Dunleavy doubles down on shutdown threat
June 24, 2021
Dear Neighbor,

While Mike Dunleavy has been focused on planning political fundraisers with Donald Trump, the legislature convened for a special session that resulted from his failure to enact the budget we already passed. We have two paths forward:

  1. More House minority members join Bart LeBon and Steve Thompson in voting for the effective date, which requires 2/3 to pass—this would eliminate the Governor’s flimsy pretext for a shutdown.
  2. The Governor could simply implement the budget that has passed. Its retroactivity language means passage of the effective date isn’t necessary for the budget to be implemented.

Unfortunately, Dunleavy is doubling down on his threat of a shutdown. His staff released a new budget with—guess what—a mega-dividend paid for by raiding the Permanent Fund. This new budget represents shameful posturing. Obviously it is not possible for the legislature to consider and pass a new budget in a week. In addition, the Governor filed a bizarre and unconstitutional lawsuit in which his administration sued the Legislative Affairs Agency and asked the courts to preemptively grant him authority to shut down the government despite our passage of the budget. Since the Constitution prohibits the Governor from suing the legislature, and since our laws don’t permit “advisory” (or hypothetical) legal opinions, expect the Governor’s lawsuit to be dismissed. But dismissal of that suit doesn’t resolve the threat of a shutdown he has created.

Dunleavy is throwing House minority members under the bus by trying to have them take the fall for an unnecessary shutdown. But if neither they nor the Governor relent, Dunleavy seems intent on shutting down state operations on July 1. Here are just a few of the consequences:

  1. Shutting down the Permanent Fund means loss of millions, and potentially tens of millions, in Permanent Fund earnings—ironically, reducing future dividends and funding for services.
  2. In a shutdown, state employees must be paid out for accrued leave, costing some $200 million. Again, this will reduce funds available for operations and dividends.
  3. State employees will be laid off and Dunleavy wants to block back pay following resolution of the shutdown. It is unclear if he can legally not issue employees’ pay in this manner, and legislators are researching this issue.
  4. Shutting down agencies will shut down new home sales, commercial fish openers and closers, natural resource permitting, PSP testing for shellfish operations, marine highway operations, occupational licensing, and numerous other state functions that are necessary for commerce. This would have a significant negative impact on job creation at a time we should be working on economic recovery.
  5. The administration has published a list of programs they will shutter and programs they will keep operational. Senior Benefits, National Guard Headquarters, Veterans’ Services, Department of Corrections Domestic Violence & Recidivism Reduction programs, WWAMI Medical education programs, Performance Scholarships, and Pre-Kindergarten Grants will all be shut down at the call of the Governor.

A wide range of business organizations are advocating against the Dunleavy shutdown. I hope the Governor will listen.

Majority members have already passed a budget, and every single one of us (and Reps. Thompson and LeBon) voted for the effective date clause AND the CBR draw necessary to fund budget functions and the $1,100 dividend. Our leadership is trying to persuade additional minority members to support the effective date clause and avoid a shutdown, but it remains in the Governor’s power to simply enact this budget.

I remain stunned that the Governor would even consider shutting down the government, when it is logistically impossible for him to get the mega-dividend that he wants in exchange. As you know, we already have a special session called in August and if the Governor really wants to deliver on a giant dividend then he needs to come up with a plan to pay for it, because it is clear a majority of legislators will not allow a raid on the Permanent Fund.

See you around the neighborhood,
Summer Downtown!
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