- Associated Press - Thursday, May 19, 2016

JUNEAU, Alaska (AP) - Alaska legislators’ to-do list is largely unchanged from four months ago, with the budget, oil tax credits and a plan to address a multibillion-dollar budget deficit unresolved as they head into a special session.

While lawmakers passed major bills during the regular session aimed at changes to the state Medicaid program and the criminal justice system, they couldn’t come to terms on the budget and revenue bills.

Ratings agencies have warned the state that a failure to make significant progress in tackling the deficit could result in further credit downgrades. And a failure to pass a fully funded budget by June 1 would mean layoff warnings for thousands of state workers, an exercise that played out during last year’s drawn-out budget impasse that lawmakers and Gov. Bill Walker have wanted to avoid this year.

Legislative leaders hoped to be able to pass a budget as lawmakers bumped up against a constitutional meeting deadline Wednesday. But talks aimed at brokering a deal faltered and the House and Senate could not agree on extending the effort a bit longer, inviting a special session call from Walker.

“We tried,” House Speaker Mike Chenault said early Thursday after the Legislature had adjourned.

Chenault, R-Nikiski, said he thought at various times that a deal was within reach. That view was shared by Senate Republican leaders, who expressed frustration with what they said were shifting demands by minority House Democrats. The minority holds special leverage in crafting a final budget since their support is needed in the House to draw from the constitutional budget reserve to cover state costs not covered by revenue.

House Minority Leader Chris Tuck, D-Anchorage, said disagreement with the Senate over oil and gas tax credit changes proved to be a stumbling block.

“If there’s any one year that requires us to get it right and to spend the time to get it right, this is the year to do that,” Tuck said.

Bills on Walker’s special session agenda include the budget and key pieces of his proposed fiscal plan - changes to oil and gas tax credits, a proposal calling for structured annual draws from Alaska Permanent Fund earnings to help cover state costs and taxes.

Other bills on the agenda deal with adoption, health insurance rates and medical insurance coverage for survivors of peace officers and firefighters. The special session is scheduled to begin Monday.

Sen. Charlie Huggins, R-Wasilla, said he wants to see the Walker administration more involved in trying to facilitate a compromise. “That particular piece needs some steroids,” he said.

Walker told reporters he plans to be more engaged in trying to get a package passed that will help dig the state out of an estimated $4 billion budget deficit.

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.

Tuck said his Democratic-led caucus determined the best move would be going into a special session, where the focus would be narrowed to select bills.

Regardless of whether lawmakers secured a budget deal, they had been bracing for a special session to deal with revenues.


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