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How the impending U.S. government shutdown might impact Alaska

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How the impending U.S. government shutdown might impact Alaska


As Congress barrels toward a government shutdown starting Sunday, a lapse in federal funding is poised to pause pay for thousands of federal workers in Alaska, while many government services could be hobbled.

If a shutdown happens, how long it will last and exactly how it will play out in Alaska is unclear.

Some federal agencies in Alaska, including those operating under the sprawling Interior Department, had not released specific plans as of Thursday.

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But with just two days until government funding runs out, a fix appears less and less likely to arrive.

How will a shutdown affect Alaska’s federal employees?

Federally paid workers have a huge presence in Alaska, with its vast land ownership, 200-plus federally recognized tribes, and several military bases.

Alaska is home to 16,000 federal employees, state data shows. There are also 20,000 active-duty service members counted separately. Together, those workers represent a large portion of workers in the state

Many of those workers aren’t expected to be paid during a shutdown, though a 2019 law passed by Congress ensures they receive back pay when it’s over. Also, Alaska Republican Sen. Dan Sullivan is leading a bill to pay military personnel during the shutdown, but it was blocked Wednesday.

Oct. 13 will be the first day many federal workers miss paychecks, should the shutdown extend to that point.

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Furloughed federal workers can sign up for unemployment compensation through the state, but they’re required to repay that money when they receive back pay, according to the Alaska Department of Labor and Workforce Development.

[Federal government starts notifying employees a shutdown may be imminent]

Federal employees who must continue working during the shutdown are not eligible for unemployment compensation, even if they’re not paid while working, since they’re not unemployed, the agency says.

A statement from Gov. Mike Dunleavy’s office said that 4,700 state executive branch positions are at least partially federally funded, but will see no disruption in pay and will report to work. The federal government will determine the status of federal employees who work in state of Alaska departments, the statement said.

What services will continue?

Despite the shutdown, several federal programs like Social Security, Medicare and veterans benefits should continue as usual.

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Medicare is funded permanently, so benefits will not be affected by a shutdown. Medicaid would also operate for the time being since the program is funded for the next three months.

The Centers for Medicare and Medicaid Services could experience some administrative disruptions. According to the agency’s contingency plan, more than half of its staff will be furloughed, which could cause processing lags.

Like Medicare, Social Security is not subject to annual appropriations, so in the event of a shutdown the Social Security Administration would continue to send checks.

Veterans benefits like pensions and health care would also continue, and most of the Department of Veterans Affairs will keep working through a shutdown.

For food assistance, the Supplemental Nutrition Assistance Program will maintain operations through October, according to Shirley Sakaye with the Alaska Department of Health.

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“If the shutdown goes beyond October, the feds have stated they will provide guidance to states,” Sakaye said by email.

Benefits for the Women, Infants and Children program “will be funded through December” using unspent funds, she said.

The U.S. Postal Service will still deliver mail uninterrupted during a shutdown, and all post offices will remain open. USPS is not funded through tax dollars, so it won’t be impacted by a shutdown.

[How a government shutdown would affect Medicare and Medicaid benefits]

Alaskans will be able to apply for passports from the U.S. Passport Agency, but with the agency facing furloughs and an already extensive backlog, securing a passport could take longer than usual.

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The National Weather Service will continue operating its regular schedule, keeping up forecasts, warnings and observations, spokeswoman Maureen O’Leary said in an email. Also, critical functions such as radar repair will continue, she said.

But routine equipment maintenance, upgrades to forecast models and other longer-term improvements to service delivery will be delayed, she said.

As far as state services go, the statement on Tuesday from the governor’s office said Alaska is prepared to continue state-administered federally funded programs for 34 days — the length of the most recent shutdown that ended in 2019.

If a shutdown lasts longer than that, the state “will reevaluate the situation if necessary, and prioritize programs that most directly impact the life, health, and safety of Alaskans,” the governor’s office said.

Active-duty military operations, including search and rescue, will also continue through a shutdown even as service members miss paychecks.

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What services might be paused?

A shutdown will likely lead to wide-ranging impacts, both big and small. Applications for social service programs could be stalled, permitting efforts could be put on hold, small-business loans could be delayed, and many federal contractors aren’t paid.

