- Associated Press - Monday, May 23, 2016

JUNEAU, Alaska (AP) - The Alaska Legislature convened a special session Monday called by Gov. Bill Walker to address numerous issues unresolved during the extended regular session, including the budget, oil and gas tax credits and a plan to confront Alaska’s budget deficit.

The special session starts a new, 30-day clock for legislators to work. But if a budget is not approved by June 1, thousands of state workers will receive notices warning of possible layoffs as part of what Walker has called a contractual obligation. The new fiscal year starts July 1.

House Speaker Mike Chenault, R-Nikiski, said he doesn’t think people should be worried at this time about a potential government shutdown. He said he felt the various sides were close on a budget agreement last week and hoped that could be dealt with swiftly.

Disagreement over how much to change the oil and gas tax credit program has continued to be a stumbling block. Lawmakers worked past the voter-approved 90-day session limit in April and last week adjourned after hitting the 121-day constitutional meeting limit when they couldn’t agree on extending a bit longer.

Walker has given lawmakers the ability to pick up most of the bills on the special session agenda where work left off. But a two-thirds vote in each chamber would be needed for that and minority House Democrats have expressed concern with resuming the tax credit debate where it stopped. Rep. Sam Kito III, D-Juneau, said there were some issues not included in either the House or Senate version of the bill that his caucus would like to see at least discussed.

The House version of the tax credit bill passed with buy-in from minority Democrats, who hold special leverage in crafting a final budget since their support is needed to draw from the constitutional budget reserve to cover state costs not covered by revenue. Senate President Kevin Meyer, R-Anchorage, said his caucus won’t allow the minority to leverage the tax credit bill to get other pieces of legislation passed or items in the budget.

Layoff warnings were sent last year as a stalemate over the budget spanned two special sessions and spilled into June. But that was the major unsettled issue then. While Walker also wanted lawmakers to consider expanding Medicaid, they tabled that for further review - prompting Walker to act unilaterally on that issue after they adjourned.

Heading into this special session, Walker has consistently said he wants a fiscal plan to help dig the state out of an estimated $4 billion budget deficit exacerbated by low oil prices. Not a single piece of his plan has passed the Legislature in the four months they’ve met so far. The administration has backed off on one piece, dealing with cruise ship passenger taxes.

While the House and Senate passed their own versions of Walker’s tax credit bill, differences between the two have been a point of contention.

Walker said his plan - which includes industry tax increases, a personal income tax and structured, annual draws from Alaska Permanent Fund earnings - represents a philosophical shift in how the state funds government. The state has long relied on oil revenues.

He told reporters last week that he’s open to other pieces being plugged in but has been so fixated on getting his plan passed because he hasn’t seen an alternative put forth.

He said he senses a desire among legislators to work more collaboratively and plans to be more engaged.

Other issues on the special session agenda deal include bills dealing with adoption, medical insurance coverage for survivors of peace officers and firefighters and a program aimed at addressing health insurance premium costs. Walker added another item Monday - a bill that stalled during the regular session that calls for establishing an oil and gas infrastructure development program.

Lawmakers aren’t obligated to pass an item just because it’s on the agenda.

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