The state House will hold a third and final vote on Monday, July 29 on legislation funding the state capital budget, which would enable the state to receive $1 billion in federal funding for highway and construction projects.

Meanwhile, the University of Alaska’s Board of Regents will hold an emergency meeting Tuesday, July 30, to review preliminary ideas for a major restructuring from university president Jim Johnsen. Representatives of Gov. Mike Dunleavy’s Office of Management and Budget will also be present to present the governor’s ideas for a two-year staged reduction of state funds for the UA that could be in lieu of a one-year 41 percent reduction resulting from Dunleavy’s veto of funds from the state budget.

In a memo sent to the university the governor’s office laid out a plan for cuts in both Fiscal 2020, the current year that began July 1 and Fiscal 2021, which will begin July 1, 2020. The memo outlines targeted reductions in university research, athletics and other programs this year, and next year in a consolidation of UA’s schools of engineering, business, arts and sciences.

The total for the two years is $132.8 million, about what Dunleavy originally ordered for the current year.

The governor’s plan raises a sticky legal issue, however, over who has authority to make reorganizations of the university, and to allocate funds in its budget. Under the state Constitution the Board of Regents has this responsibility.

The Legislature and governor give a lump-sum appropriation and the regents make the decisions on how it will be spent. In this case the regents could simply endorse Dunleavy’s plan, however.

Meanwhile, the vote on Senate Bill 2002 is scheduled to occur two days before a key July 31 deadline when Alaska could start losing federal funds to other states and comes after two prior votes fell short of achieving the needed three-quarter “supermajority.”

A vote earlier this week fell one vote shy of the needed support of 30 of the 40 members of the House. The five-member Mat-Su delegation to the state House will play a crucial role in this vote.

The Senate bill has far-reaching implications beyond the potential loss of federal highway funding, state House leaders said in a statement issued Friday.

“The bill also contains important “reverse sweep” language, which would reverse the governor’s action to zero out special funds with university scholarships for 12,000 students, increase rural energy rates by eliminating Power Cost Equalization, and take away grants from organizations that serve domestic violence victims and the homeless,” the statement said.

A law that repealed and replaced Senate Bill 91 with tough on crime provisions will also remain unfunded until the capital budget passes, among many other damaging consequences.

House Speaker Bryce Edgmon (I-Dillingham) on Thursday announced the planned vote to rescind previous action on S.B. 2002 in order to get the thirtieth vote. This motion is the final opportunity for the capital budget to pass the Legislature and to then be transmitted to the governor.

“Now is the time to act and prove that Alaska is truly open for business,” Edgmon said. “This capital budget provides our private sector the resources needed to build our state, gives an incentive to keep our most qualified students from pursuing opportunities outside, and equalizes power costs so individuals and small businesses can survive whether they operate in large urban centers or rural communities.” The Alaska House Republicans were joined by Rep. Chris Tuck (D-Anchorage) and Rep. Gabrielle LeDoux (R-Anchorage) in rejecting this piece of legislation.

Republican minority in the state House were not shy in their criticism, however. Late Friday they issued a statement:

“Even after negotiating through the week to try and find common ground with the Majority, we still find ourselves at an impasse on a number of issues,” said Rep. Cathy Tilton (R-Chugiak/Mat-Su), Republican Finance Leader.

“You can’t just label something as a compromise without consent of the other negotiating party. We certainly would not agree that violating the statute is, in any way, an acceptable compromise.”

“You’re either following the law or you are not. There is no middle ground on that point,” said Rep. Tammie Wilson (R-North Pole). “This wasn’t a compromise bill at all. This was the Majority realizing that the public would not accept a $929 dividend, as they originally planned to do, and trying to leverage the PFD to avoid budget reductions. I hope our colleagues in the other body will reconsider their position on this issue before we run out of time.”

“Alaskans are not asking for a welfare handout, as seen in HB 2003, but for their share of the resource wealth as defined in the statutory formula,” added Rep. Sarah Vance (R-Homer). “This bill is a slap in the face to every Alaskan and harms those who need it the most.”

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