Proposed constitutional amendment on Alaska state spending may be too broad, legislative lawyer says

JUNEAU — A proposal by Alaska Gov. Mike Dunleavy to tighten a voter-approved spending cap in the state constitution advanced from the Senate State Affairs Committee on Tuesday despite a warning from the legislature’s leading lawyer that the proposal may be too broad for a simple constitutional amendment.

In a memo dated March 23, the head of the nonpartisan Legislative Legal Services division, Megan Wallace, said “the changes to the appropriation limit could ... result in the type of ‘sweeping change’ that is not permitted to be accomplished in an amendment to the state constitution proposed by the legislature."

Wallace identified other possible legal problems, but because the constitutional change is so “substantial,” it is closer to a revision than an amendment. Approval of a revision requires a constitutional convention.

The Alaska Department of Law disagrees with that interpretation, saying in a memo dated Monday that the proposed amendment is legal under precedent from the Alaska Supreme Court.

A similar disagreement developed earlier this year over implementation of the governor’s PFD payback proposal.

Cori Mills, an attorney in the department, told lawmakers Tuesday that the department and the Legislature’s attorneys are getting different results from possible “tests” of constitutionality from that prior case.

“That’s the main difference between our memos that may have resulted in the different conclusion,” Mills said.

The Senate’s judiciary committee is expected to take a closer look at that issue as the governor’s proposal advances into its hands during the next stage of the labyrinthine gantlet faced by any constitutional amendment.

As explained by Sen. Peter Micciche, R-Soldotna, the state affairs committee’s job was to “think about basic policy," and he offered an example of the basic questions considered by the committee: "Do we need an appropriation limit?”

The answer to that question was a foregone conclusion. Last year, the Alaska Senate needed only a month to pass a statutory spending cap, and senators’ support for the concept has not diminished since then. Micciche himself reiterated that he supports a tighter spending cap, just as he did last year.

As part of his comprehensive fiscal plan, Dunleavy has introduced a stronger constitutional spending cap to tighten limits first approved by voters in 1982. Those limits were introduced at the peak of the post-pipeline spending boom and have never been seriously approached.

The governor has repeatedly said that without a stronger spending cap, even the austere budget he proposed this year will be swamped by future spending increases, and the state will again find itself in financial trouble.

“The issue from my perspective is we’ve got to get our spending under control,” he said on statewide public radio during an interview Tuesday.

To do that, the governor has proposed limiting state spending to the average of the previous three years’ budgets, plus half the rate of inflation and the state’s population growth. That growth rate is capped at 2 percent, even if inflation spikes.

If oil prices spike and the state earns much more money than expected — something less likely under the oil tax changes earlier this decade — excess earnings would go into the Permanent Fund and the Constitutional Budget Reserve.

The state affairs committee made no changes to the governor’s idea before sending it onward, though Micciche and other members said they are interested in amending it at a future date. (Micciche and Sen. John Coghill, R-North Pole, were particularly interested in the way the cap fails to keep up with inflation.)

Now that the state affairs committee has given its blessing, the Senate Judiciary Committee will examine the bill’s legal aspects, including the possible constitution problem raised by the Legislature’s lawyers. The first hearing of the judiciary committee on that topic has been scheduled for 1:30 p.m. Wednesday.

If the judiciary committee gives its blessing, the idea would go on to the Senate Finance Committee for consideration. If approved there, a vote of the full Senate awaits. Fourteen votes are needed to advance a constitutional amendment proposal in the Senate, but lawmakers are believed to have enough support to pass that hurdle.

A tougher challenge waits in the House, where lawmakers have been more skeptical. Last year’s Senate attempt to tighten the spending cap died on the doorstep of the House Finance Committee.

Clarification: This article has been amended to clarify the context of a quote from Sen. Peter Micciche, R-Soldotna. As originally written, a reader could have assumed Micciche opposes the spending cap. A quote from Micciche was also corrected to delete a duplicate word.