Shutdown-averting deal takes shape in Alaska House, with vote expected Monday

JUNEAU — Members of the Alaska House of Representatives are planning to vote Monday on a deal to avert a statewide government shutdown that would begin July 1.

Under the deal, members of the House’s coalition majority will vote for an agreement that sets a loose agenda for an upcoming special session of the Legislature. In exchange, members of the House’s Republican minority will vote for budget language that averts the shutdown.

“I’m happy to say that I believe there’s going to be a resolution and there will not be a state shutdown,” said Speaker of the House Louise Stutes, R-Kodiak.

“I’m very optimistic that we will see a resolution on Monday,” said House Minority Leader Cathy Tilton, R-Wasilla. “I would agree with the Speaker at this point in time.”

Many members of the House were absent from Juneau on Friday, and Stutes said Monday’s vote will allow legislators to return to the Capitol.

“Monday is the ‘come to Jesus’ meeting,” said Rep. Adam Wool, D-Fairbanks.

On June 15, minority Republicans in the House voted against a timing clause that allows the budget to take effect on July 1, the start of the state’s fiscal year.

That clause needs 27 votes in the 40-person House, but it received only 23. Only two of the 18 members of the House’s Republican minority voted for it.

Members of the Legislature and outside attorneys have urged Gov. Mike Dunleavy to sign the budget without the “effective date clause.” They say other parts of the state’s inch-thick budget bill allow it to take effect on time. Dunleavy said he disagrees with that interpretation and has called the budget “defective” without it.

Lawmakers are now up against a tight deadline. If they and Dunleavy don’t reach agreement and finish the budget before Thursday, the state will crash into a shutdown.

A vast array of state services will stop overnight, and the state could face an immediate bill of up to $190 million as state employees are fired and receive contractually mandated payments for their accrued vacation time.

“Timing is the key thing because on Tuesday, state employees start cashing in their leave time, and we want to avoid that,” Stutes said on Thursday.

Attorney General Treg Taylor has filed a preemptive lawsuit against a legislative agency in an attempt to get a state judge to determine whether the budget is defective or not.

That case is scheduled to be heard on Tuesday but could be rendered moot if legislators reach an agreement on Monday. The Legislature has hired national law firm Stoel Rives to represent it in the case. The Legislative Affairs Agency’s executive director said the cost of that representation was not immediately available.

The leaders of the House and Senate have held regular closed-door meetings in an effort to negotiate through a budget struggle that has left Alaska without a budget for the upcoming fiscal year.

Senate Minority Leader Tom Begich, D-Anchorage, said that if House legislators include their agreement in a legislative resolution or a document called a “sense of the House,” it wouldn’t be legally binding but would still have some power over the Legislature’s future actions.

“It’s always harder to walk back something that’s in writing,” he said.

Stutes and Tilton said Friday afternoon that they aren’t willing to share the text of the tentative agreement.

“We’re still fine-tuning everything,” Stutes said.

No deal is certain, and other lawmakers are more cautious.

“The majority and minority are both talking in the same direction with it, but we’re not there yet,” said Rep. Steve Thompson, R-Fairbanks, on Thursday evening.

Members of the House minority have been asking for action on a long-term state fiscal plan, and while individual Republicans disagree on what that plan might look like, many are supporting a constitutional amendment proposed by the governor.

That amendment would constitutionally guarantee a Permanent Fund dividend, but at a level that would require the state to either significantly cut spending or impose new taxes. That uncertainty has left members of the House majority unwilling to support it as currently written.

Members of the majority have proposed different fiscal plans, but none have advanced to a vote on the floor of the House. That has generated skepticism among members of the minority who want a reliable long-term formula for the dividend.

“There’s a lot of talk, but is there follow-through?” said Rep. Ken McCarty, R-Eagle River.

He said he’s talked to constituents who say they don’t care if there’s a government shutdown as long as they can go fishing. With fishing licenses available online, they believe they can.

Tilton said she’s heard from those who say a government shutdown is worthwhile if it forces the Legislature to act on a fiscal plan.

“There is a segment of people who are saying that if that is what it takes, then that is OK,” she said.

On Wednesday, Senate President Peter Micciche, R-Soldotna, said that even if House Republicans vote for a shutdown-averting deal, portions of the budget will remain unfunded because full funding requires three-quarters of the House and Senate to agree.

That means the minority still has the ability to force action.

“That’s their right to hold out for what they see as a better deal,” he said. “But holding on to every lever at this point, I’m thinking about how that will affect the public. I think the three-quarter vote ... is adequate leverage if that’s their goal.”