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 the new fiscal year this budget is supposed to cover begins July 1. Below is my rough sense of what is happening in Alaska policy unmaking.
Overview of Sticking Points
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 - mainly the Alaska Permanent Fund and the Constitutional Budget Reserve (CBR). But the legislature needs a 3/4 majority to get into the CBR. Democrats were needed to get to the CBR and they wouldn't go along with the budget unless the Majority approved Medicaid expansion, union contracts whose raises the legislature had previously approved, and a version of Erin's Law to teach kids how to protect themselves from sexual abuse.
5. The 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.
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 and 15 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 a few things the Democrats wanted (no Erin's Law, no Medicaid) along with 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.
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. I would suspect given the already mentioned bruised egos, having the governor meddle with the legislature by hiring a mediator would add even more capsaicin to an already fiery 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, 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 still been meek in their demands (maybe requests is a more accurate term) but the Senate seems galled that they have to acknowledge their existence at all.