Recap & Upcoming: Special Sessions of the Alaska State Legislature
If you had a moment to sit and read the news this summer, you probably saw something about the Legislature. That’s because since the conclusion of the First Regular Session on May 19th, the 32nd Alaska State Legislature has held three special sessions in Juneau – and with a fourth starting October 4th, it’s not quite over yet.
Given Alaskans have different ideas of how the state operating budget and Permanent Fund Dividend (PFD) should be handled, the budget process seems to take longer and longer each year. Yet, as tiring as it can be, we thank you for efforts and support through the process. While we always have more work to do, our collective voice is critical to ensuring that through it all, our children, youth, and families are protected and thriving.
In this issue, we’ll walk through some highlights of recent legislative happenings. Skip ahead by clicking on the session you’re interested in.
Special Session #1-2: the budget & vetoes
At the end of the 120-day regular session in May, the House and Senate hadn’t come to an agreement on two key budget bills – the operating budget (HB 69) and the mental health budget (HB 71). While both chambers had voted on the budget bill, the differences in each version still had to be worked out. As a result, the Governor called two immediate, back-to-back sessions in Juneau to give them more time to complete the process.
By the end of the second special session on June 28th, the Legislature passed a balanced budget and a $1,100 PFD. This budget provided flat funding (meaning funding neither increased or decreased from last year) for many key programs in the state, including K-12 public education. However, one critical piece was missing – the 3/4 vote.
To authorize spending money in the state budget, only a majority vote is needed (21 out of 40 votes in the House; 11 out of 20 in the Senate). However, some parts of the budget, including half of the PFD, were funded out of a savings account called the Constitutional Budget Reserve (CBR). This savings account requires a 3/4 vote to access. Unfortunately, that vote failed in both the House and the Senate, leaving the budget passed, but partially unfunded.
The budget then went to Governor Dunleavy. When the budget hit the Governor’s desk, he vetoed a number of items before signing, including the $525 PFD because he felt it was too small (as it was only partially funded). However, we at ACT were disappointed and saddened to see additional vetoes by the Governor cutting important resources for children and families, such as Pre-K grants, frontline social workers, civil legal aid to survivors, and more.
Special Session #3: the budget and reverse sweep
Originally, the Governor had called a third special session starting August 16 to address some of his proposals to change the constitution and talk about new revenues. However, with a partially unfunded budget and no PFD, it all came back to the budget.
For Alaska’s children and families, ensuring some form of PFD and restoring the Governor’s vetoes were top issues. In the end, positive movement was made on this front, with the Legislature passing an additional budget bill (HB 3003), containing an $1,100 PFD and some, though not all, veto funding restored.
Yet this round, one more issue came to the forefront as well – the “reverse sweep.”
When the 3/4 CBR vote failed in the Legislature in June, a provision known as the “reverse sweep” also failed. This initially created a big problem for funding afterschool, Alaska Performance Scholarships, WWAMI, and other programs this year. Fortunately, the situation improved during third special session and the issue is resolved (for now). Here’s a recap:
The Reverse Sweep -- How it normally works:
The State of Alaska has dozens of savings accounts that hold funds for specific programs.
In 1990, voters approved a constitutional amendment requiring all funds in those accounts to be drained at the end of each fiscal year (11:59pm on June 30), and deposited into the state’s main savings account: the Constitutional Budget Reserve (CBR).
However, the Legislature designs the budget to use those savings accounts for their designated programs. Draining the accounts year to year leaves no money for that.
Therefore, each year the Legislature passes a “reverse sweep” as part of the budget, which redeposits all “swept” funds back in their program accounts at the start of the new fiscal year (12:01am on July 1). This requires a 3/4 vote of both the House and the Senate to pass.
What happened this year (the problem):
In recent years, the 3/4 vote has been caught up in budget negotiations. Because minority member votes are needed for it to pass, it has become a bargaining chip in the budget process.
In June, while the Legislature passed a budget authorizing spending, the 3/4 vote failed.
Therefore, at 11:59pm on June 30, all program funds were “swept” to the CBR. This left a zero balance for many programs when the new fiscal year began on July 1.
Current status (and temporary solution):
Initially, the thought was that the Legislature would have to pass a new bill containing “reverse sweep” language to get funds back in program accounts.
However, part-way through session, the Dunleavy Administration announced a reinterpretation of the “sweep” law: because the Governor had signed the budget on June 30 (before the “sweep” occurred at 11:59pm), all funds appropriated in the budget were already authorized and therefore protected from the “sweep.”
At the direction of Governor Dunleavy, all FY22 program funds are now being distributed by the Office of Management and Budget (OMB).
Therefore, this year’s “reverse sweep” issue is resolved, despite some program delays at the start of the fiscal year. However, this solution isn’t perfect, and doesn’t keep it from happening again during next year’s budget process. For now, we are thankful that programs such as those supported by our very own Afterschool Network are back on track.
Special Session #4: new revenues
This year’s budget may be resolved, but Alaska continues to struggle with deficits each year, making new revenue an ongoing hot topic – and one that needs to be resolved. Alaska’s traditional revenue streams (e.g. oil and gas) aren’t as strong as they used to be. Therefore, without some kind of new state revenue, essential services will continue to be on the chopping block, including those that support our kids most.
The legislature will gavel in for its fourth special session on October 4th. While there are many items on the agenda, one primary topic is a comprehensive fiscal plan, including ideas for new state revenue.
As the Legislature considers new revenue options, ACT remains committed to ensuring the welfare of children and families are top of mind. In 2017, Alaska Children’s Trust commissioned the UAA’s Institute of Social and Economic Research (ISER) to publish a thorough, independent analysis of eight state revenue proposals and their impact on children and families. Still relevant, this study is again being shared with elected officials. Click HERE for the research summary, or HERE to read the full report.
ACT supports the outcomes of this study and keeping children and encourages any changes to current or new revenue sources have the least negative impact on children and families.