Alaska faces potential government shutdown over budget issues

Published: Jun. 17, 2021 at 4:47 PM AKDT
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FAIRBANKS, Alaska (KTVF) - On Thursday, June 17, state employees across Alaska were sent pink slips in preparation for a potential government shutdown.

This situation is a result of budget challenges playing out in the Alaska Legislature.

The body has approved a budget for Fiscal Year 2022.

In votes which took place on June 15 and 16, the House and Senate passed the highly contested budget by razor-thin margins of a single vote.

Democratic senator Scott Kawasaki and Republican Representative Mike Prax both voted against the final budget.

According to Kawasaki, the document has a lot of problems. “It uses a lot of federal money that is one-time money only, it didn’t have the Permanent Fund Dividend in it, so that was a real problem for me. I think we need a Permanent Fund Dividend in the budget, and again I think a lot of legislators felt the same way just looking at the results.”

Meanwhile, Prax said, “It is not, in fact, a balanced budget. So it, in my opinion, does not conform to the requirement as established by the constitution, a balanced budget.”

Despite the budget’s passage, challenges remain for the state.

Two key votes failed to garner enough support, with the current special session set to end at midnight on Friday.

The first vote concerns funding for various programs in the state, including the Power Cost Equalization program and university scholarships.

The second changes the budget’s effective date.

Like all bills, the budget is set to take effect 90 days after passage. However, the new fiscal year begins on July 1st.

If two thirds of both chambers don’t vote in favor of moving the budget’s effective date to the start of the fiscal year, Alaska’s government will shut down for the first time in its history.

In response to the situation, Governor Mike Dunleavy held a press conference Thursday to talk about the potential need for another special session.

State employees are by law required to be given two weeks notice if they are to be laid off.

Dunleavy said, “By law, layoff notices have to be sent out by 4 p.m. today, and they’ve been sent out, telling folks that the potential for layoff is real. If the legislature fails to come to an agreement on some of these issues, and a functional budget is not sent to me, again, actual layoffs will need to occur and a number of programs cease to function. If the legislature fails to act by Friday evening, we’re prepared to call them back, because we need a budget to run a government, and I think people understand that.”

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