Alaska Gov. Attaches Workers’ Comp Strings to Budget Appropriations

Lawmakers made sure Angoon got a taste of the oil-wealth bounty in this year’s capital budget by earmarking money for a search-and-rescue boat, a fire truck, a snow plow and renovations to the community hall.

But when the budget reached his desk, Gov. Frank Murkowski inserted a catch – the Admiralty Island community of 480 gets none of that money until the city has workers’ compensation insurance.

Attaching conditions to budget items instead of simply approving or vetoing them has the lawyers, lawmakers and lobbyists who orbit the Capitol asking: “Can he do that?”

Murkowski budget director Cheryl Frasca says yes. In Angoon’s case, the state has a responsibility to be accountable for how public money is spent, and it can’t put the state or communities at risk, she said.

“Not to have workers’ compensation insurance and to be operating these vehicles in emergencies, I think there’s reason to be concerned,” she said.

Murkowski attached strings to other capital budget items for rural communities that also lack workers’ compensation insurance or owe money to the state or federal government:

$30,000 for a school van for Hydaburg;

$40,000 for community center renovations in Marshall;

$150,000 for harbor planning and engineering in St. George;

$25,000 for maintenance and repairs in Alakanuk;

$250,000 for equipment purchase and repair in Emmonak;

Reappropriations to Alakanuk and Akhiok for repairs, maintenance and bulk fuel purchases.

Those rural communities will only receive their money if they “resolve outstanding financial liabilities to the state or federal government,” Murkowski wrote in his capital budget transmittal letter.

“It’s a carrot to help get their finances in order,” Frasca said. “In the private sector, if you don’t meet your obligations do you keep getting loans or grants?”

Kathie Wasserman of the Alaska Municipal League and a former mayor of the Southeast town of Pelican said many cash-starved communities don’t have the tax base to raise enough money to cover all governmental services. They don’t receive enough state assistance and raising local taxes would hurt private business or make it unaffordable to live in the communities, she said.

Instead of withholding budget items, the state should be working with the rural areas to help with their operating costs, Wasserman said. Angoon is a good example, she said.

“When you don’t have insurance, everything else sort of caves in,” she said. “Here’s a community that can’t afford workers’ compensation, and now their emergency equipment is being held back.”

Some Democratic lawmakers are questioning Murkowski’s action. State Sen. Kim Elton, D-Juneau, assigned staffer Jesse Kiehl to the issue after talking with some of his colleagues.

“Sen. Elton has some concerns about the governor’s proposal to impose conditions on grants made by the Legislature that he signed into law,” Kiehl said.

Frasca said the appropriations will be administered through the Department of Commerce, Community and Economic Development, which has the authority to attach conditions to grants.

Pam Finley, an attorney for the Legislative Legal Services Division, said she thought Alaska law was less clear on Murkowski’s conditional approvals. The law allows the governor to withhold money if given the specific authority to do so, but that authority is pretty narrow, she said.

It’s one thing if Murkowski is just giving advance notice of a common practice in administering grants. But it becomes a cloudy issue considering the items are budget appropriations approved by the Legislature, Finley said.

The governor can veto a bill or he can veto line items in a budget, but the Legislature then has the opportunity to override that veto. If the governor withholds money without a veto, the Legislature does not have the ability to override that action.

“I don’t see anything that makes it clear that they can add these conditions,” Finley said.

Topics Legislation Workers' Compensation Alaska