Life, liberty, and property are safe again; the Legislature has adjourned. Thankfully, little was accomplished. Juneau has a new senator, Dennis Egan, the compromise choice brokered by Juneau Mayor Bruce Bothello. Gov. Palin relented from her insistance on Tim Grusendorf and a public vote yesterday afternoon and nominated Egan. Egan was confirmed by the Senate Democrats and sworn in a few minutes before the Senate adjourned last night. The Governor even made a cameo appearance in the Senate Gallery.
The operating budget is basically status quo spending and leaves many questions unresolved regarding how and whether federal “stimulus” funds will be spent. The Legislature has authorized acceptance of all available funds, about $930 million, but Gov. Palin has said she does not want to accept some of the funds. The Governor has line item veto power so it remains to be seen how the stimulus spending will play out. Many expect a special session to deal with stimulus issues and to possibly override the Governor’s vetos.
The capital budget at $1.8 billion would be considered substantial a few years ago, but is a dramatic reduction from the last couple of years when Alaska had unprecedented oil revenue. Line item vetoes in the capital budget are the way that Governors usually reward friends and punish enemies, so we’ll see what the Governor does.
The thing I found most interesting was the controversy between the Legislature and the Governor over how to pay for the shortfall between this year’s revenue and the proposed budget. The Executive Branch maintains and the Legislature suffers various funds styled sub-funds of the General Fund. Dedicated funds are unconstitutional in Alaska and all of these funds are probably illegal, but they have become a way of life. The are composed of all sorts of appropriated but unexpended funds, rent and fee income, investment earnings, and whatever else they can stash in coffee cans and mattresses. According to last year’s Comprehensive Annual Financial Report there was about $15 Billion lying around in such funds. Some legislators wanted to “sweep” all the sub-funds and use that money to bridge the short-fall of about $1.2 Billion. The Administration would have none of it and the Legislature was forced to tap the Constitutional Budget Reserve for the funding. Tapping the CBR requires a three quarter vote and is generally anathema to majority legislators since it gives so much power to the minority. If a minority legislator’s vote is really needed, he might as well have a ski mask and a gun because s/he can get anything for that vote. The fact that the Administration forced the Legislature to go to the CBR rather than the sub-funds is graphic evidence that the high-level ‘crats are calling the shots for the Administration. If you’re an Administrative Services Director in an operating agency, those funds are the primary source of your power. Clearly, the Governor is letting the ‘crats hold on to their honey pots. One of my strongest criticisms of the Governor has been her reliance on holdover appointees many of whom are Democrats or NPs appointed by Democrats (same thing just flying a different flag). She continues to do so and it is clear that they remain in charge of what should be a Republican administration.