What if there is no budget deal by July 1? - Must Read Alaska
Connect with:
Wednesday, July 15, 2020
HomeColumnsWhat if there is no budget deal by July 1?

What if there is no budget deal by July 1?

Art Chance



The Legislature is bogged down over the demands of the union racket, the education racket, and the healthcare racket versus the will of the rest of the people of Alaska.

For the last four years, the Republican Senate either had to sign off on something the rackets and Gov. Walker would accept, or shut down the government on July 1.

Now with a new governor, the Senate and the governor have to buy off on something the rackets will accept or shut down the government; it’s a distinction without a difference.

There still is no Door C.

The Legislature and the governor have to come up with an operating budget by June 1, or most all State of Alaska employees will be given formal notices of impending layoff, which would occur on July 1; the rules and contracts require 30 days notice, so the notice would go out June 1.

I’ve explained this several times, but one more won’t hurt; a layoff is not a dismissal. A dismissal, colloquially a firing, is a complete separation of the employment relationship; the employee gets paid any pay due, any accrued benefits with cash value, and has no expectation of further employment with the employer.

A layoff is not a separation of the employment relationship; it is just a notice that because of lack of work or funds there is no work for you, but when there is funding or work, you will be returned to work with your former status, rights, and benefits.

Those notices will cause a lot of wailing and gnashing of teeth; only the highest level State employees can miss a paycheck without serious economic pain. State employees generally have very little savings because they have accrued leave with cash value, and if worst comes to worst they have their SBS and Retirement to fall back on.

That said, the SBS and Retirement requires quitting State service to get to, and that’s the first step on the former employee’s trip down the Alcan.

Unless the employee or his union is planning for it and does it in advance, cashing in leave has to be done before the government shuts down, or the leave money isn’t accessible. In my strike contingency planning I always assumed that missing the second paycheck was the tipping point. When the second pay check didn’t come, most GGU employees would be begging to come back to work.

At 12:01 am on July 1, 2019, if there isn’t an operating budget, the State of Alaska government ceases to exist. The State isn’t like the federal government that has all sorts of pockets of funding that allow various functions to go on.

At 12:01 AM on July 1, the State literally has neither the money nor the authority to operate. Somewhere in June the Marine Highway System will start putting up the notices that it can’t guarantee voyages beyond July 1. The State airports, notably Anchorage and Fairbanks, will do likewise. The Governor could send over bills giving the AMHS and the Airports program receipts authority so they could operate on their revenue, but why would the House pass them?   We’re talking inflicting pain here.

I wouldn’t count on the House Majority surrendering; leftist arrogance knows no bounds.   So, either the Senate and the Governor are going to surrender or there is going to be one Helluva train-wreck on July 1. I don’t think cops, COs, Pioneer Home attendants and the like will actually walk away from their work even though the State can’t offer them an assurance of being paid.

That said, the State can’t make them come to work if it can’t pay them, and the unions will make sure that the price is dear for not paying them.

The right answer is to work this out before July 1, but if it isn’t, it is going to be one helluva mess.

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. 

Donations Welcome


Written by

Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Been wondering what happened to you, Art.

    • I’ve been down in Utah chasing trains. Last week was the 150th Anniversary of the completion of the Transcontinental Railroad and there was a big deal at Promontory Summit, UT and the Union Pacific made the inaugural run of the restored “Big Boy” 4-8-8-4, 4014, by most measures the largest, most powerful locomotive ever built. The 4014 and 4-8-4 644 were on display at the railroad museum in Ogden, UT. So, the wife and I took all that in.

      • Sounds like a fun trip. Good to have you back, Art.

  • It should have been shut down when they hit the 90 mark and No Budget…
    Creating a budget is literally the only thing our legislature is required to do during their yearly session…

    • There is a budget in place through June 30th.

  • If there is a “shutdown”, the blame lies entirely with the dims, trying to prevent any sane, reasonable action by Governor Dunleavy from happening. Public employees, you need to levy the blame exactly where it belongs. On the idiots you put in office. If there is a shutdown, every “politician” that voted/votes for “obstruction”, or refuses to perform their sworn duties to Alaskans, should lose their “public” income, right along with every public employee that will be screaming about “unfair”, “unneeded”, “willful discrimination” by the Governor and his administration. Put the shoe on the right (left) foot, public employees. You already know who that is.

  • I realize the column did not dwell on it, but the dynamics of the healthcare racket are a little different than basic union behavior or education. It you haven’t noticed, the demand for healthcare is absolutely INSATIABLE – there is not enough money in the world to fund all the “need” for healthcare, and that means Medicaid. Rational decisions about provide a basic level of support should be made but fairly quickly lawmakers should understand the fundamental nature of the demand. Absent that understanding, Medicaid will consume everyone and everything.

  • During a line item veto over ride can the legislature adjust the number to get to club45?

    • I don’t know what you mean by “club45.” All they can do with an over ride vote is vote up or down and it takes 27 and 14.

%d bloggers like this: