Governor Walker has hired a mediator to try to get the two houses of the Alaska legislature to resolve their differences and pass a budget.
The governor has already had to send out layoff notices to state employees and if the budget isn't resolved by, well this budget is supposed to cover the new fiscal year, that begins July 1. Below is my rough sense of what is happening in Alaska policy unmaking.
How We Got Here
1. Last year the legislature passed a $2 billion a year tax break for oil companies which includes big tax credits - to the tune of $700 million this year. The Republican majorities in the House and Senate tell us this is contractual and can't be changed. Though they have no problem breaking other contracts such as labor agreements.
2. The price of oil plummeted, sharply cutting the state's basic revenue source.
3. The budget passed by the legislature had a $3 billion gap between expenditures and revenue.
4. The state has a lot of money in different funds - such as the Alaska Permanent Fund with $54 bilion at the moment and the Constitutional Budget Reserve (CBR) with $10 billion.
But the legislature needs the Democrats for the 3/4 majority key into the CBR. Democrats wouldn't go along with the budget unless the Majority approved Medicaid expansion, funding for union raises the legislature had previously approved, and a version of Erin's Law to teach kids how to protect themselves from sexual abuse. Restoring education cuts was also in the mix.
5. The house majority talked about moving money around in the Permanent Fund which on technical grounds would let them tap the CBR with a simple majority. This move only needed a majority, but six of their own, sensing political suicide (even talking about messing with the Permanent Fund Dividend Checks everyone gets has been taboo) and severe limitations on future budget options, refused to go along. So they sent the governor a budget that was going to run out of money after a few months.
6. The governor refused to sign a budget that was $3 billion in the red and sent it back to the legislature, set up a special session in Juneau (the state capital), and told them to fund union contracts, pass Medicaid expansion, Erin's Law, and a balanced budget. (The governor is a former Republican who ran as an Independent because he didn't think he could get through a Republican primary. During the campaign, he teamed up with the Democratic gubernatorial candidate who became his Lt. Gov running mate. A major National Guard scandal for the sitting Republican governor helped Walker become governor.)
7. The Republican majorities in the House and Senate threw a hissy fit and refused to meet in Juneau. They held ten minute meetings - long enough to open and adjourn - and then called their own special session in the newly, and luxuriously, refurbished Legislative Information Office in Anchorage.
8. The House majority and minority caucuses finally came up with a compromise budget - which got the Democrats a few things they wanted (no Erin's Law, no Medicaid) in exchange for a promise to vote for access to the CBR, but only IF the senate went along.
9. The Senate rejected the House compromise and sent back their own new budget.
10. This budget was rejected by both the Democrats and the Republicans unanimously in the House.
What Happens Now?
So that gets us to now. The governor announced that he'd hired a man who mediates business disputes. The governor is an attorney who is used to working through business deals with mediators if nothing else works.
This seems to me like a logical and reasonable approach. The governor says the legislature is squabbling over 1% of the budget and seemingly is willing to risk shutting down the government over what he thinks are really tiny differences. I would guess that while the financial differences are small, the ego differences are still pretty big.
My main question when I heard about the mediation offer was about separation of powers. Is it the governor's job to help the legislature get their work done? Well he certainly has a strong interest in them getting a balanced budget passed. I would suspect, though, given the already mentioned bruised egos, having the governor meddle with the legislature by hiring them a mediator would add even more capsaicin to an already fiery and overcooked stew.
But it is the kind of thing an adult would do. I think of something I heard during the Alaska political corruption trials in 2007 -2008. I believe it was someone working with the prosecution who observed that the businessmen (there were no women indicted) all quickly came to settlement agreements while the politicians were the ones who tended to go to trial. The businessmen, he hypothesized, knew how to assess their situation and cut their losses while the politicians protested to the end that they didn't do anything wrong.
The governor tends to take more of a business approach than the Republican politicians in power in Juneau (well, in Anchorage at the moment), despite their non-stop pro-business rhetoric. And lest I be accused of picking on the Republicans, let me say in my defense, that they are, and pretty much have been for some time, the folks who call the shots in Juneau. The Democrats are relegated to scraps that fall from the Republican table. They haven't had any power over anything until their votes were needed for the CBR. The Democrats, from my perspective, have been meek in their demands (maybe requests is a more accurate term) but the Senate still seems galled that they have to acknowledge their existence at all.
An earlier version appeared at What Do I Know?