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Alaska Gov. Walker looks to local leaders for help lobbying lawmakers on budget plan

  • Author: Nathaniel Herz
  • Updated: December 2, 2017
  • Published November 25, 2016

Alaska Gov. Bill Walker has a new message for local government leaders forced to cut their budgets because of state spending reductions: Help me help you.

Walker in June used his veto power to slash spending on an array of state programs in a bid to close Alaska's massive deficit — and in the process, he blew multimillion dollar holes in the budgets of places like Anchorage and the Matanuska-Susitna Borough.

Now, in a new string of letters to municipal leaders, Walker, a former Valdez mayor himself, said his decisions were forced on him by legislative inaction. And, he added, he'll need help from local officials to pressure lawmakers on a broad budget plan if they want to keep things from getting worse.

Walker particularly singled out officials at the Mat-Su Borough, whose state legislators have been among the most resistant to Walker's deficit-reduction proposals, even as this year's state revenue covers just 29 percent of spending.

Rather than lobbying him against further cuts, Walker urged Vern Halter, the borough mayor, and John Moosey, the borough manager, to shift their focus "toward your own legislators."

"I'm already there," Walker wrote in a two-page letter dated Oct. 17, released to Alaska Dispatch News this week in response to a public records request. "You need to help get them on board."

Walker sent a separate letter, on the same day, to the board president of the Alaska Municipal League, which represents cities and boroughs, asking for cooperation in protecting "our mutual constituency" during the upcoming legislative session.

The governor asked the league to move beyond a generic expression of support for a deficit-reduction plan by voting on a resolution. Instead, he said, it should endorse "specific pieces of legislation" with letters, lobbying and "formal testimony before every legislative committee."

The requests highlight an escalating appeal to local leaders from Walker, who's tried to cultivate political support from city and borough officials.

"The governor is very cognizant, as a former mayor, that the vetoes and all of the cuts that the Legislature and he have made roll downhill," said Grace Jang, Walker's communications director. "They're shouldered by the municipalities."

Leading into the 2016 legislative sessions, Walker's office distributed draft endorsements of his budget reform plan to cities, towns and boroughs for consideration. Over the summer, the governor made more than a dozen appearances at local meetings, from Anchorage to Kotzebue to Ketchikan, where he tried to explain, justify and even apologize for the budget vetoes he made to help close the state's deficit.

The vetoes, when combined with other program cuts made by state lawmakers, have stripped tens of millions of dollars from the budgets of Alaska's cities and boroughs — forcing local leaders to contemplate spending cuts, tax increases, and spending from savings to make up the difference.

One of Walker's vetoes cut more than $30 million in state payments for local school construction debt. The Legislature, meanwhile, passed a bill that halved the state's annual cash assistance payments to cities, villages, and boroughs — known as revenue sharing — from $60 million to $30 million.

"Our residents are feeling it — we're right on the ground level," said Clay Walker, the Denali Borough mayor and board president of the municipal league, who's not related to the governor. "More responsibilities are being kicked down to the municipalities."

Gov. Walker says the blame for his own budget vetoes should rest with state lawmakers, not with him. That's because he earlier proposed a package of deficit-reduction measures — spending cuts, diverting some of the Alaska Permanent Fund's investment revenue to state services instead of dividends, and an array of taxes, including a new personal income tax.

The Legislature approved many of the spending cuts and added some of their own. But all of Walker's proposals to raise new revenue stalled: his Permanent Fund legislation died in the state House after passing the Senate, and none of his tax measures even came to a vote on the floor of the House or Senate.

Walker said he made his $1.3 billion in vetoes — which included more than $600 million for dividends — because the Legislature was proposing to spend more than $4 billion of the $14 billion in the state's primary savings accounts.

Local officials said they understood Alaska's dire fiscal straits, but several singled out Walker's abrupt veto of the school debt payments for criticism, with one noting that cuts to the program hadn't been openly discussed during this year's legislative session.

"I've said this to the governor's face: To have nobody talk about cutting school bond reimbursement and then having him do it with the veto pen is the wrong approach," said Jesse Kiehl, a Juneau Assembly member who also works as an aide to state Sen. Dennis Egan, D-Juneau. "We're all going to have to work on this stuff collaboratively."

The vetoed school-debt payments were a particular source of frustration to Mat-Su Borough officials, who cited rapid population growth and infrastructure needs in their September letter to Walker, which urged him to consider paying the borough's costs in his next budget. That prompted Walker's tart response, in which he asked Moosey, the manager, and Halter, the mayor, to turn their attention to their own lawmakers.

Though the governor didn't name them, state Sen. Mike Dunleavy and Reps. Mark Neuman and Cathy Tilton have been leading legislative opponents, along with other Valley legislators who were knocked out by voters this year.

The Mat-Su Borough spends money and time pushing its legislative agenda — it has an $80,000-a-year lobbyist, former House speaker John Harris, and Moosey took four trips to Juneau last year, he said.

In a phone interview, Moosey said the borough is "very supportive" of a comprehensive solution and expects to keep pushing that message to lawmakers in the upcoming legislative session. But he didn't see the results of the past legislative session the same way as the governor.

"The political machinations between the governor and the Legislature are between the governor and the Legislature," Moosey said. "We don't want to be tempted into telling the Legislature or the governor how to do their business. Just get a result that's going to work for us all."

But interviews and public statements suggest that at least some Mat-Su legislators, and their narrow focus on spending cuts, will continue to be an obstacle to Walker's efforts to reach a balanced budget — given the size of the deficit is large enough it would persist even if all state employees were fired, or if lawmakers cut all spending on schools and health care.

"My commitment to my constituents has been to leave the Permanent Fund dividend alone, and to give the people the choice on what to do with their Permanent Fund dividend before the Legislature comes in and makes that choice for them," David Eastman, a newly elected Republican representative from Wasilla, said in a phone interview. As for taxes, he added: "You need to identify the budgets and the cuts before you have the right to go ahead and ask for more taxes."

Other local officials said they plan to keep pressing state lawmakers for budget reforms and explaining how they've been hurt by the spending cuts in Juneau. And, like the governor requested, the organization representing cities and boroughs, the municipal league, expects to endorse specific bills, said its board president.

But board president Clay Walker also pointed out the league has already made a direct appeal for a "sustainable fiscal plan." And Ethan Berkowitz, the Anchorage mayor and a former House member, argued local officials shouldn't have to do any more.

"The responsibility in our system of government rests on the Legislature at this point," Berkowitz said in a phone interview. "If these guys don't understand, they're not paying attention. I'm not going to teach them."

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