and it’s a virtual certainty that some sitting legislators will find themselves drawn into a district with another — and some districts may have no incumbent at all.
And there’s another big wrinkle: 2022 will be Alaska’s first election with ranked-choice voting, where the top four vote-getters in each district’s open primary will advance to the general election. In the general, voters can rank those candidates from 1 to 4, with their votes moving to their next-favorite candidate if their first choice is eliminated from contention. With more choices in the general election and a less party-dominated primary election, it’s possible voters will choose legislators who are interested in coming together for the common good rather than retreating into their respective camps and throwing bombs at each other.
It’s also possible that, like this year, the Legislature’s makeup ends up resembling the fractured electorate, with civility in short supply and progress on Alaska’s fiscal situation blocked by my-way-or-the-highway attitudes in the Capitol Building.
As we always do, let’s hope that cooler heads prevail.