Legislative attorney finds errors in Dunleavy’s proposal to split Alaska’s health department

A new legal analysis finds a Dunleavy administration executive order to divide the Alaska Department of Health and Social Services contains numerous errors and adds ambiguity to state statute.

The 11-page memo by a legislative attorney suggests the order is so substantial it may represent an overreach of executive power. The memo recommends making the changes via legislation instead, allowing lawmakers to fix drafting errors and oversights and make policy decisions where necessary.

Lawmakers have until mid-March to decide whether to reject the order or let it become law as of July 1.

The Department of Health and Social Services is the state’s largest agency, overseeing programs for some of the state’s most vulnerable populations. The department’s biggest job is to oversee Medicaid, the state-federal program that provides medical coverage to one in three Alaskans, but it also handles programs and services including the Office of Children’s Services and Pioneer Homes.

Gov. Mike Dunleavy’s order would create a two agencies: the Department of Health, made up of programs like public health and public assistance that provide regulatory oversight and claims processing for Medicaid programs; and the Department of Family and Community Services, made up of the Division of Juvenile Justice, Office of Children’s Services, Alaska Pioneer Homes and the Alaska Psychiatric Institute.

Implementing the change is expected to cost nearly $2 million.

Rep. Tiffany Zulkosky, D-Bethel, co-chair of the House & Social Services Committee, said the committee requested the analysis of the constitutionality of the executive order from legislative attorneys.

Zulkosky said that while she welcomed the conversation the executive order has started, she’s also interested in analyzing the proposal in light of the finding that significant elements could substantively change state law.

“That, as we know, is a power vested solely in the legislative branch, not the executive,” she said.

The committee plans to review the memo at a meeting Saturday.

A spokesman for the governor’s office said the Department of Health and Social Services was the best agency to respond to the memo.

The department was still developing a detailed response after receiving the memo Tuesday afternoon, spokesman Clinton Bennett said in an email.

“Upon initial review, major components of the memorandum are surprising and appear contradictory to previous Legislative legal opinions,” Bennett wrote. “The department worked closely with stakeholders on the development of EO 121 and remains committed to improving services for Alaskans through the proposed executive order.”

Dunleavy withdrew a similar proposal last session after it ran afoul of “technical issues” within a prior executive order. The order also drew concerns from some community and tribal organizations.

The governor issued the new executive order at last month’s start of this legislative session.

The order makes the “beast” of a department into a more “appropriate-sized government” of two streamlined agencies with separate commissioners, Health and Social Services Commissioner Adam Crum said at a December press briefing. He promised no leadership changes or office moves to public-facing departments such as the Office of Children’s Services or Division of Public Health and said the brunt of the split would fall on internal divisions like payroll, finance and IT.

A section of the Alaska Constitution allows the governor to make such a change via executive order because the proposal won’t create a substantive change in the law, Crum said.

That’s debatable, according to the analysis by Legislative Research Services, a nonpartisan agency that responds to requests for information and analysis from individual legislators and legislative committees.

The “breadth of statutory changes” contained in the 100-plus-page executive order is unprecedented, making it look more like a bill than any previous order, the analysis by legislative counsel Andrew Dunmire found. The new order makes numerous amendments to existing statutes, enacts and repeals more than 100 statute sections, and amends policy now codified in statute.

Dunmire found several dozen sections of the order that “warrant the (L)egislature’s consideration,” including poor drafting techniques or the introduction of statutory inconsistencies.

The constitution permits the governor to “make changes in the organization of the executive branch,” Dunmire wrote. Prior governors have used executive orders to merge two departments and move functions from one to another.

There is precedent for splitting an existing department into two — then-Gov. Bill Sheffield’s move to split the state’s prison system from the Department of Health and Social Services — but “little authority sheds light on the permissible scope of an executive order,” he wrote.