- Associated Press - Tuesday, June 2, 2015

JUNEAU, Alaska (AP) - Nearly 10,000 state employees were set to receive layoff notices as the legislative impasse over a state spending plan wore on Monday. Gov. Bill Walker went so far as to offer the services of a mediator to help lawmakers come to terms.

The Alaska Senate on Monday passed a version of the budget similar to what lawmakers passed in late April as a way to force negotiations between the House and Senate. The House, which had passed its own version of the budget early Saturday, rejected the Senate bill Monday evening, setting the stage for a conference committee. The conference committee met for a brief organizational meeting Monday night.

Notices warning of layoffs if a budget isn’t passed by July 1 were being prepared for mailing at the state office building in Juneau Monday morning while the Senate began debate in Anchorage on a version of the budget meant to spur further negotiations. Notices were taken to be mailed Monday afternoon, a Department of Administration spokesman said. Walker called the notices a contractual and moral obligation.

Early Monday afternoon, departments also began sending out releases describing how they would be affected by a partial government shutdown. And Walker announced that he had taken the unusual step of retaining a mediator to help lawmakers come to terms, a service he said he was offering but could not force on legislators.

The Legislature had been scheduled to adjourn April 19. But failure to reach a budget agreement sent lawmakers into overtime, with the House failing to secure the 30 votes generally required to access the constitutional budget reserve to help cover costs. Support from the Democratic-led minority is needed to reach that threshold but the House minority opposed proposed cuts to education funding and the rejection of cost-of-living increases in negotiated union contracts, among other things.

The state faces projected multibillion-dollar deficits amid low oil prices and will need to use savings to get by. Alaska has billions of dollars in reserves but disagreements over how much to spend, and what to spend money on, have led to the current predicament.

Throughout the two special sessions, the Senate let the House take the lead on the budget because that side had trouble securing the budget reserve vote. But the Senate Finance Committee on Sunday did not agree to a compromise between the House majority and minority and instead advanced a version of the budget similar to what legislators passed in late April to keep talks going. Senators balked at some of the terms aimed at garnering sufficient minority support to authorize a draw from savings, including giving pay increases at a time of huge deficits and when state positions are being cut.

The proposal advanced by the Senate would cut the per-student funding formula by $16.5 million for the coming fiscal year, but provide $16.1 million outside the formula, a provision billed as providing some flexibility in further negotiations.

The Senate took an hours-long break Monday before voting along caucus lines to send that plan to the House.

Talks had been taking place between House Minority Leader Chris Tuck, D-Anchorage, and Senate President Kevin Meyer, R-Anchorage, according to the press secretaries for the respective caucuses.

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