By Tim Bradner

Legislators and Gov. Mike Dunleavy are chucking rocks at one another over the location of a special session called for July 8 to set the 2019 Permanent Fund Dividend.

This is likely to turn into high farce, with the governor and most Republicans in the state House showing up in Wasilla, Dunleavy’s choice for a location, and legislative majority leaders showing up at the state capitol in Juneau — their choice.

The stage is set for dueling special sessions. Dunleavy and Republican House members want the session held at Wasilla Middle School, ostensibly because the session would be closer to ‘the people.’

Legislators say the reason is so a mob of sign-waving, “Don’t touch by PFD” types will show up to try to intimidate lawmakers.

Meanwhile, indications are that Dunleavy will make budget vetoes by the end of this week, June 28. Legally, the governor must do the vetoes by July 6 for HB 39, the operating budget, but Dunleavy is reported to be doing them as soon as possible.

On the location of the session, House Speaker Bryce Edgmon and Senate President Cathy Giessel — and most legislators — want the session officially convened in Juneau because the state capitol has superior facilities for streaming and security.

Legislators say these facilities will put the proceedings closer to the people than from the middle school in Wasilla.

The spat has resulted in an interesting legal dispute. The state Constitution is silent on where a special session called either by the governor or the Legislature will be held.

Dunleavy cites a state law that says the governor can pick the site when he or she calls the special session, likewise the Legislature when it calls the session.

However, the Legislature is not legally bound to follow statutes, though it is the state constitution. In theory, the Legislature could ignore the governor’s choice and convene where it wants to.

One complication is that Republicans in the House foiled an attempt for legislators to call their own session. The motion fell one vote short of the two-thirds majority needed.

Had the legislators’ session been officially called, lawmakers could clearly select the site. For now a legislatively-called session is not an option, being one vote short.

Unless that changes legislators will convene July 8 at the governor’s bidding but it’s not clear where. House and Senate leaders may defy Dunleavy and go to Juneau, ignoring the statute.

If this happens there may be little the governor can do, although there will be a lot of theatre.

Meanwhile, some lawmakers may go to Wasilla, making it difficult to get a quorum to officially convene in Juneau, if that is what happens.

On the vetoes, the big guessing game is what, and how much, the governor will veto. He has “line-item” veto power, which mean be can delete, or reduce, any specific appropriation. He cannot add spending, however. Only the legislature can do that.

Expectations are that at least half of the state-municipal school debt support will be cut, or essentially what was approved in the House version of HB 39.

The Senate fully-funded school debt support in its version of HB 39 and the budget conference committee adopted the senate version on this item. In his original budget, Dunleavy had cut all state school debt support.

Any cut to state and local school bond support will have to be made up by the municipalities, which are legally obligated to pay the bonds. For the short term, at least, some local governments will able to tap reserves and cut expenses, but beyond this year there would have to be local tax increases.

John Moosey, the Matanuska-Susitna Borough’s manager, said his borough can ride out a veto of all state support for school bonds for one year without tax increases.

“We have reserves and we have cut some capital and operating expenses,” sufficient for the borough to absorb the full cut, which would amount to $19 million for Mat-Su, Moosey said.

However, there would have to be property tax increases in the following year, he said.

Two other likely vetoes, according to the street talk, is K-12 funding for FY 2021 that was ‘forward-funded’ by the legislature this year. Forward funding — or appropriating a year in advance to give school districts time to plan — has been the practice in recent years.

An institution that may be especially vulnerable to the governor’s red pen is the University of Alaska. Dunleavy had made a massive reduction to the university but the legislature rejected most of his proposals.

Dunleavy had cited only the Permanent Fund Dividend in his call of a special session. Under the state constitution, only the legislature can add to it.

In their joint-statement, Edgmon and Giessel said, “Funding the 2019 Permanent Fund dividend is critical to Alaskans. However, the long-term issues about the sustainability and future of the Permanent Fund must also be addressed. Unfortunately, the Governor’s special session proclamation restricts discussion solely to the amount of this year’s PFD,” Edgmon and Giessel said in a joint statement issued Monday.

“Importantly, the Governor’s proclamation also fails to include the Fiscal Year 2020 capital budget,” the House and Senate leaders said.

If the capital budget is not finalized in July, Alaska’s private sector could be affected by potential loss of federal highway and aviation project money because the required state matching dollars were not provided.

The matching funds are in the capital budget, Senate Bill 19.

Edgmon and Giessel said they intend to hold floor sessions in Juneau and hold most committee hearings in the Anchorage Legislative Information Office.

This course would save money and provide access to Alaskans on the road system, “while also using facilities designed for legislative proceedings and providing Alaskans who are unable to attend in person the ability to participate and follow along as lawmakers consider these crucial issues,” Giessel and Edgmon said.

House Republicans don’t think much of that plan. “The fact that legislative leadership plans to run away from the Mat-Su Valley back to their hiding places in Juneau is extremely illuminating,” said Rep. Lance Pruitt (R-Anchorage), House Minority Leader.

“The legislative leadership has already tried to have these conversations on the budget, PFD, and education in the dark back rooms of far-away Alaska; they haven’t found answers. Now, we should be having these conversations in full view of the public,” Pruitt said.

Meanwhile, an analysis from the Legislative Affairs Agency, the Legislature’s nonpartisan professional support group, said a 30-day special session in Wasilla proposed by Dunleavy would cost $1.3 million.

If legislators convened in Wasilla, but then simply adjourned, which some propose, the cost would be $240,000, according to the analysis, which was published by the Associated Press.

An alternative to the session being held in Juneau but with House and Senate Finance committee meetings in Anchorage, would cost $855,000. The full cost of a special session in Juneau would cost $1.1 million, according to the analysis.

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