Gov. Bill Walker called the legislature into a special session that begins Monday to finish the work lawmakers failed to complete during the 121-day session that ended Wednesday.
Big differences remain over the how to pay for the state’s budget and it’s not clear how lawmakers will overcome challenges in the 30-day special session that they couldn’t solve in the past four months.
There are several things that will be different from the regular session. The first is that the legislature will be focused on 10 items included in Walker’s call for the special session.
These items include the state’s operating and capital budgets, legislation to draw money from Permanent Fund earnings to pay for the annual budget, as well as a bill to overhaul the state’s oil and gas taxes.
Walker also called for legislators to consider bills to introduce an income tax and to raise taxes on motor fuel, alcohol, mining, tobacco, marijuana and commercial fishing.
House Minority Leader Chris Tuck, D-Anchorage, said it will be good for the legislature to focus on these items.
“We don’t want to see guns on campus being brought up,” Tuck said. “We don’t want to see a bunch of things being brought up that really would distract us from fixing the fiscal situation that we have now.”
The legislature faces a July 1 deadline to avoid laying off workers and shutting down state government. Pink-slip notices will go out if the legislature doesn’t pass a budget by June 1.
House Speaker Mike Chenault said these notices should have been avoided.
“It causes … maybe not a lot of physical damage, but it causes mental damage to state employees,” Chenault said. “Not knowing whether you’re going to get laid off in 30 days. Not knowing whether … you are going to be able to pay the rent.”
Walker said he plans to play a more active role talking with legislators than he did during the regular session.
“I’m very respectful of the separation of powers, but I think that these are pieces of legislation with my name on it,” Walker said. “They’re in a special session that I have called, and I will be very engaged on a daily basis.”
The legislature spent the last day disagreeing on how to extend its session. The majority caucuses wanted to pass a 10-day extension, but they couldn’t get the House Minority to agree.
The bigger disagreement is over how to pay for the budget. Chenault said his caucus would prefer to pay for the budget by drawing on the state’s savings – the Constitutional Budget Reserve.
“It’s the easiest option for members of my caucus,” Chenault said, adding that he believes “it’s the best for the state of Alaska.”
But this will take a vote by three-quarters of both legislative bodies, and the House Minority has enough members to block a CBR draw.
Tuck said agreement on oil and gas tax changes is essential to a broader agreement. He expressed disappointment that the Senate didn’t stay closer to the other body’s version of House Bill 247, a bill that would reform oil and gas industry credits.
“There was a bipartisan effort that went out from the House over to the Senate,” he said. “The Senate passed something back over to us that just simply wasn’t acceptable to us.”
Tuck also said he wants the budget to be part of a longterm fiscal plan for the state.
Walker still wants the legislature to pass a plan that will balance the budget by the fiscal year that starts in July 2018.
The bond rating firm Standard and Poor highlighted the importance of the state balancing its spending and revenue Thursday. In a ratings update, an S & P analyst said the firm expects negative pressure on Alaska’s credit rating to intensify if lawmakers can’t agree on fiscal reforms.
Walker has included many of the different tax increases in one item. They stalled when they were in separate bills.
“Maybe what’s been seen is how difficult it is to do the plan one piece at a time,” Walker said.
Some legislation that isn’t related to the budget will be on the agenda. It includes a bill that would make changes to some child adoption procedures. Other measures are aimed at foster care, the state’s individual insurance market and benefits for law enforcement officers and firefighters who die in the line of duty.