- Associated Press - Wednesday, May 18, 2016

JUNEAU, Alaska (AP) - Alaska lawmakers faced a special session after failing to reach agreement on a budget deal ahead of a constitutional meeting deadline.

Gov. Bill Walker spared no time in issuing a special session call early Thursday, after the Senate and House ended the extended regular session. Legislative leaders had hoped to be able to pass a budget by Wednesday but talks aimed at brokering a budget deal faltered and the House and Senate could not agree on extending themselves for a bit longer.

The special session is scheduled to begin Monday in Juneau. Bills on the agenda include the budget, oil and gas tax credits, a proposal to allow for structured annual draws from Alaska Permanent Fund earnings and taxes. Also on the agenda are bills dealing with adoption, health insurance rates and medical insurance coverage for survivors of peace officers and firefighters.

Leaders of the House’s Republican-led majority expressed disappointment that lawmakers weren’t able to come to terms on the budget, with House Speaker Mike Chenault, R-Nikiski, saying he thought at various times that a deal was within reach.

“We tried,” he said.

Lawmakers blew past the 90-day voter-approved session limit last month and hit the constitutional meeting limit of 121 days Wednesday. The constitution allows lawmakers the option to extend for up to 10 more days with a two-thirds vote in each chamber. The House fell one vote shy of that threshold, while the Senate voted to extend.

The Democratic-led minority sought to limit any extension to one day, Chenault said, but there were concerns, he said, that that would provide no wiggle room if additional time was needed for drafting or to otherwise wrap up the remaining budget work.

Once the Senate adjourned to end the extended session, Chenault said the House had no choice but to follow suit, which it did shortly before midnight.

In a release, House Minority Leader Chris Tuck said his Democratic-led caucus has been working to reach compromise solutions on the budget, oil and gas tax credits and a state fiscal plan. The caucus will redouble those efforts in special session, the Anchorage Democrat said.

Legislative leaders had expected Walker would call a special session to deal with revenue bills regardless of what happened Wednesday. Walker has said he wants a fiscal plan passed this year to help dig the state out of an estimated $4 billion budget deficit exacerbated by low oil prices.

The Senate started the day Wednesday with an hours-long debate on its rewrite of the tax credit bill, which would phase out credits for Cook Inlet, impose a tax on Cook Inlet oil and limit a tax break for oil from newer North Slope fields. The Senate version didn’t go as far as the House version in addressing North Slope credits, and it didn’t raise the minimum tax on North Slope producers as Walker recommended and minority Democrats pushed for.

Sen. Cathy Giessel, R-Anchorage, said nothing about the Senate’s plan is haphazard or rash. She said no one is happy about the bill but she hoped it had the makings of a durable policy.

The president and CEO of the Alaska Oil and Gas Association, Kara Moriarty, said the bill represents a “monumental shift in policy in Cook Inlet and completely alters the system for small and new companies to Alaska.”

The House, which struggled until last week to reach a compromise on credits, rejected the Senate changes Wednesday night.

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