Funding confusion follows Bronson administration’s decision to not implement budget passed by Anchorage Assembly for months

Anchorage Mayor Dave Bronson’s administration for months has not been following the 2022 city budget passed by the Assembly last year. Instead, the mayor has largely followed his own original budget proposal, even after the Assembly voted to override most of his vetoes to items in the budget.

Now, city officials say that the administration is changing course and will use the Assembly-approved budget as a baseline when the administration and Assembly tackle revisions to the city budget on Tuesday.

Assembly members said that the administration’s refusal to use the 2022 approved budget beginning in January has caused confusion over funding to some of those city programs and positions such as the Mayor’s Arts Grants and building inspectors — both of which the Assembly voted to additionally fund after the mayor proposed cuts.

It also raised the specter of continuing conflict between the administration and Assembly over who has the ultimate power over city spending.

Assembly member Forrest Dunbar, co-chair of the budget and finance committee, said he believes the administration’s move was “illegal and unprecedented,” although it has not had many tangible impacts so far.

“They broke the law with regard to following the budget, and they violated separation of power and the charter that gives the power to the Assembly to set the budget,” Dunbar said.

Corey Allen Young, spokesman for the mayor’s office, said in an email that the Assembly used its own revenue projections to spend more money when passing the city budget. Young asserted that city code requires that the city’s chief fiscal officer certify that revenue is available before money is spent. The administration could not spend money “that it was uncertain would materialize,” he said.

“Every year, Treasury provides a financial forecast, which is the basis of revenues projections during the budget development process that happens every Fall. During the budget debate the Assembly changed the Treasury forecast, (increased the money projected from the bed tax, in excess of what the experts in Treasury & Finance were predicting we would receive). Thus, the CFO could not certify the Anchorage Assembly’s forecasted revenues because we rely on the experts in Finance, not politicians, to make financial projections,” Young said.

The Bronson administration’s decision not to implement the Assembly’s budget did have some direct impacts. For example, city officials told the Arts Commission last month that the city grant money they will receive has been reduced.

And earlier in the year, city officials in an email told the Anchorage School District that even though the Assembly had restored city funding to the School Resource Officer program through the end of the school year, the city’s budget still relied on the district paying most of the costs.

However, the school district’s chief financial officer said the district has not actually paid the costs — the city so far has not asked the district for payment or taken money for it from school district funding.

Divergence over revenue projections

Each fall, the mayor proposes a city budget for the coming year based on revenue projections. The Assembly reviews and then passes the budget, usually with some changes.

The administration and Assembly then revise the budget in the spring after the city gets a more accurate picture of revenue, and then they set the mill rate, which helps determine property taxes.

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Bronson announced earlier this month that he is proposing an additional $5.5 million for the Anchorage Police Department and Anchorage Fire Department’s operations. Bronson said that projected revenues had increased by $11.4 million after the first quarter of the year.

Dunbar said that moves the administration’s revenue predictions much closer to the Assembly’s.

Still, the mayor’s revised budget, recently submitted to the Assembly, did not use the Assembly-approved budget as a basis for the revisions, and removed or cut back funding already approved by the Assembly in the 2022 city budget, including funding for some grants, city positions and the school resource officer program.

During a budget work session last week, Anchorage Office of Management and Budget Director Cheryl Frasca confirmed to Assembly members that the mayor’s office had been using a different budget that used the revenue projections certified by the city’s chief fiscal officer — instead of the Assembly’s budget, which used larger revenue projections.

Shortly after the meeting, Frasca emailed Assembly leadership and said the mayor had agreed to prepare a second version of his budget revision proposal that uses the Assembly-approved budget as a base.

Assembly Chair Suzanne LaFrance said the issue is still not resolved.

“It’s very disappointing, quite frankly,” she said.

‘Really frustrating’

Last year’s budget process was fraught with tension and a few heated exchanges. The Assembly reinstated much of the funding for cuts the mayor had made to city programs, and Bronson then vetoed most of those changes. The Assembly by a supermajority vote, reversed all of those vetoes but one.

At the time, city lawyers argued that a section of city code states that the chief fiscal officer must first certify that the funds exist or will exist based on the fiscal officer’s estimates — before the Assembly can spend the money.

Assembly members and their legal advisers disagreed, arguing that setting a budget is always based on estimates and is not itself an expenditure. The administration’s interpretation of code would put far too much power in the hands of the chief fiscal officer — and ultimately the mayor — undermining the Assembly’s legislative power to direct how city money is spent, they said. They also argued that city charter clearly gives the Assembly final authority on the budget and that the administration’s revenue estimates were unreasonably conservative.

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LaFrance said that members of the administration later met with Assembly members and told them the funds weren’t certified but that the issue would be worked out prior to budget revisions in April.

“The administration assured us that we would resolve this in first quarter and that in the meantime, there would be no real-world impacts, and that it was recognized the budget that the Assembly passed is the budget,” she said.

But LaFrance said when the time came, the Bronson administration didn’t use the “lawful budget” for its revisions and instead used its own. That’s made the revision process challenging, she said.

“That’s really frustrating, because we operated in good faith and didn’t have any reason to doubt when they said, ‘Yes, we will resolve this by first quarter.’ And then we see that the amendments and the budget were not implemented,” LaFrance said.

Young said the administration advised the Anchorage Assembly about the fund certification issue in January.

The administration will send a second version of the mayor’s budget revisions to the municipal clerk’s office by Friday afternoon, Young said.