Why no capital budget yet? Failure of Democrat-led Majority, or Republican Minority? - Must Read Alaska
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Sunday, December 15, 2019
HomePoliticsWhy no capital budget yet? Failure of Democrat-led Majority, or Republican Minority?

Why no capital budget yet? Failure of Democrat-led Majority, or Republican Minority?

WHAT REP. SPOHNHOLZ SAID

Rep. Ivy Spohnholz would have you believe that the 2020 capital budget failed because House Republican minority members voted against it. And because of that, drug addicts are going untreated. Here’s her take:

Spohnholz tells a partial truth: House Republican Minority members said no to breaking into the Constitutional Budget Reserve for a capital budget they had no time to discuss.

The House Majority needed those votes, but had treated Republican Minority members so poorly over the winter, they could not muster support to bust into the CBR, which has just $1.77 billion.

But for Spohnholz, it’s all about addiction treatment, specifically $10 million in matching grants for the construction of new addiction treatment centers statewide.

In the end, politics is about human interaction, and successful politicians, such as President Ronald Reagan, achieved their goals by treating others well.

The failure of the House Majority to produce a capital budget could be, in part, because of how Spohnholz and her majority members behaved over these many months. They took 30 days to organize their majority, peeling off Republicans to join them. Republicans such as Rep. Tammie Wilson, of North Pole, who negotiated a seat for herself at the table in the majority led by Democrat Bryce Edgmon, who agreed to reregister as an Undeclared, giving Republicans cover as they came over.

WHAT REP. WILSON SAID

Rep. Tammie Wilson of North Pole, who co-chairs House Finance, was in charge of getting the capital budget over the finish line. She is on the record saying she joined the Majority to help Gov. Michael Dunleavy advance his goals.

Gov. Dunleavy presented a fully funded capital budget in mid-February. But Wilson sat on it until Day 147. That’s 121 days of regular session and 26 days of the 30-day special session that was called to get the capital budget done, as well as legislation to fund the Permanent Fund dividend.

Then, with just three days before the end of the first Special Session, Wilson introduced it into the Finance Committee with some striking changes that none of the members had ever seen. She never consulted with Senate Finance about her changes — they were as surprised as anyone.

What Wilson did was in the weeds for most Alaskans, but those political insiders were scratching their heads: Was Wilson trying to kill the capital budget? Was this a poison pill?

Wilson funded the fiscal note on the criminal justice reform package with Power Cost Equalization Fund monies, which were supposed to be spent to help lower the cost of power in rural Alaska. Her capital budget uses that money to reopen the Palmer Correctional Center.

Wilson funded a large portion of the capital budget with the Constitutional Budget Reserve Fund, which requires a three-quarters vote — a vote that she was not able to coax out of a Republican minority caucus that she had deeply offended, bullied, and berated over the months since she had joined the Democrat-led majority.

Was Wilson doing what she said she would do, which was to help the governor with his agenda? The jury is still out, but the Republican Minority seems to think not.

The Wilson version of the capital budget was sprung on House Finance, rushed through with little discussion allowed, and hit the House Floor at lightning speed.

It passed with the votes of the Democrat-led Majority, but the funding mechanism — the Constitutional Budget Reserve, did not pass. House Republicans were not in the mood to help Wilson with the earmarks she had slid into the capital budget in place of projects the governor had requested for Senate District E — the Mat-Su.

And so, there they ended, and gaveled out without a capital budget.

WHAT SPEAKER EDGMON SAID

According to Speaker Edgmon, the Republicans are hamstringing the private sector at the height of the construction season. But budget experts know that the capital budget, in the main, is not for this summer, but next summer — it is needed this summer only to secure the billions in federal matching money for projects in the pipeline. Is Edgmon lying or does he just not know?

The governor can add this undone task of the capital budget to the next special session, once the Legislature funds the Permanent Fund dividend. That session convenes July 8 in Wasilla.

The capital budget doesn’t really get to be a problem until the end of July. Those who say otherwise are looking for a political angle.

THE BLAME-SHIFTING

The capital budget has, in fact, been passed by the House and Senate. What hasn’t been passed is a mechanism to fund it. And yet, it has been transmitted to the governor for his signature. He will have to veto it, because he cannot add money back to a bill. What happened is the House put forth a spending plan that it could not fund.

Who bears the blame for this “no capital budget”? Spohnholz, Edgmon, and Wilson say it is 15 Republicans.

The governor did his work. The Senate did its work. The House Democrat-led Majority? Rep. Tammie Wilson? Do they bear responsibility? Add your thoughts in the comment section.

