Bradners’ Alaska Legislative Digest - Special Commentary Report Publishers Tim and Mike Bradner, [email protected]: com, (907) 440-6068 or Mike: (907) 242-6572 Digest No. 44/19 July 23, 2019 New bill on House floor today A new bill, HB 2001 will be on the House floor today. It’s more or less “everything,” and would reverse most of Gov. Dunleavy’s veto cuts, and could fund a $1,600 dividend. The measure will likely draw another prolonged debate with the House minority submitting an exhausting stream of amendments. The bill would provide a dividend based in funds that remain after other cuts are restored. However, the bill and what not restores would be subject (again) to vetoes by the governor. The strategy of this bill by the House majority is a little unclear, but somewhere the measure might provide the basis for real compromise. However, the measures again will put the House minority through the “exposure wringer,” forcing them to vote on a long list of cuts becoming increasingly sensitive to their constituencies. The bill would restore $110 million of the governor’s cut to the University, leaving a $20 million cut. Again, the governor could veto funds, or exercise a “partial veto.” The bill offers the governor opportunity to do some picking and choosing. This whole mess, of course, is the product of the governor. However, the House Finance Committee late Monday Moved a CS for HB 2001 to the Yesterday - for the lack of “one vote” Rules Committee. It will appear on the House calendar The House Monday failed to salvage critical funding, including almost a billion Federal drop-dead date July 31 in federal constructional funds, by a margin of one vote. The three-quarter vote to access needed funds from the Constitutional Budget Reserve failed 29 to 7 with four If SB 2002 fails on rescinding then a new bill will have to be introduced with the federal members absent. Absent were Rep. Mark Neuman, R-Mat-Su, and David Talerico, R- drop-dead date of July 31 to close for comfort. This is the date when the federal funds could Healy for health reasons, as well as Rep. George Rauscher, R-Mat-Su for undisclosed be lost and distributed to other states. reasons, and Rep. Ben Carpenter, who was tending his peony farm on the Kenai. - Continued next page 6068 for permissions. for 6068 - 440 (907) call Please blications. pu : The Alaska Legislative Digest and the Alaska Economic Report are copyright copyright are Report Economic Alaska the and Digest Legislative Alaska The : © Copyright © However, the House Finance Committee late Monday Moved a CS for HB 2001 to the Rules Committee. It will appear on the House calendar Federal drop-dead date July 31 Voting no on the CBR draw . - Continued from previous page Under legislative rules the House has one more crack at the bill by a rescinding motion. The seven “nay” votes on the CBR draw were: Mat-Su Reps. David Eastman; Sullivan-Leonard; Tilton; and Johnson; plus Anchorage Rep. Sharon Jackson; Homer Rep. Sarah Vance; Fairbanks Rep, Tammie Wilson; Rep. Sarah Vance, Homer, and Rep. Tammie Wilson, Fairbanks, all Republicans. At stake are up to 15,000 construction jobs according to the Associated General Contractors (AGC). The AGC statement should be a wake-up call. However, the House Finance Committee late Monday moved a CS for HB 2001 to the House Rules Committee. It will appear on the House calendar as this is this report is sent to Yesterday - for the lack of “one vote” Federal drop-dead date July 31 The House Monday failed to salvage critical funding, including almost a billion in If SB 2002 fails on rescinding, or the motion isn’t exercised, then a new bill will federal constructional funds, by a margin of one vote. The three-quarter vote to access have to be introduced, or the text inserted in another bill. Meanwhile the federal drop- needed funds from the Constitutional Budget Reserve failed 29 to 7 with four members dead date July 31 is getting too close for comfort. This is the date when the federal funds absent. Absent were Rep. Mark Neuman, R-Mat-Su, and David Talerico, R-Healy for could be lost and distributed to other states. Health reasons, as well as Rep. George Rauscher, R-Mat-Su for undisclosed reasons, and Rep. Ben Carpenter, who was tending his peony farm on the Kenai. Under legislative rules the House has one more crack at the bill by a rescinding motion. The seven “nay” votes on the CBR draw were: It’s sort of a mystery who is in charge in the House minority. Rep. Tammie Wilson has done a rapid transformation from majority to minority, Minority Leader Rep. Lance Pruitt looked a little bewildered after the CBR vote crashed Monday by a single vote, and then there is Rep. Delena-Johnson, who is apparently leader of the Mat-Su faction. Page 2 Alaska Legislative Digest, 44/19 Constitutions should consist only