Day 8: 'The devil's in the details'

Dunleavy turns a page, but we're waiting to see if it's really a new story.

Good morning, Alaska! It’s Day 8 of the legislative session.

Here’s the big takeaways from the day in Alaska politics: Gov. Mike Dunleavy gave his fifth state of the state address, which was received as better than all the ones he’s given so far. With a joke or two and a smattering of broadly popular policy proposals like expanded post-partum care for children and mothers, legislators gave a tentative thumbs up to the address but, like always, warned that it’ll really come down to just what kind of policies and action he backs up his words with. Also, he ended with a pretty dischordant “pro-life” message that seemed like an attempt to pivot away from abortion to generally “pro-family” policies like education, worker development and economic opportunities, but it just seemed off in a world where abortion rights are very much under attack. Meanwhile, we got a pretty good look at the state’s savings and rural legislators are none too pleased to see how the Power Cost Equalization fund is faring under new, more aggressive investment strategies. Plus, the schedule.

Current mood: 🤔

‘The devil’s in the details’

Gov. Mike Dunleavy delivered his fifth State of the State address on Monday night, seeking to paint a considerably more moderate and affable governor as he sets out on his second term. With several attempts at humor that we haven’t seen before, the Republican hit many of the conservative talking points about crime waves and environmental extermists, but weaved in enough broadly popular talking points that the entire chamber was clapping at the applause lines more often than not.

“I think there’s been a real sea change in the governor,” said Senate President Gary Stevens, R-Kodiak, during the Senate Majority’s response following the speech. “In my estimation, the governor is more comfortable with being governor.”

It turns out people like you when you do things that people like.

As for concrete proposals in the speech, there weren’t many. Dunleavy called for higher sentencing minimums for drug dealers (noting that fentanyl isn’t like “your grandparents’ marijuana”); continued spending to fight the federal government; food security; and a proposal to extend postpartum Medicaid coverage for children and mothers from 60 days to 12 months. On the economic development front, he called for an ad blitz to sell the benefits of the state to the Lower 48.

Education didn’t get much of a mention other than to recognize the narrow passage of the Alaska Reads Act in 2022, which Senate President Stevens noted as a missed opportunity. Dunleavy’s speech followed a rally on the Capitol steps in favor of increased K-12 eudcation funding, a priority for the Senate that doesn’t seem to have much enthusiastic buy-in from either Dunleavy or the Republican House.

Perhaps the oddest moment of the night was when Dunleavy proclaimed that he wanted to make Alaska “the most pro-life state in the country.”

“You see, like many of you, I happen to like people and, more importantly, we need more people in Alaska, not less. We need more people in our jobs, we need more people in our schools, we need more people who create wealth, we need more people solving Alaska’s problems and the world’s problems, we need more families achieving the American dream,” he said. “I know this may sound strange to some but we have to make it OK again to have families, put a family together and have children.”

It wasn’t an overt anti-abortion message that called for the constitutional amendment to rewrite Alaska’s right to privacy, but instead seemed like a try-out for rebranding the pro-life movement to tie-in to more broadly popular issues that make places livable like good schools and job opportunities.

In the Senate Majority’s response, Senate Majority Leader Cathy Giessel noted that she would still expect the governor to push forward with a constitutional amendment to outlaw abortion based on his reiteration of the “pro-life” message, but she and other legislators noted it faces an uphill battle requiring 2/3rds of each chamber.

“I personally would not,” Giessel added.

Why it matters: In all, though, it’s hard to overlook the backdrop of everything. The governor’s last four years haven’t exactly met whatever definition this new pro-life movement seems to have. Alsaka’s food stamp program has faced a massive backlog that’s left families without access to the help that’s sitting right there for months, which just last week generated a lawsuit saying they exposed thousands to hunger risk. That’s on top of cuts to education, the university system, several social safety net programs, and many, many other things that legislators hoped would make the state more livable.

Perhaps the governor has turned a page and all the things he’s steadfastly opposed over the last four years are back on the table, but as Sen. Bill Wielechowski said during the majority response:

“The devil’s in the details.”

Stay tuned.

Follow a kinda snarky thread: Gov. Dunleavy’s State of the State address.

Today’s schedule

• The House Community and Regional Affairs Committee hears HB22, a pension program for police and firefighters.

• The House Energy Committee meets at 10:15 a.m. for an overview and introductions.

• Senate Finance has a 1 p.m. meeting on Senate Bill 40, the operating budget.

• Senate Community and Regional Affairs has a 1:30 p.m. overview with the Division of Community and Regional Affairs.

• Senate Transportation meets at 1:30 for “discussion on committee direction.”

• Senate Health and Social Services meets at 3:30 p.m. for a Department of Health overview.

• Senate State Affairs has a 3:30 hearing on the 2022 elections with Alaskans for Better Elections (the pro-RCV group) and the Sightline Institute.

• Legislative Budget and Audit meets at 5 p.m. for an overview.

New investment model for PCE comes with bigger losses

A change in how the Power Cost Equalization fund is invested isn’t sitting too well with Sens. Lyman Hoffman (D-Bethel) and Donny Olson (D-Golovin), who raised concerns about the investment strategy during a Senate Finance Committee overview on the state’s savings and other investment accounts on Monday.

The first year under the more aggressive investment strategy saw the fund lose about 15% of its value, which Treasury Director Pamela Leary said is largely a result of a weaker economy and that it’s expected to smooth out in the long-term. Still, Sen. Hoffman wasn’t particularly thrilled about seeing nearly $200 million of the fund evaporate in the year. The entire arrangement was designed to remove the PCE program from the annual budget fight, and Hoffman said he doesn’t want to throw such an important program into political jeopardy.

“I for one don’t want the state of Alaska funding the law we have for power cost equalization for rural Alaska to come out of the general fund,” he said.

In a back-and-forth with Leary about the handling of the PCE fund, Hoffman said the program and the people who rely upon it are too important to risk for whatever upside there might be in the markets.

“I don’t want to risk the health and welfare of rural Alaska on putting them in the high-risk category,” he said. “That gives me great concern, and I’d have to discuss this with other rural lawmakers because we’re the ones that are affected. I’m sure it does not affect you or any of your family, but it affects thousands of people in rural Alaska.”

Both he and Olson expressed interest in pushing for a more conservative and stable investment model for the PCE fund moving forward, a point that Department of Revenue Commissioner-designee Adam Crum said they would accept if it’s the will of the Legislature.

Follow the thread: Senate Finance gets an overview on the state’s savings.