Gov. Mike Dunleavy addressed the public at Wasilla Middle School Friday morning regarding the second special session slated to start July 8 at WMS.

Indications are that Gov. Mike 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 them as soon as possible.

Meanwhile, legislative leaders decided Monday to convene the second special session in Juneau rather than Wasilla, which the governor had proposed. Committee meetings would be held in Anchorage at the Legislative Information Office.

However, House Republicans denied the House and Senate leaders with votes needed to make the action official, which for now leaves Duneavy’s Wasilla plan on the table.

On 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 the 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.

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 vulnerable is the University of Alaska. The governor had made a massive reduction to the university but the Legislature rejected most of this.

On the upcoming second special session, House Speaker Bryce Edgmon, I-Dillingham, and Senate President Cathy Giessel, R-Anchorage, said the majority of the Legislature would like to call itself into a special session so as to include the state capital budget, which is unfunded.

Dunleavy had cited only the Permanent Fund Dividend in his call of a special session. Under the state constitution the Legislature selects the location of a session, not the governor.

However, as yet there are not enough votes for the Legislature to convene itself.

“Although we are one vote short of the forty-vote threshold to call ourselves into our own special session agenda, the majority of legislators in both bodies considers it our right to determine the location and venue best equipped to conduct business on the Governor’s special session call, while providing the most access to as many Alaskans possible,” Giessel and Edgmon 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,” Giessel and Edgmon said.

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

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

“For the reasons outlined, we believe the Legislature should call itself into session. We intend to hold floor sessions in Juneau, the seat of government established in the Alaska Constitution, 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.

“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.

“This is a slap to the face of every Alaskan who lives on the road belt, and especially those in the Mat-Su Valley who have prepared their lives and businesses to accommodate the legislature,” said Rep. Colleen Sullivan-Leonard (R-Wasilla). “Escaping to Juneau to deny a vast majority of Alaskans the opportunity to engage in the process in-person is unacceptable.”

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, of 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.

Late Monday, the governor’s office released a statement regarding the home of the July special section.

“Our focus has been on bringing the people and legislature together on the PFD. But instead of convening in Wasilla, legislative leadership is attempting to retreat back to Juneau. This move to negate the special session in Wasilla has no legal basis. A governor is clearly empowered to call a special session in a location of their choosing (AS 24.05.100),” said Governor Dunleavy. “The Senate President and Speaker of the House admit they lack the votes to change the venue or call a special session of their own, yet they are committed to thwarting the law and the voice of the Alaskan people. This is all part of why Alaskans have lost trust in their lawmakers. How can we with a straight face expect people to follow the law when the legislative leadership ignores, breaks, and skirts the law at every turn?”

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