By ART CHANCE
Yesterday the media erupted with talk about “accounting quirks” and sweeps, like this is some sort of governmental arcana that only the initiates could comprehend.
It’s really pretty simple stuff and the bureaucrats mystify it to confuse the public and simple-minded reporters.
Here’s the first rule: The Alaska Constitution, with some very old and limited exceptions, prohibits dedicated funds; in other words, no general revenue can be dedicated to a specific purpose unless specifically appropriated to that purpose, and Operating Budget appropriations are only good for one fiscal year.
This is a real hindrance to bureaucrats.
I really don’t know if this stuff was around earlier, but I only became aware of something called “sub-funds of the General Fund” in the Nineties. Maybe they’d been playing this game all along and I only got far enough up the food chain to know about it by then.
Here’s the rule if you follow the Constitution: at midnight on June 30 any appropriated funds not expended or already obligated lapse back to the general fund. That’s why bureaucrats go on spending sprees in May and June; if you don’t spend it, you lose it, and not only do you lose it, if you don’t spend it your base is reduced for the next year. We can talk about how stupid that is later.
Somewhere along the way the bureaucrats developed the concept of sub-funds of the General Fund in which rather than lapsing money, they kept the money in their budget as what was essentially a slush fund.
In the Nineties when I worked for the Legislature, the great threat to the bureaucrats was sweeping the sub-funds. A sweep was DefCon 2, going to the Constitutional Budget Reserve and needing a three-quarter vote was DefCon 1 in Legislative nuclear war.
Sometime in the Palin/Parnell/Walker years the sub-funds came to be known as “designated general funds.” Frankly, there is no such thing and the whole concept is unconstitutional. There is no such thing as designated General Funds.
So what Legislative Budget Director David Teal et al. are talking about is what back in a sane world was once known as lapses: If you didn’t spend it, at midnight like Cinderella’s slipper, it disappeared into the General Fund.
The dirty little secret of State government is that it is nobody’s job to ensure that the State obeys the law and follows the rules, so unless somebody gets angry enough about something and is well-connected enough to get a powerful legislator’s attention, nobody is really going to look into what the Executive Branch does.
Here’s the reality: At 12:01 am on July 1, the State has no Operating Budget money. They can talk about sub-funds, but let’s talk about the appropriation that supports that sub-fund; there isn’t one. It is all a fiction.
The State has created some funds like Power Cost Equalization or the “forward funding” of Education. It is highly questionable whether any of these and other similar funds are Constitutional. Now, the current propaganda is a scare tactic for rural legislators; nobody in rural Alaska wants to pay what their electricity actually costs, but it is a legitimate question whether the PCE fund is legal; my thought is that it isn’t, but it is politically expedient.
So, we’re playing political “chicken.” I’m no fan of Power Cost Equalization, but I think we ought to at least have a robust debate about it. This is just “gotcha” politics. The State has money in coffee cans and mattresses on the 11th Floor of the Juneau State Office Building. If you want a sweep, sweep the sub-funds, sweep the “appropriated but unexpended” Capital funds. There is a lot of money lying around.
This isn’t an argument for a $3,000 Permanent Fund dividend, because I’m not a dividend fan; we have far too many lower class and emotionally disturbed here living off welfare, crime, and the dividend.
But Alaska isn’t broke; we’re just letting the bureaucrats dictate the terms of our budget.
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.