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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

  • Rep. “Poison” Ivy is about the worst of those on the Left. Twenty years ago, the minority Democrats in the House would withhold their votes to access the budget reserve to require large INCREASES to the budget. They demonstrated that the mechanics of accessing a reserve account to balance the budget in lean revenue time was a ticket for MORE spending. If the Left wanted to put all conservatives in re-education camps, Rep. Poison Ivy would be happy to introduce the bill and/or send in the goons.

    • Isn’t this exactly what the House minority called for recently-allow for the take from budget reserve in exchange for a full PFD??
      No matter how it’s sliced, it requires “INCREASES to the budget.” It’s only a problem when the minority is made up of Democrats?

  • Suzanne, the answer is contained in your essay,….”Tammie Wilson negotiated a seat as Co-Chair on the Finance Committee FOR HERSELF.” It gets down to pure selfishness of the individual. Advancing Dunleavy’s budget is NOT, and NEVER was, part of Wilson’s intent. Wilson was power hungry, and after being in the House Minority for so long, broke away to help herself. My Fairbanks friends inform me that Wilson will be speaking this Friday at the Denny’s Restaurant at noon, and they plan to put her on the hot seat.

  • I’ll be there. I’m in her District. Representative Wilson believes she is the Einstein of the legislature and all other 59 members, plus the governor, are mere idiots. It’s her mentality. Only she knows the way, and therefore she’s a genius. It’s her psychological make-up. Wonder who will be supporting her on the next go around?

    • LOL!!!! Genius? Der’s a wholelotta genius under those clothes. LOL.

    • No me. Tammie has one less vote.

    • Carl Up North… Make that two of us.

      • Three.

  • Wilson helping Governor Dunleavy? That’s a joke. He despises her.

  • A pox on both houses!
    Spending more of the CBR is wrong, wrong, wrong.
    A $3000 Dividend is wrong, wrong, wrong.
    Depositing $10 billion into the corpus is also ridiculous while we continue to raid the CBR and other savings accounts and consider borrowing money to pay off the oil tax credits while we ignore the constitutional requirement to repay the $10 billion already “borrowed” from the CBR.

  • No PFD check for you, Chris. Dunleavy marked your name off of the “good boy” list.

    • I think its the other way around. Ironically, Mike may agree with me and veto the appropriation from the PFER to the PF corpus. How will he pay ginormous Dividends when the PFER is depleted?
      If I had more time and energy I would sue the legislature for violating the constitutional requirement to repay the CBR instead of locking it away so that there is no money available to repay it.

      • No standing, Chris.

  • I object to using CBR money to fund the PFD, when the PF has 18 billion. I also object to stuffing 12 of that 18 billion into the corpus – that opens the PF to have tons of money in it, but being useless, because I can’t see a majority of Alaskans voting to let our legislature get their hands on it. If our budget gets in a real crunch, the PF will be untouchable.
    When that happens, our legislature will try to blackmail us – “No dividend at all, unless you vote to let us into the PF.” Or whatever other leverage they would think of.

  • Spohnhotz, Wilson, Edgmon and others, remind me of a quote by Mark Twain” “Politicians and diapers must be changed often, and for the same reason”. I wonder, were politics the same in Twain’s era? Same old game. If they can’t or won’t tell the truth, “baffle the people with bullshi_t.” How fitting. The entire game of “politics” here is nothing but a BS baffling episode.

  • Ben,
    This sort of political spectacle has been taking center stage since the government made Socrates “drink the hemlock” for challenging their “authority” on the land….
    Before sentenced to death, Socrates stated:
    “that the men whose reputation for wisdom stood highest were nearly the most lacking in it, while others who were looked down on as common people were much more intelligent” (Plato, Apology, 22).

  • Poison IVY has no idea how to be a Representative for District 16. She has her own agenda. Ivy, you’re supposed to be a rep for your constituents and support their wants & wishes, not your own!! What a typical Democrat, how do you good Alaskans vote for her? My shoe would do a better job supporting District 16 than she does! I have a great idea poison-ivy, why don’t you house some of your SB91 rejects, let them stay at your house. No? Please move to California with the rest of your kind!

  • Once you get poison Ivy on your skin, it keeps rubbing you the wrong way. Cure: cut the bush!!!

  • DON’T LOSE YOUR TEMPER, USE YOUR TEMPER
    BY Jim Crawford
    June 22, 2019
    The Legislative leadership appointed a special committee they call “a Bicameral Working Group to provide context and solutions to the ongoing debate over the Permanent Fund dividend”. I renamed it the Special Legislative Committee To Justify Cheating Alaskans of Their PFD. Let’s look at the committee to determine if it’s going to give Alaskans a fair shake or provide more window dressing to cover the theft assigned by House Speaker Bryce Edgmon and Senate President Cathy Giessel. Each member of the House and Senate have already voted for or against the full dividend that Alaskans by statute are due.

