Dunleavy rolls out constitutional amendments to limit Alaska legislative spending power

JUNEAU — Fulfilling pledges made during his campaign for office and during his State of the State address, Gov. Mike Dunleavy has formally proposed three constitutional amendments that would significantly restrict the ability of the Alaska Legislature to raise taxes and spend money.

The governor introduced the amendments Wednesday in the Alaska Senate. The rollout was accompanied by a press conference and a video addressed to Alaskans.

One amendment would constitutionally enshrine the traditional payout formula for the Alaska Permanent Fund dividend. The second would tighten the state’s existing spending limit. The third would require all new taxes or tax increases to be approved both by a vote of the people and by the Legislature.

Dunleavy said the amendments are necessary to bring long-term financial stability to the state.

“We just don’t want to live in the here and now anymore. We go year to year, lurch year to year, hoping that things will get fixed. ... But now is the time. There really is no tomorrow,” he told reporters.

Approving a constitutional amendment requires a two-thirds vote of the House, a two-thirds vote of the Senate and a majority of participating voters at the next general election. In this case, it would be the election of 2020, if lawmakers approve.

Thus far, the governor does not appear to have the legislative support he needs. Sen. Gary Stevens, R-Kodiak, said Wednesday morning that he opposes the governor’s concept. Stevens is a member of the Republican-led Senate majority, which has 15 members.

“All those do is tie our hands. If things go to hell in a handbasket, if the pipeline blows up, there’s not much we can do,” he said of the Legislature’s role if the governor’s amendments pass.

(The spending limit amendment does have an exception for declared disasters.)

Sen. John Coghill, R-North Pole and chairman of the Senate Rules Committee, said, “I think it would be wrong to say dead on arrival."

He did say that the proposals likely will create a great deal of debate in the Legislature and that he personally remains opposed to constitutionalizing the Permanent Fund dividend.

In the 40-person Alaska House, lawmakers have been unable to muster 21 votes to elect a permanent leader and there are still 17 members who voted in 2017 to implement the state’s first income tax since 1980.

Rep. Matt Claman, D-Anchorage, was one of those 17.

In a conversation with reporters, he said he’s tried to get amendments through the Legislature before.

“What I’ve learned is that it’s hard to get a two-thirds vote to get a constitutional amendment passed,” he said.

With that legislative situation in place, the governor will need a push from voters, who in turn must lobby lawmakers. He began that push even before formally introducing the bill.

“We need your help. This is your constitution, this is your government,” Dunleavy said in a video released Wednesday morning.

Speaking to reporters later in the day, the governor said his vision for the state’s financial structure is something like Colorado, where voters in 1992 approved a “Taxpayer’s Bill of Rights” that requires a statewide vote before any state tax is increased or imposed.

Alaska’s situation is somewhat different: Alaska has not had an income tax since 1980 and has no state sales tax. The most immediate effect of the proposed constitutional amendment would be to prevent the Legislature or its residents from easily altering the state’s oil taxes. Those taxes, together with the investments of the Alaska Permanent Fund, make up the majority of state government revenue.

The amendment would also preclude the state from altering minor taxes, such as the state’s alcohol, marijuana, or motor fuel taxes.

In Colorado, voters found their original amendment too restrictive and modified it in 2005. A Denver Post analysis in 2017 found that with revenues capped, lawmakers instead turned to fees as a means to raise revenue.

Beyond the elements of each amendment, Coghill and Claman each said there is a broader debate in the governor’s proposal. They strike at the heart of the balance of powers by taking taxation power away from the Legislature, the representative of the people.

“The public always get to weigh in. There’s 60 legislators,” Coghill said.

Dunleavy, talking to reporters, said he believes the purpose of a constitution is to limit the powers of the Legislature.

Claman said he believes the governor’s amendments would increase Dunleavy’s executive power, and that’s a matter of concern.

“I think it’s vital that the Legislature play its role as a check on the executive branch,” he said.