The White House this week said a shutdown will leave disaster relief programs underfunded, delaying 14 long-term recovery projects in Alaska, and many more in the U.S. The White House did not say which projects in Alaska would be affected. The Federal Emergency Management Agency did not respond to an email seeking comment.

[FEMA delays $2.8 billion in disaster aid to keep from running out of money]

The White House also said travel could be delayed during a shutdown as air traffic controllers and Transportation Security Administration agents work without pay, including about 730 such workers in Alaska.

Transportation Secretary Pete Buttigieg has also raised concerns that air traffic controllers in training will be furloughed, hamstringing the department’s efforts to fill a controller shortage.

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During the 2019 partial shutdown that lasted five weeks, 10% of TSA agents nationally, who were not getting paid, called in sick, exacerbating delays.

Public meetings scheduled in Alaska while the government is shut down would also likely be canceled until it ends, federal officials say.

That includes two public meetings on the Biden administration’s environmental review of the oil and gas lease program in the Arctic National Wildlife Refuge. The first is set for Fairbanks on Monday.

Other federal meetings that could be canceled next week include subsistence regional advisory council meetings in Kenai and Arctic Village to discuss hunting and trapping regulations.

In Alaska, past shutdowns have also delayed permitting for commercial fishing boats, hobbled planning and preparation for wilderness firefighting efforts in Alaska, and led to closures or limited services at national parks, including those in Alaska.

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What is Alaska’s congressional delegation doing?

The Alaska congressional delegation has said Congress should try to avoid a shutdown, though at this point, averting or blunting a lapse in appropriations appears unlikely.

Sen. Sullivan introduced the “Pay Our Military Act” to ensure members of the military will receive paychecks during a shutdown. His fellow Alaska Republican, Sen. Lisa Murkowski, and 14 other GOP senators have signed on.

Sullivan attempted to fast-track the bill on the Senate floor Wednesday.

“It’s pretty simple, in the event of a shutdown — and right now we are all working hard to make sure we avoid it — we need to make sure that the men and women who protect us get paid. That’s it,” Sullivan said on the Senate floor.

Sullivan made a similar attempt last week to pass a bipartisan bill treating Coast Guard pay like the rest of the military in the case of the shutdown. Due to the Coast Guard’s funding mechanism, during the shutdown ending in 2019, Coast Guard members were not paid alongside the rest of the military.

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Both Sullivan-led bills have hit roadblocks from Democratic leadership.

Alaska Democratic Rep. Mary Peltola signed onto similar Coast Guard legislation in the House.

This week, the Senate also began work on a 45-day short-term funding measure. Murkowski and Sullivan have supported two procedural Senate votes this week to advance a spending plan.

But if the Senate bill passed in its current form, it’s likely dead on arrival in the House. House Republican leadership has floundered while trying to pass their own short-term spending legislation to avoid a shutdown.

Peltola is in Alaska taking time to grieve the loss of her late husband, Eugene “Buzzy” Peltola Jr., who died in a plane crash earlier this month.

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Peltola spokesman Sam Erickson said Peltola is receiving updates from the House floor and she will be prepared to return to D.C. if her vote is necessary to avert a shutdown.

What are the potential economic impacts for Alaska?

Neal Fried, a recently retired state economist, said the federal workforce in Alaska is large and well-compensated.

Delayed payment of their wages won’t damage the economy if the shutdown lasts a short period, as they typically have in the past, he said.

“But if it drags on for months, it will obviously be felt in the economy,” he said.

Federal civilian employees averaged about $90,000 in pay last year, compared to about $65,000 for the average Alaskan, he said.

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Jonathan King, an economist who owns Halcyon Consulting in Anchorage, said a prolonged shutdown will be stressful for people who don’t collect paychecks.

He said a shutdown could temporarily lead to less spending in the economy, but it shouldn’t cause long-term economic impacts in part because workers will receive back pay.

“The bigger economic effects are the lost productivity,” he said. “Environmental impact statements won’t get reviewed. Permits won’t get issued. So that’s sort of the hidden effect, the work that doesn’t get done in those periods.”

Non-essential federal employees reached for this article said that if a shutdown begins on Sunday, they expected to receive an email Monday explaining that they would not be permitted to work during the shutdown.

Daily News reporter Annie Berman contributed to this report.

