Legislators say they’re unlikely to stop a split of Alaska’s health and social services agency

JUNEAU — Leading members of the state House and Senate say they are unlikely to stop a proposed split of Alaska’s Department of Health and Social Services into two separate agencies.

Under an executive order from Gov. Mike Dunleavy, the agency will be divided into a Department of Health and a Department of Family and Community Services.

The split was proposed as an efficiency measure to aid Alaska’s largest state agency. Opponents call it rushed and say those served by the agency have not been adequately consulted, an assertion disputed by Adam Crum, the agency’s commissioner.

The state Legislature has about two weeks to block the split, an act that would require backing from 31 of its 60 members meeting in a joint session. A disapproval resolution advanced from a House committee Tuesday, but legislators say it lacks the support to progress further.

If lawmakers don’t reject the proposal, the department’s split would take effect July 1. Legislators will have to act months earlier to craft budgets for the divided agency.

“It’s been a fait accompli that this is going to become law,” said Rep. Bryce Edgmon, I-Dillingham. “Thirty-one votes don’t exist in joint session. I think we know that.”

“At this time, speaking to the members in (the Senate), I do not see the support for a joint session,” said Senate President Peter Micciche, R-Soldotna.

A memo earlier this month identified errors in the governor’s executive order. The Department of Law responded to those problems in legislative hearings last month, allaying the concerns of some possible opponents.

With 3,259 employees and a budget of $3.4 billion, the Department of Health and Social Services is by far Alaska’s largest state agency.

Governors as far back as Frank Murkowski and Sarah Palin considered the agency unwieldy to manage and considered breaking it up but never advanced a plan to do so. In 2021, Dunleavy proposed splitting it into two agencies with an executive order but withdrew that idea after legislators identified problems.

Dunleavy introduced a rewritten executive order in January, and the revised proposal has received the support of the trade group representing hospitals and nursing homes, as well as various medical advisory boards.

Splitting the agency would cost about $2 million per year, the Dunleavy administration has estimated, but administration officials said those costs would be offset in future years by increased efficiency.

Support for the split is widespread among legislators and public interest groups who see it as a way to address management problems at various sub-agencies, including the Office of Children’s Services, Alaska Psychiatric Institute and the Division of Public Assistance.

“There’s not a lot of downside risk and there’s plenty of upside risk, and I think it’s worth taking that risk,” said Rep. Mike Prax, R-Fairbanks.

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Those who oppose the split say they believe the administration hasn’t done sufficient work to gather feedback from Alaskans who receive services from the department. They worry that services could be impacted.

Rep. Ivy Spohnholz, D-Anchorage, said “a slower, more methodical approach to this” is warranted.

Public testimony was mixed during a hearing Tuesday.

Sen. David Wilson, R-Wasilla, said he supports the split. He acknowledged the legal memo that found errors in the order but said those problems are not significant.

“There’s issues, but it’s minor stuff I think that can be worked out either next year or this year,” Wilson said.

Ideally, Wilson said, the Legislature would introduce and pass a “cleanup” bill to fix problems with the wording of the order. Political concerns may derail that idea, Wilson and other legislators said. They’re concerned that a cleanup bill would be amended to include COVID-19 vaccination issues, causing it to fail.

The impending general election is also a factor.

Rep. Zack Fields, D-Anchorage, said he is somewhat concerned that the executive order is coming in what could be the last year of Dunleavy’s term.

Laura Bonner, a member of the public who identified herself as the mother of a disabled adult, testified against the split.

“There’s an election coming up, and I don’t think an issue this important should be done at the end of this governor’s term,” she said.

Asked about that concern, Crum said the split is the result of an apolitical process put forward by staff.

“We have are continuing this because this is the right thing to do to set up the department and Alaska for success,” he said.