The House and Senate are indicating they’ll see the governor in court over the legality of appropriating Education before there are actual revenues to fund it.
In Senate Finance today, Senate members asked a liaison from the Department of Law and a budget analyst from the Office of Management and Budget if the governor would veto the education funding in the current 2020 budget, which appropriates education funding for 2021 — but not for 2020. The 2020 fiscal year starts July. The Legislature says it funded the 2020 budget last year
The answer was yes.
If there’s no money in hand, the Legislature can’t appropriate it and the governor can’t release it, said Cori Mills, speaking on behalf of the Department of Law, which issued the decision through Attorney General Kevin Clarkson.
With the governor likely to veto what he and Clarkson see as unconstitutional forward-appropriation, the Office of Management and Budget also indicated that unless resolved, funding won’t go out to the districts in July “without a valid appropriation.”
That would mean pink slips unless the court moves with haste.
Sen. Natasha Von Imhof was not convinced of the invalidity of the appropriation done in 2018 for the 2020 budget.
She mentioned the money in the Constitutional Budget Reserve and the Permanent Fund Earnings Reserve Account. “There’s a lot of money in there right now. If the markets tank, there will not be a lot of money in there. If this body decides to move a good portion of the funds into the principal, there will not be a lot of money. So there’s a lot of unknowns at any given time. Whether it’s this body and your assumptions of where the money’s going to come from … So to sit there and say we did not have the money a year ago, we certainly did, and still do.”
Sen. Donny Olson asked if the Fiscal Year 2020 budget is funded by 2020 revenues or are those revenues from 2019. Lacy Saunders of Office of Management and Budget answered that funds for the 2020 budget come from revenues received in 2020 fiscal year, unless they are drawn from savings.
Sen. Bill Wielechowski asked Cori Mills of the Department of Law why, in the years between 2006-2015, with all the various attorneys general Alaska has had, none of them had ever flagged forward funding as an issue during the multiple bill reviews that have occurred.
Mills responded that those forward-funding bills were different because “they took surplus revenues, put them into the public education fund, and it then sat in the fund, and basically the fund was overfunded for two years worth of education funding, using the revenues that came in that forthcoming fiscal year. It wasn’t the case that it had a future effective date where you are taking future revenues past that forthcoming fiscal year.”
“Why is that different?” Wielechowski asked.
“Because the Constitution envisions an annual process where the Legislature looks at the revenues that are going to be coming in in the forthcoming fiscal year, and they have the responsibility on how those are supposed to be spent,” Mills said. “If they want to overfund the public education fund and have it available for multiple years, that’s fine, but you can’t tie the hands of a future legislature and future governor on revenues that are going to come in past that forthcoming fiscal year. That’s taking revenues that aren’t even on the table yet and setting them aside.”
Mills said that when the Department of Law looked back 10 years, it could not find another example of a Legislature appropriating funds with the same set of facts.
“I think we have an honest disagreement as to the appropriating powers vested in the Legislature that has not been clarified by the third branch of government, which is the courts,” said Sen. Bert Stedman, cochair of the Finance Committee.
“Having a friendly lawsuit…probably makes sense,” said Sen. Von Imhof.
Meanwhile, today representatives from the Governor’s Office toured sites in Wasilla in anticipation of a second special session, which would be called to hammer out unfinished business, such as the amount of the Permanent Fund dividend and, perhaps, education funding.
The sites being looked at are Wasilla Middle School and the Wasilla Sports Complex. Along with Jeremy Price, deputy chief of staff, was a computer/information technology person and Wasilla Mayor Bert Cottle.