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Alaska

Alaska Native artists represent their culture through Fairbanks art sale

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Alaska Native artists represent their culture through Fairbanks art sale


FAIRBANKS, Alaska (KTUU/KTVF) – Fairbanks non-profit organization Denakkanaaga hosted its monthly art sale at the Morris Thompson Cultural and Visitors Center.

Denakkanaaga represents Alaska Native Elders in Interior Alaska. Many have a passion for art and were able to display their work at the event.

One artist said the goal is to represent the culture and heritage. Native artist Audrey Fields inherited it from her mother.

“Any craft fair, we were buddies, and we would go to each one,” Fields said. “We talk about our heritage, where we’re from … and we are very proud to learn many new things from other sewers.”

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For many of the artists, their artwork is passed down through family members. Native artist Selina Alexander says her mother taught her sewing when she was seven. Since then, Alexander has used her skills to give her peace of mind.

“If you’re troubled or upset or anything, when you work with your hands, it calms your mind down,” Alexander said. “For me, that’s what art is”.

Alexander said she wants to keep their culture alive through their art sales.

See a spelling or grammar error? Report it to web@ktuu.com

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Alaska high school students plan to walk out of classes Friday to protest for more school funding

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Alaska high school students plan to walk out of classes Friday to protest for more school funding


Protest

An Instagram notice indicates that high school students across Alaska plan to walk out of classes on Friday, demanding more funding for schools with a higher base student allocation.

The walkout is planned for fourth period, around 1 pm, and media has been alerted, so the walkout photos and footage will be splashed across the websites of mainstream media in an effort to pressure lawmakers in Juneau.

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The timing for the walkout coincides with the movement of House Bill 69, a school funding bill that would increase the per-student state funding, known as the BSA, by $1,000, costing the state about $250 million more per year. The Alaska Senate plans to consider the bill on the floor of the Senate on Friday, and the governor has already said he will veto it, if it passes.



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Whether a ‘pickle’ or a ‘crisis,’ the Alaska House is struggling with a deficit budget

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Whether a ‘pickle’ or a ‘crisis,’ the Alaska House is struggling with a deficit budget


The Alaska Legislature’s quest to pass a viable state budget before the end of the legislative session in mid-May isn’t getting any easier.

“Ladies and gentlemen, we’re all in a pickle,” House Speaker Bryce Edgmon, I-Dillingham, told reporters on Tuesday.

At this point in a normal year, Edgmon said, House lawmakers would be on the verge of passing their version of the state’s operating budget, marking the lower chamber’s preferred level of spending on state agencies, public schools and the Permanent Fund dividend. Last year’s budget passed the House on April 11.

But this is not a normal year. Low oil prices are fueling large deficits, meaning tough budget decisions are ahead. With a razor-thin 21-19 majority for the chamber’s Democrat-heavy bipartisan coalition, House lawmakers are struggling to come to an agreement that meets their constitutional obligation to pass a balanced budget.

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Nowhere is that struggle clearer than in the state operating budget, which House Finance Committee members voted out of committee last week. The $13.5 billion appropriations bill contains $2.5 billion for dividends, enough for a roughly $3,800 PFD, in line with Gov. Mike Dunleavy’s budget proposal and a formula in state law that has not been used since the mid-2010s. The budget also includes a so-called “unallocated cut” of nearly $80 million, an unusual step that would give the governor the freedom to make substantial cuts on his own. Legislative attorneys warn the step could be unconstitutional.

Altogether, it adds up to a $1.9 billion deficit. And that’s before accounting for recent volatility in the markets for crude oil, equities and bonds, which further threatens the state’s financial stability.

“It is a crisis. We cannot pay an unsustainable dividend,” said Chuck Kopp, R-Anchorage, the House majority leader.

The state has approximately $2.8 billion in its main rainy-day fund, the Constitutional Budget Reserve.

Large dividend figure is largely a mirage — but a persistent one

Members of both the coalition majority and Republican minority have called the $3,800 figure unrealistic in a year when roughly status quo spending would leave a $677 million deficit between the current fiscal year ending in June and the next year beginning in July. That figure, spotlighted by Senate budgeters, includes a roughly $1,400 dividend and a long-term extension of this year’s $175 million boost to education funding.

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But House lawmakers have so far failed to come to an agreement on a more realistic dividend.

