- Associated Press - Tuesday, June 2, 2015

JUNEAU, Alaska (AP) - If you have a sense of deja vu, you’re not alone. The Alaska Legislature is seemingly right back to where it was more than a month ago.

After weeks of fitful negotiations and watching would-be deals crumble, the budget remains unsettled, with negotiated raises for union workers a sticking point. With each passing day, the stakes get a little higher. Gov. Bill Walker’s administration has been making plans for a partial government shutdown if a fully funded budget isn’t passed by July 1, including mailing layoff warnings to about 10,000 state employees. Walker has gone so far as to retain a mediator to help lawmakers come to terms, if they want the help.

Here’s a look at where things stand:



The state faces multibillion-dollar deficits amid low oil prices and needs to use savings to help balance the budget. Alaska has billions of dollars in reserves, including in the constitutional budget reserve, which lawmakers have been looking to tap.

But accessing the fund generally requires a three-fourths vote in each the House and Senate. That’s not a problem in the Senate, where 15 of the 20 members belong to the majority; caucus rules dictate voting for the budget. But to reach that threshold in the House, support is needed from Democrats. The Democratic-led minority had been holding out over proposed cuts to education and a proposal to reject honoring negotiated cost-of-living increases in union contracts, among other things. The minority also wanted Medicaid expansion.

With the House unable to secure the vote to authorize the draw, the Legislature, already in overtime, passed a partially funded budget on April 27. That didn’t fly with Walker, who immediately called the lawmakers into a special session.



A dispute over where lawmakers should meet overshadowed the special session called by Walker for Juneau, which lawmakers cut short last month. The Legislature on May 21 convened a 30-day special session of its own, in Anchorage.

As for Medicaid expansion, the Republican-led majorities have tabled that for now, pending further review.

With the budget, the Senate had let the House take the lead because that side had trouble securing the three-quarters majority vote. Early Saturday, after marathon floor sessions, the House agreed to a plan that addressed a number of the issues Democrats had been fighting for, along with a $29.8 million cut to be absorbed by the administration. The plan still needed to have language added to authorize a draw from the reserve for the fiscal year starting July 1.

Rather than accept it, the Senate Finance Committee advanced a version of the budget similar to what passed in late April, as a way to force further talks. Majority senators, in particular, have questioned giving raises at a time of deficits and when state job positions are being cut.



A conference committee comprised of three members each from the House and Senate will try to come to terms. Budget conference committees typically have conducted their deliberations in private, emerging in the public setting of a committee room to announce terms that have been agreed upon.



It’s possible an agreement could be reached to secure the three-quarters majority vote and end the special session.

Another idea that has been floated by Republican leaders would allow for the constitutional budget reserve to be accessed by a simple majority. That’s within the rules for the reserve fund, but it would involve limiting the amount of money otherwise available to spend. In this case, it would mean moving billions of dollars from the Permanent Fund earnings reserve, the pool from which dividends are derived, to the constitutionally protected principal of the Permanent Fund.

That idea has faced resistance from within the GOP-led House majority.

But being able to access the constitutional budget reserve with a simple majority would take “some of the madness out of how we make our budgets,” said Senate Finance Committee co-chair Sen. Pete Kelly, R-Fairbanks. With that approach, “you don’t put power in the hand of a very tiny group of recalcitrant people,” he said.

House Minority Leader Chris Tuck, D-Anchorage, said Alaskans want and expect their political leaders to work together.



Kelly said he didn’t think that would happen. But Walker has said he has no choice but to make preparations for a shutdown.

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