Alaska campaign finance regulators, already challenged by a major budget cut by the Legislature last year, are preparing for a second blow that will lead to more layoffs and, some fear, less election oversight as one of its two offices is shut down.

The Legislature last year cut funding to the Alaska Public Offices Commission by 43 percent, reducing its $1.4 million budget to $791,000. Now, the Legislature is moving ahead with plans to strike another $200,000, reducing the agency's budget to $591,000, a 57 percent drop from two years earlier.

As elected officials, legislators' campaigns and financial disclosures are regulated by the agency. The agency also regulates lobbyists who call on legislators.

Last year's budget also included an additional $240,000 that could be collected by the agency through fees, such as from lobbyists registering with the agency. But APOC staff have said they weren't authorized by the Legislature to increase or create new fees, so they can only collect $120,000.

"They never changed the statute to increase the fee," said Heather Hebdon, APOC's campaign disclosure coordinator. "I've seen it called a shell game."

The proposed cuts will likely mean the loss of two employees, leaving six, down from 13½ full-time positions before last year's cut, said Hebdon.

She said if the latest round of cuts is accepted by the Legislature, it will be harder for APOC to regulate fundraising and spending by candidates and campaigns during busy state elections this summer and fall. The agency also enforces disclosure requirements for lobbyists, a job handled by one employee in Juneau, as well as disclosure requirements for public officials.

Hebdon said she didn't know why the Legislature was making such steep cuts to the agency.

But she offered: "If you have to make hard choices and you're considering taxing people and taking their Permanent Fund dividend, I don't know if you want someone overseeing what you do to get elected."

Rep. Lynn Gattis, R-Wasilla, said there was nothing nefarious about the cut she proposed, which was accepted Tuesday by the House Finance Committee. A similar cut is working its way through the Senate budget process, one of numerous proposed reductions as the Legislature tries to narrow the state's $3.8 billion budget deficit.

Gattis said she didn't have any beef with APOC.

"They serve a purpose," she said.

"I look at all budget questions the same way. How can you be more effective and do the same or better job for less, and can you utilize what you have learned as an agency to be more efficient?"

She said the executive director of the agency, Paul Dauphinais, had offered efficiencies that included conducting trainings for candidates, officials and groups online instead of in person to reduce travel costs.

The subcommittee took those ideas into account when it approved the reduction, said Gattis.

Tyson Gallagher, Gattis' chief of staff, said the House finance subcommittee Gattis chaired has recommended the necessary law changes so the agency can collect extra income through fees.

Gallagher said if the cuts to APOC turn out to be too deep, the Legislature can provide supplemental funding later. Also, current proposals would make $750,000 available to the Department of Administration for general use. APOC is an agency of that department, and the commissioner can use some of that money if the cuts prevent it from doing its job.

Hebdon said the funding cuts, if accepted, will allow only one office to remain open. She said APOC employees in Anchorage are fearful the Juneau delegation, which successfully fought to keep the Juneau APOC office open last year, will do the same again this year, leading to a shutdown in Anchorage and the loss of institutional knowledge.

"I don't see anyone from the Anchorage office transferring to Juneau, so (the office's efforts) will come to a screeching halt," she said. "I guess lobbying will continue to be enforced, but in what will be a busy election cycle for most incumbents there will be no one monitoring anything, really."

Sen. Dennis Egan, D-Juneau, said if one office has to close, it should be the one in Anchorage. Lobbyists, lawmakers and others gather in Juneau for 90 days each year anyway, and the agency's reports are online, so residents in the rest of Alaska can still access them.

Some lawmakers want the agency shut down altogether. But Egan said he just wants some disclosure requirements reined in.