    This Committee is made up of four House members. Jennifer Johnston, R –Anchorage, is the House Chair. She voted against paying the full dividend. Adam Wool, D – Fairbanks, voted against paying the full dividend. Jonathan Kreiss-Thompson, D – Sitka, voted against the full dividend. Finally, the Freshman Kelly Merrick R – Eagle River voted for the full dividend. That’s three of four staunchly opposed to paying your full PF dividend.

    The Committee is also made up of four Senate Members. Click Bishop, R – Fairbanks, is the Senate Chair and voted against the full dividend. Bert Stedman, R – Sitka, voted against the full dividend. Shelley Hughes, R – Palmer voted for the full dividend. Donny Olson, D – Golovin, voted against the full dividend. So, out of eight members appointed by PFD public enemy #1, Speaker Edgmon and #2, President Giessel, six of eight are committed to stealing your dividend and blaming the reason on you.

    Have you ever seen a group of more tone deaf Legislators? This existing crop of Senate and House leadership define themselves daily: inept, procrastinators, devious and deleterious. We’re now going into the second Special Session and they haven’t even done the budget yet. Using their Legislative majority positions and fueled by retroactive per diem cash, they stopped your full dividend dead in each chamber. The public though is paying attention and is ready to throw the bums out. I don’t do well with those who promise one thing during the campaign and backtrack as soon as they get elected. Or they try to change the subject by redefining the issue. The latest PFD gambit is to say the full dividend is not sustainable. I was a member of the Investment Advisory Committee which came up with the dividend plan. We made the dividend sustainable under a simple formulae: Five years’ Fund earnings, averaged and divided by the number of Alaskan recipients. Pretty simple.
    Maybe one of the mental giants who claim the PFD is unsustainable could explain their math. If the current statute is followed, the dividend is sustainable for a hundred years. You do the math for them. Your PF savings earns money. You inflation proof the principal and split the earnings balance 50% for dividends and 50% for expenses. Stick with the formulae and don’t succumb to the temptation to outspend your means. Presto, you created a sustainable dividend.
    For the last five years, the Fund earned an average of 8.91% each year. We just passed $19 billion in earnings reserve. In FY 2018, we made statutory net income of $6.3 billion. Alaskans did our job and insisted on payment of the 25% royalty oil. We monitored the Fund’s performance to assure good earnings. But the Legislature failed to do its job, managing the state budget. The Governor knows that in addition to the Fund, state agencies have another $4.3 billion in just three agencies. Legislators refuse to introduce legislation to consolidate state government. Instead, they want to short your dividend. Justice should be swift to remove those folks from office.

    Alaska’s private sector sinks in recession, agencies hoard their cash, towns enjoy their local permanent funds and spending just continues to rise while results languish. Departments defy the Governor’s cost cuts and consolidations to save money and are protected by Legislators from both parties that continue the spending spree. Legislators bet that the folks back home will suffer in silence while their dividend is cut for another year.
    In 1999, Alaskans were given the opportunity to vote for or against the formulae that has now worked for thirty five years. The vote was 83% for the formulae Governor Hammond wanted and 17% against. If a corporation doesn’t allow its shareholders to vote on the dividend, the Board of Directors is removed at the next Annual Meeting. If your Legislator refuses to allow you to vote on your PF dividend, the same fate should await them.

    Jennifer Johnston, Chair of the Special Legislative Committee To Justify Cheating Alaskans of Their PFD wants to “take away the emotions” from their decision to steal your dividend. Senator Ted Stevens, my mentor, was famous for his ferocious temper. I shared my concern for his reelection one time as Coordinator of his Alaska offices. He smiled and said, “Jim, I don’t ever lose my temper, I use my temper”. Time for Alaskans to follow his example with an action plan to save our Alaska Permanent Fund.
    Jim Crawford is a third generation Alaskan entrepreneur who resides in Anchorage with his bride of 35 years, Terri. He is the former President of Permanent Fund Defenders LLC. The Alaska Institute for Growth is a local think tank Jim runs which studies and reports on and may sponsor projects of sustained economic growth for the Alaskan economy.

  • Jim, how do you treat 60 people with varying degrees of mental illness?
    .
    Answer: put them all together in lockdown and reopen the doors one week later. Darwin’s Theory will stand the test of time. Winners get to return to Juneau. Losers, who survived, go to API.

  • Love it.

    Jim

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