Gov. Mike Dunleavy speaks about his plan for a fiscally sustainable budget at the first event of his budget roadshow at the Cannery Lodge Monday, March 25, 2019 in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

Gov. Mike Dunleavy speaks about his plan for a fiscally sustainable budget at the first event of his budget roadshow at the Cannery Lodge Monday, March 25, 2019 in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

House committee hears public testimony on Dunleavy’s constitutional amendments

A legal memo casts doubts on whether or not Dunleavy constitutional amendment is really a revision

The House State Affairs Committee met Tuesday to listen to public testimony on Gov. Mike Dunleavy’s proposed constitutional amendments.

During the hearing, government officials presented information on House Joint Resolutions 5, 6 and 7, discussed the resolutions in detail with lawmakers and then the floor was opened to the public for comment.

Issues brought up during the meeting included whether or not some of the amendments should be considered constitutional revisions, and the impact the resolutions could have on promoting or inhibiting democracy.

Dunleavy said in a January press release that the resolutions serve as a foundation for his permanent fiscal plan.

HJR 5 is an amendment “prohibiting the establishment of, or increase to, a state tax without the approval of the voters of the state,” according to the bill’s title. The resolution also requires voter-led initiatives — which are formed and approved by the people without including government — to create new taxes to be approved by Legislature. Barnhill said with HJR 5, any new or increased tax would need the approval by both the Legislature and the people.

HJR 6 is an amendment requiring a “portion of the Alaska Permanent Fund income to be used, without an appropriation, solely for the purpose of paying permanent fund dividends to state residents,” according to a document from the state of Alaska Department of Law. The resolution also requires the vote of the people for any changes to the permanent fund dividend formula.

HJR 7 is an amendment to the state spending cap and an appropriation limit. “Appropriations made in a fiscal year would not be able to exceed the average of the appropriations made in the previous three fiscal years by more than 50 percent of cumulative change in population and inflation,” according to the amendment.

During the committee meeting, Ed King, the chief economist of the Office of Management and Budget, presented the current spending limit. Adopted in 1982, the limit was set at $2.5 billion, plus inflation and population growth. The FY20 calculation would be about $10.5 billion, according to King’s presentation.

Mike Barnhill, policy director in the state’s Office of Management and Budget, said HJR 5 and HJR 6 are both examples of “direct democracy.”

“These form Gov. Dunleavy’s core legislative agenda for this session,” Barnhill said at the committee hearing. “It’s something he feels very strongly about. He really wants the people to have an opportunity to consider each of these amendments to the constitution so we can achieve fiscal sustainability in the state.”

Rep. Gabrielle LeDoux, R-Anchorage, questioned the portion of HJR 5 relating to initiatives.

“It’s just the converse of democracy in that it says any law enacted by the voters through initiative has to then be approved by the Legislature,” LeDoux said during the committee hearing. “So, it’s not exactly direct democracy is it?”

Barnhill said the resolutions, which are based on a taxpayer bill of rights model from Colorado, uses direct democracy already existing in the state’s constitution.

The changes to the constitution proposed in HJR 5 appear to be a revision requiring a constitutional convention under the state’s constitution, which would not allow HJR 5 to be advanced by the Legislature through a resolution, Emily Nauman, the deputy director of the Legislative Affairs Agency’s Division of Legal and Research Services, wrote in a memo to Rep. Zack Fields, D-Anchorage, who co-chairs the House State Affairs Committee.

“The amendment prevents the Legislature from imposing a new tax or increasing taxes without voter approval,” the memo said. “The result will be a fundamental shift in the constitutional authority of the Legislature to tax … the changes seem to substantially alter the substance and integrity of the state constitution as a document of independent force and effect.”

Assistant Attorney General William Milks from the state Department of Law, who introduced the amendments with Barnhill, said he thinks the amendments are appropriate and don’t meet the qualifications for a constitutional revision.

“It’s an appropriate amendment because already in our Alaska constitution — essentially baked in — is this notion that either the people or the Legislature can enact laws,” Milks said. “That’s right in our Alaska constitution and we also have processes by which the people or the Legislature can take action to essentially veto or override that action.”

Several of the committee members questioned HJR 5, including Rep. Adam Wool, D-Fairbanks, who said the amendment could be burdensome to voters.

“It’s kind of like if I ask my kids’ class if they want ice cream every day for lunch,” Wool said. “They’re probably going to say yes. Do they really need ice cream every day for lunch? Probably not. I’m not trying to be disrespectful to the public as a whole, but if you get a room full of people and ask ‘hey do you want to pay more gas at the pump?’ They’re going to say no. But do you want your roads fixed, etc.?”

Wool said it’s important for voters to ask the second part of that question.

“Like, if I ask my kids ‘hey do you all want to have diabetes?’ They’re going to say no. But the ice cream might dominate their mind — same with the tax.”

Barnhill said, either way, the government should be consulting with the people on these issues.

Before taking public testimony on the resolutions, Fields said he could not support the amendments.

“I think pretty clearly, they represent a backdoor attempt to defund core services,” Fields said. “Which is wildly unpopular in the state of Alaska. Evidence around the country shows that when we do these in other states it leads to dramatic declines in education, higher education and other core services’ funding. If those are decisions we’re going to make we should make them in a straightforward manner and not use a backdoor effort to do it.”

The committee took public testimony from across the state, including the Kenai Peninsula.

Adam Hykes, who testified from Homer during the public comment section, said he supported the first portion of HJR 5. He said he opposed the portion that changes the initiative process.

“If the people ever spoke up and decided they want a law passed, I really don’t like the idea that the Legislature could stonewall — through action or inaction — the will of the people,” Hykes said. “It is you who serves us, not we who serves you, with all due respect.”

Hykes said he was in favor of HJR 6 and HJR 7.

“That is what the people of Alaska decided when they elected Gov. Dunleavy,” Hykes said. “(The PFD) needs to be constitutionally protected.”

Also from Homer, Larry Stone spoke in opposition of HJR 5 and HJR 6.

“I think it would defund core services,” Slone said. “The core services I’m referring to is our basic infrastructure and public safety. Basically, if we can’t tax the citizens, ultimately we’re going to be slitting our own throats.”

Justin Parrish, a resident of Juneau, testified at the hearing saying HJR 5 was not a direct democracy.

“While sold as direct democracy it’s an unprecedented attack on the initiative process, which is direct democracy,” Parrish said. “If you’ve got the majority of the public saying we want to do this, we should listen.”

Laura Bonner, a former construction worker in Anchorage, testified against all three amendments.

“You have access to more information than the voters do — for analysis on what the state needs to provide roads, fund education and provide public services,” Bonner said. “The initiative piece of HJR 5 is troubling.”

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