State Budget and Possible Gov't "Shutdown"

Dear ASEA Members,

I have received inquiries from members regarding a possible “shutdown” of State Government on July 1, 2017 if a FY2018 Budget hasn’t been passed by the Alaska Legislature and signed by Governor Walker. I am writing now as rumors are circulating and news articles are being written that a “shutdown” may occur and I know this causes a lot of uncertainty and concern for you as a State employee.

I do think it is very unlikely, almost impossible, for the Alaska Legislature to pass a budget and the Governor sign it prior to June 1 even though the Governor immediately called the Legislature into a special session after they adjourned from the extended regular session. The Governor did include HB 57 on his special session call, which contains the budgets passed by both the House and Senate during the regular session. This allows the Legislature to continue their Conference Committee deliberations on HB 57, the FY2018 operating budget, in an attempt to resolve the difference in the House and Senate budgets and bring a budget to the floor of both the House and Senate for a final vote. By including HB 57 in the call, the Governor avoided the necessity of the House and Senate again passing individual budgets and therefore shortened the amount of time necessary to pass a final budget.

However, the Conference Committee on the budget has not held a formal meeting since the Special Session convened. Also, neither the House nor Senate have had a formal floor session to consider any substantive legislation to address the FY2018 Budget. The House did schedule a ‘technical’ session for today but no business was conducted. According to their rules, they have to meet once every 3 days during any regular or special session. But a ‘technical’ session can be conducted with only 3 members present. The House and Senate have sessions scheduled for Tuesday, May 30 and could conduct business at those sessions. But for the House and Senate to consider HB 57, the operating budget, at the May 30 sessions, the Conference Committee would have had to meet, resolve the differences between the House and Senate budgets, and report it to the Rules Committee to be scheduled for a vote by the entire body. At this time, they have not scheduled a Conference Committee meeting prior to the House and Senate meeting in full session on May 30.

As a result of this inaction by the Legislature, I have been informed by the State Administration that you should expect to receive a letter on Tuesday, May 30 giving notice of layoff on July 1, 2017 if a FY2018 budget is not passed and signed prior to July 1. Article 12.04 of our Collective Bargaining Agreement (CBA) provides that the appointing authority shall make every effort to give written notice to the employee at least thirty (30) calendar days in advance of the effective date of the layoff. I am sure you recall that 2 years ago a budget was not passed by June 1 and the Governor did send notices of layoff to meet the requirements of the CBA. However, a budget was passed and signed prior to July 1 and a “shutdown” of government didn’t occur.

Even though pending layoff notices will be sent, I am highly confident that a budget will be passed and signed into law prior to July 1 which will avoid a “shutdown” of Government. It may take until late June for a compromise to be reached by the Legislature and a budget passed, but I believe that will occur prior to July 1. A “shutdown” of State government on July 1 would have a serious short term and long term negative impact on the economy of the State of Alaska. While some legislators may say that a “shutdown” won’t hurt, it is clear that a majority of them realize that they can’t let that occur--not only because of the negative impact on the State’s economy but also because of the “backlash” from their constituents.

Be assured that ASEA is actively involved in working with legislators and the Governor to urge all parties to avoid a “shutdown.” Our lobbyist, Fate Putman, is working full time on this issue. He and I talk several times a day regarding this issue and I will be joining him in Juneau at critical times during the coming weeks to encourage action by the Legislature. Other public employee unions and the Alaska AFL-CIO are also very active in this effort. It is also important to note that almost every special interest group, not just Unions, are urging the Legislature to take action to get a budget in place and avoid a “shutdown.” This includes the Alaska State Chamber of Commerce who represents the private sector business community. They understand the devastating effect a “shutdown” of Government will have on the economy of the State of Alaska.

We will also be asking for your help in this effort.  We are planning “member actions” to assist us in getting a strong and unified message to all legislators. We will also be sending legislative alert notices to all members at the appropriate times asking you to contact your legislators either by email, letter, or phone. Your voice and support during the coming weeks is very critical. By working together as Union members, I know we will be successful in successfully resolving this issue that is very critical to you as employees of the State.

Again, I know this can be very unsettling and wanted to be sure that you had the most recent update as soon as possible. I will keep you informed as the Alaska Legislature returns to work after Memorial Day.

Please feel free to contact me if you have any questions. I hope you have a good Memorial Day weekend.

Jim Duncan
Executive Director