Light at the end of the tunnel? That’s a train

Photo of author Art Chance
Art Chance



To no one’s surprise, there was no budget at the end of the regular legislative session on May 17.

To my slight surprise, the governor immediately called for a special session to begin at 11 am on May 18.

I thought he’d wait a bit to let the Legislature stew some and to put more time pressure on them.

The Legislature has 12 days to agree to an operating budget or layoff notices must go out to most State employees on June 1st for an impending layoff effective at 12:01 am on July 1.

Many other employers reliant on State funds will also begin issuing layoff notices.

The ferry system will begin to put up notices of potential cancellations of sailings.

The State-operated airports will also give notices of a potential cessation of operations.

Both the ferries and the airports have some program revenue with which they could continue at least limited operations, but they have no authorization to spend program receipts absent an authorizing appropriation.   Then it gets serious.

Jim Duncan, a former legislator and commissioner of administration and now the business manager of the 8,000-odd member Alaska State Employees Association, tried to sound optimistic in his remarks for the Rogoff Rag. He acknowledged that the pink slips are likely to go out, although he predicts it will be resolved with a compromise before July 1.

I don’t know how honest Jim was really being, but he needs to put on a brave face because his members will panic when they get those notices.

As July 1 gets closer, the unions will begin encouraging their members to cash in leave. The union-owned Walker Administration will cooperate with that, though it shouldn’t, but the State doesn’t appropriate for leave, so many agencies may have difficulty paying for leave cash outs this close to the end of the fiscal year.

Supplemental appropriations are on the call for a special session so some agencies may already be out of money. The State pays two weeks behind, so if employees get laid off on July 1, they’re entitled to one more pay check for the last two weeks of June. Some are on different schedules and may have a different pay schedule, but pretty much all will be entitled to one more pay check and that’s it.

The State is self-insured for unemployment insurance but I don’t know how it would get paid or who would be working to process the claims. The Department of Labor has program receipts so it could keep some operations going, but like the ferries and airports, it won’t have an authorizing appropriation on July 1.

This is unknown territory. So far as I know, the State has never before reached the end of the fiscal year without some sort of authorization to operate. Unless an accommodation is reached between the House, Senate, and Governor, the government of the State of Alaska virtually ceases to exist on July 1.

There may be some appropriated but unexpended capital funds that don’t revert to the General Fund, but the State can’t buy anything, or pay for anything, and unlike the federal government there is no way to assure continuity of operation of even the most vital services.

Democrats have made much of “throwing Granny over the cliff” in federal shutdowns. In a State shutdown, there won’t be anybody at work to throw her over the cliff or keep her from going over it on her own because the most vital State services are paid for almost entirely from general funds.

At 12:01 am on July 1 the Alaska State Troopers cease to exist, as do the courts, the State lawyers, including State paid defense attorneys, and the prisons.   Many, probably most, of these employees would come to work on faith that they would eventually be paid, but they cannot be compelled to if there is no money to pay them.

The Pioneers’ Homes, API, the juvenile detention centers, the welfare offices, the people who handle the Medicaid funding and other funding will be at work only if they’re willing to volunteer and hope that they get paid.

Finally, there is no assurance whatsoever that the unions will cooperate with employees working as volunteers; this is after all their bought-and-paid-for Governor and House Majority at loggerheads with the Republican Majority in the Senate.

If the State has done any continuity of operation planning, they’ve been awfully quiet about it. My money is on their not having done any because they’re that confident the Senate will fold.

In the past, there was strike planning,  but that always assumes that the most vital functions will not be on strike and there will be at least appointee-level management in place. I suspect those old strike plan books are deep in archives now. No one  is left in Labor Relations who was involved in any of it, and I could probably count on my fingers the people left in State government who ever participated in it or had ever seen a layoff notice until Walker made the feint with one a couple of years ago. You couldn’t just open the old notebooks and start following the plan, but they would give a lot of insight into continuity of operation planning.

Duncan expressed his belief that there would be a “compromise,” but it is hard to visualize just what that compromise would look like. Duncan is Alaska AFL-CIO President Vince Beltrami’s second in command and his union is the single largest group in the AFL-CIO.

That makes Duncan a principal in the ownership of the governor and the House majority and it is evident the AFL-CIO and its allies will not accept any budget cuts that impact Democrat constituencies, and they will not accept any cuts to the Operating Budget that will result in any reduction in the pay or the numbers of unionized State employees.

So, it appears there cannot be a compromise. The only options are a capitulation by the Senate or a government shutdown; there is no Door C.

Art Chance is a retired Director of Labor Relations for the State of Alaska, formerly of Juneau and now living in Anchorage. He is the author of the book, “Red on Blue, Establishing a Republican Governance,” available at Amazon. He only writes for Must Read Alaska when he’s banned from posting on Facebook. Chance coined the phrase “hermaphrodite Administration” to describe a governor who is both a Republican and a Democrat. This made the Left very mad at him.