ANCHORAGE, Alaska (Alaska Beacon) – Governor Mike Dunleavy has exercised his veto power on Senate Bill 183, a measure aimed at enhancing the transparency of Alaska’s tax-audit operations. The governor cited legal issues as his main concern regarding the bill’s provisions.
Senate Bill 183 mandated that the executive branch deliver audit reports to the Legislature in a specified format as requested by lawmakers. This legislative initiative arose from frustrations voiced by legislators about the Alaska Department of Revenue’s lack of cooperation in providing essential reports clarifying the operations of revenue auditors involved in disputes regarding oil and gas taxes.
“Before Gov. Dunleavy, they have cooperated. It’s just crazy, and the issue matters because there could be billions of dollars in potential oil and gas tax revenue that we aren’t getting, that we should be getting,” stated Sen. Elvi Gray-Jackson, D-Anchorage and chair of the Legislative Budget and Audit Committee.
Sen. Bill Wielechowski, D-Anchorage, who chairs the influential Senate Rules Committee that sponsored SB 183, voiced strong concerns regarding the veto. “The real question is, what is he hiding?” Wielechowski questioned, expressing a belief that the governor’s actions are preventing transparency. He emphasized: “Why is he going to such lengths to hide information from the people of Alaska? That is the real question that needs to be answered here and I hope that we’re able to get to the bottom of this, because this is potentially hundreds of millions of dollars that we have lost.”
Echoing these sentiments, Gray-Jackson remarked, “Accountability suffers when we, the Legislature — and by extension, the public that we represent — cannot see clearly how state revenues are tracked and how they’re assessed or collected. Come on now, Governor.”
The leadership from both the House and Senate regarded SB 183 as critical. They penned a letter to the governor, urging him not to veto the measure. “This letter accompanies the bill not as a routine legislative communication, but as a reflection of the extraordinary nature of the circumstances we face,” the letter expressed. It further stated that ongoing obstructions by the Department of Revenue (DOR) should not set a precedent for future administrations, highlighting the importance of oversight and accountability within Alaska’s government.
Having passed in the Legislature with a notable vote of 59-10-1, the possibility remains for lawmakers to attempt an override of the governor’s veto. Overriding the veto will require a joint session of the House and Senate, necessitating at least 40 votes.
Lawmakers are also preparing for an upcoming vote to override Governor Dunleavy’s veto of millions of dollars in education funding, which is not expected until the legislature convenes for its regular session in January. Wielechowski confirmed that SB 183 will also be on the agenda for an override vote.
The governor’s office has remained mostly silent regarding the veto, only issuing a formal letter outlining his reasoning to the Legislature. In this communication, he argued that SB 183 would create an expansive and potentially unconstitutional delegation of legislative authority to the Legislature’s audit committee and auditor. The governor referenced a precedent from the Alaska Supreme Court, which has determined that granting broad discretionary mandates without adequate guidance constitutes an unconstitutional delegation of legislative power.
Wielechowski, however, expressed confusion over the governor’s legal arguments, noting that SB 183 was drafted with input from legislative attorneys familiar with Alaska Supreme Court case law. “I have not had any indication that they thought there were any constitutional issues with it,” he stated regarding the bill’s drafting.
Gray-Jackson defended the Legislature’s authority, stating, “The (Alaska) Constitution and the state statutes give the Legislature authority to audit executive branch agencies so that we can ensure that public funds are properly managed. The auditor relies on these agencies in order to get the information that she needs.”
In the aftermath of the veto, Gray-Jackson hinted at the possibility of legal action concerning access to audit records that prompted SB 183 but refrained from elaborating until discussions with the Legislature’s attorneys could take place.
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