Dunleavy scoffs, but senators ask right question on rules governing $1.25 billion in federal money
Senate President Cathy Giessel and Anchorage Sen. Natasha von Imhof sent a simple letter to U.S. Treasury Secretary Steven Mnuchin Thursday asking for clarification on whether Gov. Mike Dunleavy will be able to use the federal bailout money to replace nearly $200 million in funds he vetoed in the state budget, including school bond money.
They asked for details on what restrictions will be enforced on the $1.25 billion coming to Alaska in response to the COVID-19 crisis.
“Legitimate COVID-19 related funding concerns, subject to the provisions of the CARES Act, are expected. For example: Items that are directly COVID-19 related that were not considered in FY20 (either through the operating budget or its supplementals) are anticipated. But can the governor claim to veto items in the FY21 budget, even if the funding is not directly related to COVID-19 health crisis (like school bond debt reimbursement or covering operational costs for the Alaska Marine Highway System)?” the letter asks.
The senators asked the right question. And they are not the only ones. Last week, Sen. Lisa Murkowski said she had yet to hear from Mnchin about whether declines in local tax revenue could be replaced with the federal cash.
“This is something that is really important to get clearly defined,” Murkowski said. She said the law says that the money has to be on COVID-19-related expenses and it “cannot be used for things that were previously budgeted.”
“We were told that there would be a great deal of flexibility but not the firm confirmation that I was seeking,” she said.
In an interview with KTVA, Dunleavy complained about the letter from Giessel and von Imhof and said “it took us a team to try and understand what was actually being asked.”
He claimed it was difficult for the team to figure out what the senators wanted to know.
If it took a team to interpret the letter, it wasn’t the A team.
Any confusion in this letter is on Dunleavy’s part. The senators wanted to know if Dunleavy is correct in claiming he can spend the federal money on almost anything as long as he says it is connected to COVID-19. We still don’t know the answer to that question.
Dunleavy said White House officials promised him flexibility.
“I talked personally with the secretary of the treasury, I talked personally with Russ Vought, who’s the OMB director, personally. I spoke personally with Mark Meadows, who’s the new chief of staff, on this issue. All indications that I got from those individuals are is that they understand the states needs as much flexibility as possible to be able deal with the fallout from this virus. And so they’re going to make it work in that we are able to use the money in as flexible a manner as possible.”
Translated, it’s not certain whether school bond payments will be allowed, but stay flexible.
(Incidentally, Dunleavy is using state money to pay Vought’s wife, Mary, $4,000 a month to generate good publicity for him.)
Dunleavy told KTVA he did not ask the White House officials if he could veto funds for school bond repayment and use federal money as a substitute, but he thinks that is irrelevant.
“They have no idea what our veto process is, they could care less about that,” he said.
There will be federal rules on how the money is handled and officials charged with following the law may conclude the school bond vetoes have nothing to do with COVID-19, because they don’t.
If Murkowski believes there is uncertainty with the definition of flexibility, then Giessel and von Imhof are taking the right approach in asking about using about $200 million in federal money to substitute for funds approved by the Legislature.