- Associated Press - Tuesday, June 6, 2017

JUNEAU, Alaska (AP) - A day after offering a coolly received budget plan, Gov. Bill Walker on Tuesday invited Alaska legislators to come up with a compromise of their own that would avoid a government shutdown and reduce the state’s deficit.

Walker offered his plan Monday after he said legislative negotiations had stalled. He said none of the legislative caucuses endorsed his proposal, and he understood the passion of those who spoke against it. But he said he can’t stand for inaction.

Walker told reporters he wasn’t wild about the package, either, and had to back off commitments he previously made because they wouldn’t happen under the plan.

As part of Walker’s proposal, the governor would settle for eliminating cashable oil and gas tax credits and having credits used to bring fields into production but give up on other provisions, Revenue Commissioner Randall Hoffbeck said.

Walker, who has called for a comprehensive fiscal plan to resolve the deficit, also acknowledged the compromise he offered would not erase the shortfall but could reduce it to perhaps about $300 million. Future changes would likely be needed, he said.

The proposal included a tax on wages and earnings that Hoffbeck said could generate about $100 million a year. It also called for raising taxes on motor fuels.

It would require the House majority coalition, composed largely of Democrats, to give up on increasing taxes on the oil industry at certain prices and the Republican-led Senate to abandon deeper cuts to education and the university system.

The proposal also called for the Senate version of a plan to use earnings from Alaska’s oil-wealth fund to help pay for government. The Senate bill would pay Alaskans a lower initial dividend than the House bill - $1,000 compared to at least $1,250.

House Speaker Bryce Edgmon said Monday the proposal fell short of what his coalition has been working on.

Senate President Pete Kelly told reporters Tuesday his caucus doesn’t like everything Walker offered and planned to continue negotiating with the House on the budget as it normally would.

But he said there are things in Walker’s proposal that he thinks the Senate can work with and he saw as helpful efforts by Walker to set goal posts for negotiations.

Walker urged members of the public to tell their legislators it’s OK to compromise. And he implored lawmakers to “please, please” come up with a balanced compromise of their own if they can’t work with what he put forward.

He said Alaska is in a time of crisis. “Those that don’t believe that we’re in a crisis, I don’t live in their world,” he said.

The new fiscal year starts July 1.

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