Gavel (Courtesy photo)

Judge hears arguments in budget effective date suit

Superior Court Judge Herman Walker Jr. heard arguments in Anchorage

A state court judge said he planned to issue a ruling next week in a lawsuit filed by Alaska’s attorney general that raised questions about when the state budget takes effect.

Superior Court Judge Herman Walker Jr. announced his plans after hearing arguments Friday in Anchorage.

Attorney General Treg Taylor sued the Legislative Affairs Agency in late June, after the House failed to adopt effective date provisions for a state spending package. Gov. Mike Dunleavy said the budget was “constitutionally impaired if the goal was for it to take effect on July 1.”

A week after the lawsuit was filed, and three days before the new fiscal year started on July 1, the House passed the effective date provisions. Attorneys for the Legislative Affairs Agency, in court filings, say that action itself rendered the lawsuit moot.

But attorneys James Torgerson, Kevin Cuddy and Connor Smith also say the lawsuit “in substance” is “brought in the name of the state against the Legislature,” an action they say is barred by the state constitution.

Even if the judge found the lawsuit was not an action against the Legislature, the attorneys have argued the case still should be tossed because the Legislature makes appropriations decisions and the Legislative Council makes decisions about legislative business — not the Legislative Affairs Agency.

Attorneys for the state, Margaret Paton Walsh, William Milks and Jessie Alloway, in court filings, said the issues raised by Taylor’s lawsuit could come up again and that Walker should not dismiss the matter as moot.

“Indeed, all the elements that led to this litigation appear likely to persist in the near future, with the potential that this exact situation could repeat as soon as next year,” they wrote. “After all, there is not yet any solution to the State’s fiscal problems, and next year’s budget will be the product of negotiations between the same governor and legislature as this year.”

Taylor has argued that under the state constitution, laws don’t become effective until 90 days after enactment unless the Legislature with two-thirds support in each chamber provides for other effective dates. The Department of Law attorneys, in court filings, have said retroactive provisions in the budget did not provide a workaround.

During arguments Friday, the judge, Walker, asked about a letter Dunleavy sent to Joel Bolger, then chief justice of the Alaska Supreme Court, shortly before the lawsuit was filed.

In the letter, Dunleavy said given the “consequences flowing from the lack of an effective date” he had asked Taylor “to seek a determination of the issue” through the courts.

Walker, speaking of Taylor, asked Paton Walsh: “In essence, isn’t he following what his boss is telling him to do?”

In Alaska, attorneys general are appointed by the governor and confirmed by lawmakers. Paton Walsh said the attorney general has independent authority to bring actions in the public interest.

“The fact that the governor wanted him to do it doesn’t change the fact that he has that independent authority,” she said.

Attorneys for the state have highlighted an email from Jessica Geary, executive director of the Legislative Affairs Agency, dated June 18, in which she said it would “likely be the Legislature’s position that a functional budget was passed which allows authorized legislative personnel to continue employment on July 1.”

She cited past practice and the interpretation of legislative attorneys surrounding the retroactive provisions. She also noted the potential for things to change, and said a contingency plan would need to be implemented if disagreements were not worked out by July 1.

Agency attorneys, in court filings, said the email was reporting on a “‘likely’ position that might be taken by the Legislature — not the LAA — based on a hypothetical state of facts.

They also noted a June 23 email from Geary to legislative leaders seeking direction around planning for a possible government shutdown. A later vote by the Legislative Council authorized temporary use of existing funds for legislative operations until money in the budget bill became available, according to a court filing by agency attorneys.

Torgerson, in arguments Friday, referred to Geary as the “messenger.”

“This is just like if somebody in the clerk of court sent out an opinion from the Supreme Court that somebody didn’t like. They can’t sue the Supreme Court so they’re now saying, Oh, we’ll sue the clerk’s office,” he said.

Paton Walsh disputed that comparison.

She said in this case, there was an agency that “was proposing to spend money in violation of the law.”

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