of general provisions; the reason is that they must necessarily be permanent, and that they cannot 1 calculate for the possible change of things. Alexander Hamilton -Alexander Hamilton University Regents declare financial exigency The University of Alaska voted to declare a financial emergency facing the University by a 10 to 1 vote Monday, July 22. Only regent Lisa Parker voted no on the resolution. The declaration is a tool that allows UA President Jim Johnson to develop a plan to restructure the university. A national debt, if it is not excessive, will be to us a national blessing. Alexander Hamilton Read more at: https://www.brainyquote.com/authors/alexander_hamilton Johnson said he will have a plan for another emergency regents’ meeting set for July 30, and a more detailed plan at the regents’s next regularly scheduled meeting on Sept. 12. If circumstances change the resolution can be altered or even withdrawn, but the outlook for any substantial change is grim. Hamilton on our fiscal procrastination . In an unusually blunt statement Johnsen said: “None of us wants to be here today.” The inquiry constantly is what will please, not what will benefit the people. In He added: ”As I look at the faces of students, faculty and staff - their anxiety and their such a government there can be nothing but temporary expedient, fickleness, loss - I wonder how our university, something so great, that has been built up by so and folly. Alexander Hamilton many for so long, be crippled by so few so quickly.” This is not a financial crisis, he said, because the state has adequate funds, but a political crisis brought about by the governor and a handful of Republican legislators in the House who have the power to block measures. Exigency - only card left to regents The university declaration of financial emergency - fiscal exigency is the legal term - is a result of a massive $136 million (41 percent) reduction in state funding, projected additional losses from declining enrollment and reduced research activity, and the lack of sufficient reserves to fund current operations through the year, Johnsen said. “Given the poor hand we have been dealt, financial exigency is the only tool available to us. It will allow us to plan for our continuing mission,” President Johnson said. Gloria O’Neil, a regent, said, “We will not have a university after February if we don’t make a move.” Several regents commented that they reluctantly voted for the resolution from an expectation that the political situation is unlikely to change in the next few days given the position taken by Gov. Dunleavy, who recently imposed a major veto for the university and the House Republican Minority who have so far blocked resolution of key budget issues. - Continued on next page Page 3 Alaska Legislative Digest, No. 44/19 2 A major restructuring in just month - Continued from previous page Even if some funds are restored the reductions will still be so drastic as to require a major restructuring of the - 100 year old - university in a matter of months. If changes are not made quickly UA will be out of money early next year, Johnsen said. The basic math is grim. To accommodate Dunleavy’s reduction $47 million will be cut from the University of Alaska Anchorage budget of $104 million in state funds; $67 million will 262,851 be cut from the University of Alaska Fairbanks budget of $126 million, and $10 million will be cut from the University of Southeast budget of $21 million. This assumes no reduction in student enrollment, and that student enrollment stays the same, and that tuition revenue remains the same. There are other budgets that will have to be cut, such as $45 million for facilities maintenance and $18 million for statewide administration support. The university also spends about $22 million supporting research mainly at the Fairbanks campus, much of which is used to match federal research dollars. What makes matters worse is the timing. Students have already enrolled in the fall semester that begins in August, and the university has made commitments to faculty to teach courses. What this means is that the institution is unlikely to be able to achieve major budget reduction in the fall, so major saving will have to come in the spring semester. “That’s when the real impact hits,” Johnsen said. “I still have hopes something will happen in Juneau,” Johnsen added. “How can our University, something so great, that has been built up by so many for so long, be crippled by so few so quickly?” “This is not a fiscal crisis, he said, because the state has adequate funds, but a political crisis brought about by the governor and a handful of Republican legislators in the House who have the power to block budget measures.” - University of Alaska President Jim Johnsen Page 4 Alaska Legislative Digest, No.