The end of the legislative session must be afoot, or at least this phase of it.
Most committee meetings were cancelled Friday and the few that were scheduled were delayed and often cancelled anyway. Legislative leaders closeted themselves behind closed doors, attempting to negotiate agreements on the budget and key bills.
It’s hoped that enough work can be accomplished, particularly on the budget, so Gov. Mike Dunleavy has the tools he needs to fight the COVID-19 pandemic and the sharp economic decline that has come with it. The Legislature plans to recess until summer or fall, hopefully when the virus spread is under control.
But political games are a part of the end of any session, even one ending temporarily during an emergency.
On Thursday House Republicans withheld their votes for a needed three-quarters “super majority,” or 30 votes in of the 40-member House, needed to tap the Constitutional Budget Reserve, or CBR, for supplemental appropriations to pay for COVID-19 response among other things.
The result is that only $246 million of the $359 million supplemental is approved to augment the state health and social services budget, which was underfunded last year. The supplemental appropriations would also cover state expenses in fighting last summer’s wildfires, and other unexpected expenses.
If the CBR action isn’t reversed, which it may be, the governor will have to decide how to spend the money he has available, choosing between the virus outbreak or restoring state Medicaid funding shorted last year.
If the Medicaid money isn’t fully approved the money currently available to pay health care providers will run out before the start of the next fiscal year on July 1. That would mean payments to some providers will be curtailed at a time the state’s health care system will be under growing stress from the virus.
However, this is an old game. Withholding votes from the needed three-quarters majority is a common tactic used by a legislative minority to leverage the majority, usually on budget matters. This year Republicans are in the House minority and the majority is led by a coalition led by Democrats and Republicans, although House Speaker Bryce Edgmon, of Dillingham, is an independent.
In the past Democrats have been in the minority, and Republicans in the controlling majority and Democrats have used their clout on a CBR draw to gain leverage.
However, it isn’t yet clear what the House Republicans want in this year’s bargaining, or at least they haven’t said in public statements. The timing on this is also awkward, with the governor and legislature racing to deal with the virus outbreak and its economic fallout.
Senate President Cathy Giessel, R-Anchorage, and Senate Finance cochair Bert Stedman, R-Sitka, said the three-quarter vote leveraging is irresponsible this year given the public health and economic crisis. The senators said that in comments to reporters last week.
Meanwhile, in what may – or may not – be the last days before a recess, the Legislature is moving quickly on giving the governor tools to augment a huge package of federal economic funds headed for Alaska as well as other states.
One initiative underway is a state program for business loans guaranteed by the state that is now being taking shape in the Legislarture. Gov. Mike Dunleavy wants the Alaska Industrial Development and Export Authority to take the lead in this, the governor said in a press conference this week. Additional state economic stabilization efforts are to be announced Monday, March 30. However, one bill being worked on now is Senate Bill 242, in the Senate Finance Committee, which would among other things allow the state to order private lending institutions to waive payments on loans, for autos and home mortgages, for examples, and to delay foreclosures and evictions. While it’s clear the state can do this with state agency financing through agencies like Alaska Housing Finance Corp., extending this into the private sector is a legal gray area, the state Department of Law told the Senate committee Friday.
State attorneys told the senators that this might be made to fly under the existing Alaska Disaster Act, which provides for confiscation of private property in an emergency, but which must be compensated. It was suggested that the Senate committee draft language allowing claims of financial damage to be filed against the state by private lenders for actions that interrupt payments or other commercial transactions.
Legally, it seems more clear that a freeze on payments, repossessions or penalties could apply to loans from state entities, such as bulk fuel loans to communities by the Alaska Energy Authority and possibly industrial or commercial financing by AIDEA. As this is written the bill is still in the Senate committee.
However, authorization for a small business grant program was tacked onto another bill, Senate Bill 241, when it passed the House Thursday. The bill basically extends the governor’s declaration of an emergency into the fall, ensuring continued services during the COVID-19 outbreak.
Among other things SB 241 provides $10 million from the state disaster relief fund to help with response efforts and gives the state medical director, Dr. Anne Zink, authority to issue standing orders for health care providers engaged in efforts to combat the virus. It also gives the state authority to recognize licenses issued in other states ro trained nurses or other licensed medical professionals who are in Alaska, such as military spouses, to augment the state’s health care workforce.
A last-minute provision added through a floor amendment by Rep. Zack Fields, D-Anch., would allow the Dept. of Commerce and Economic Development to establish a grant program for small businesses to prevent bankruptcy or layoffs.
The grants, intended mainly for very small businesses, would be administered by the nonprofit regional development organizations, or ARDORs, set up in different parts of the state. The Senate must still agree to this change in SB 241, however.
Meanwhile, there is a wave of federal money headed for Alaska in the $2 trillion-plus economic relief package just approved by Congress and signed by the President. Senior Trump administration officials said they hoped SBA-backed business loans could be available by the end of next week, but it may take longer. There is also hope that the $1,200 checks to federal taxpayers ($2,400 for joint filers) depending on income, would be deposited or in the mail in two to three weeks.
The state Legislature is also considering two $1,000 Permanent Fund Dividends, one paid in June and the second later in the year, but lawmakers have yet to agree on that as this is being written.
The Senate Finance Committee was also briefed Thursday by its staff on major provisions of the pending federal legislation. Among other things there is authorization for block grants to states with a minimum of $1.25 billion, which would be what Alaska receives as a state with a small population.
From what can be determined now this appears to be a payment to the state General Fund intended mainly to help state programs aimed at fighting the COVID 19 virus, but it may have broader uses.
Senators asked on Thursday to get that clarified as soon as possible. There is also a nationwide grant of $8 billion to tribal entities, to programs administered by tribes, and Alaska should get a good portion of this.
There are also the “wage replacement” sections of the federal bill including the $600-per-week supplement to Unemployment Insurance Compensation recipients and a separate $600 per week for self-employed workers who are not otherwise eligible for UIC. The federal bill has provisions for small business loans on generous terms made more generous if employers agree to retain workers. How this would relate to a pending state business loan program done through AIDEA is uncertain.
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