Majority lawmakers, including members of House leadership, have called repeatedly for reducing the PFD to $1,000 in an effort to balance the budget while boosting funding for public schools. But so far, they haven’t mustered the votes to pass, or even advance, a budget that reflects that stated preference.

During the marathon budget-writing process, two majority-aligned members of the House Finance Committee — Rep. Neal Foster, D-Nome, and Rep. Nellie Unangiq Jimmie, D-Toksook Bay — voted with all of the House Finance Committee’s minority Republicans to reject a proposal that would have reduced the PFD to $1,000.

Foster and Jimmie were not available for interviews Wednesday afternoon, but Foster has in the past said PFD reductions amount to a tax that falls disproportionately on the poorest Alaskans.

The House’s chief budgeter, House Finance Committee Co-Chair Andy Josephson, D-Anchorage, said he’s sympathetic, but the dire fiscal picture is forcing lawmakers’ hands.

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“We don’t yet live in a world where the Alaska people, writ large — although we heard different messages in Anchorage — are ready for themselves to invest in their state government, so here we are,” he said. “I’m not saying that people who want the PFD in its entirety aren’t speaking to a set of values. We just have a significant math problem.”

House leaders turn to minority and governor for help

With members of his own caucus apparently unconvinced, Edgmon on Tuesday pleaded with his Republican counterparts for help.

“We need the help of the minority caucus. We also need the help of the governor to come forward and to put all these pieces together,” Edgmon said.

Reducing the PFD would only go so far when it comes to balancing the budget, though. Even with a $1,000 PFD, the nonpartisan Legislative Finance Division estimates a $169 million deficit for the next fiscal year — if a House-passed $1,000-per-student funding boost, a key campaign issue for the Democrat-dominated majority, is included.

“That’s just not possible,” said Rep. DeLena Johnson, R-Palmer and the senior Republican on the Finance Committee, said.

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House minority Republicans say they’d like to see some additions to the governor’s budget rolled back, though those would not close the gap. Johnson said she anticipated cuts to both the PFD and the House’s $275 million education bill that’s now in the hands of the Senate.

“We’re looking at really having to cut things back, and [that’s] probably going to include having to discuss both of those two very, very, very difficult things,” Johnson said.

‘Maybe we can get to yes’ on Senate tax bills

Even reducing the education funding boost to a status quo level, $175 million, same as schools got this fiscal year in one-time funding, would not close the remaining gap.

Funding for Alaska’s schools remains a question mark. Here’s where things stand

Another option for balancing the budget is raising state revenue. Members of the bipartisan Senate majority have suggested expansions of corporate income taxes and reductions to oil and gas tax credits.

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“I hope they pass,” said Senate President Gary Stevens, R-Kodiak. “I’d like to see us have reasonable education funding and a reasonable dividend, and not have to slash everything, as we would if we don’t have those revenues.”

Stevens also suggested that the Legislature may not have a choice when it comes to determining the appropriate school funding level.

“I suspect that the legislature may pass a $1,000 [school funding increase],” he said. “I have no doubts, from having spoken to the governor, that he will veto that.”

Stevens said he expected efforts to overcome a veto with a two-thirds majority vote would be “dead on arrival.”

Josephson, the Finance Committee co-chair, suggested the House may agree to Senate-proposed reforms that would capture corporate income taxes for large S corporations in the oil and gas industry — namely, BP successor Hilcorp, which is not subject to typical state corporate income taxes — and companies that do business in the state via the internet.

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“Maybe we can get to yes,” Josephson said.

But the House majority’s one-vote margin may make that difficult. Kopp, the majority leader, said he opposes the Senate’s revenue measures.

“Not this year,” he said last month.

Stevens, though, reiterated Wednesday that he continues to oppose spending from savings for the coming year’s budget, despite recently acknowledging a withdrawal will likely be necessary to close the budget gap in what remains of the current fiscal year.

If the House fails to pass a budget, the Senate could push forward with its own budget bill, cramming the Legislature’s typically separate operating, capital and supplemental spending bills into a single budget document colloquially referred to as a “turducken.”

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Despite the political headwinds and mounting time pressure, Edgmon says he remains optimistic lawmakers will settle on a budget before the constitutional end of the legislative session on May 21. Edgmon estimated that the House would have to pass a budget next week to remain on track.

“We still have time,” he said. “We don’t have a lot of time.”

Correction: An earlier version of this story misspelled Toksook Bay.



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