Alaska House subcommittee hears Department of Law civil division FY26 budget and litigation outlook

Deputy Attorney General Corey Mills told the House Department of Law Finance Subcommittee on Feb. 7 that the civil division's FY26 budget proposal seeks to continue recent investments in litigation capacity and service expansions while relying on a mix of unrestricted general fund, designated receipts and reimbursable services agreements.

Mills said the division brought about $19,000,000 into the state treasury in the last fiscal year and flagged several large, ongoing federal cases, including the Jeremiah M. class action against the Office of Children's Services and the Department of Family and Community Services, with trial set for May 2025 in U.S. District Court before Judge Gleeson.

The presentation outlined why the division is pressing to maintain litigation funding, how recent appropriations have been spent, and several operational changes: hiring two tribal liaisons, expanding the consumer-protection unit, transferring labor-relations staff from the Department of Administration, and a temporary $500,000 increment the division asks the Legislature to continue.

Mills began by summarizing the civil division's work and funding sources. "Our focus is on high quality legal services," he said, noting the division handles almost everything in state government except criminal law, including litigation, agency advice, legislative drafting and regulatory review. He said the division continues to see a notable increase in reimbursable services agreements (RSAs) from other state agencies; roughly half of the most recent increase in the division's non-general-fund category is due to RSAs, with the remainder attributable to salary and compensation changes and recent program expansions.

On revenues and recoveries, Mills said the civil division brought in roughly $19 million in fiscal year 2024. He noted the state's opioid litigation has yielded about $100 million so far for remediation and that the division expects at least another $12 million and still has one ongoing opioid case. "In total, last year, we brought in about $19,000,000," Mills said.

Mills highlighted the Jeremiah M. ("Better Childhood") lawsuit as a major ongoing matter: it is a class-action seeking structural reform of Alaska's child-welfare system. "This case involves a class action against the Office of Children's Services and the Department of Family and Community Services," Mills said. He described it as an institutional reform case that could, if decided in plaintiffs' favor, lead to long-term court monitoring and changes in how the system is governed. Trial is scheduled for May 2025 in federal court; the department has reviewed more than a million pages of discovery and has contracted outside counsel for large-scale document review because in-house staff capacity is insufficient.

Committee members pressed for comparative outcomes from other states that faced similar child-welfare suits. Mills said states that settled or lost such suits have spent "hundreds of millions of dollars" and, in their assessment, have not seen improved system results; he said some states have advised other jurisdictions not to settle. On the plaintiffs' specific remedies, Mills said interrogatory responses from the plaintiffs remain vague: the plaintiffs indicated in discovery that specific reforms were "too early to tell."

Mills also reviewed the division's FY24 additions and early results. The Legislature's FY24 appropriation funded two tribal liaisons (one for the civil division and one for criminal). Mills said those positions have increased cooperation with Alaska Native governments on matters such as child welfare compacts and tribal public-safety initiatives. The consumer-protection unit received an annual increase of about $600,000 last year for staff (an investigator, an attorney and a paralegal). Mills said the unit's enforcement work and investigations have risen; calendar-year comparisons show increases in investigations and legal representation, with roughly $7.3 million in awards and about $188,000 returned to harmed consumers so far.

On federal litigation and resource cases, Mills said the department handled or advised on the delivery of more than $1 billion in highway and airport projects last year and reported successes in cases involving air-quality plans, commercial fishing and coastal-submerged-lands ownership. He said the department is handling more than 80 federal cases now, up from roughly 35-40 several years ago, and expects litigation volume to peak over the next two years while older cases are resolved and new cases that challenge federal rules or agency actions are filed.

Budget mechanics and requests were also discussed. Mills explained that apparent shifts in the unrestricted general fund between fiscal-year columns reflect multiyear appropriations and accounting for funds spent versus remaining balances rather than a straightforward cut. The department showed multiyear litigation appropriations since 2021 ($4 million in 2021, $2 million in 2023, a Tongass-designated portion, and $5 million in FY24) and said it has obligated about $1.7 million of the FY24 $5 million. The department reported spending in the $2 million to $3 million range per year from multiyear litigation appropriations since 2021. For FY25 the department asked the Legislature to continue a $500,000 temporary increment (the governor's request had sought $2 million annually but was reduced last session to $500,000).

Mills addressed operations and staffing changes: a transfer of labor-relations functions from the Department of Administration to the Department of Law, moving four labor-relations analyst positions and requesting $806,000 (with a net increase of one supervisory position). Mills said the move has improved access to legal resources for contract interpretation, arbitrations and negotiations and that litigation-defense work in arbitrations has mitigated roughly $4.8 million in potential damages in recent cases.

Committee members asked for follow-up details the division said it would provide: a breakdown of reimbursable services agreements by client agency, and the outside-counsel contract list the division is assembling (Mills said compiling that list is currently manual because systems do not interoperate). Mills also noted the division's intern program: applications rose from about 94 earlier in the season to roughly 200 so far this cycle, up from about 123 total last year.

The subcommittee did not take formal action at the Feb. 7 meeting. Chair Josephson closed by scheduling the next House Law Finance Subcommittee meeting for Feb. 14 to hear the criminal division's FY26 budget overview.