- Associated Press - Friday, June 2, 2017

JUNEAU, Alaska (AP) - With the budget and a plan to address Alaska’s deficit unresolved, Gov. Bill Walker on Friday said he planned to propose a compromise package aimed at ending a legislative stalemate and averting a potential government shutdown.

Walker announced his plans one day after notices were mailed to thousands of state employees warning of potential layoffs if a budget is not finalized by July 1, the start of the new fiscal year.

In a statement, Walker said it had become clear to him following meetings with legislative leaders that negotiations had “reached a stalemate,” prompting his administration to begin work on a proposal that he plans to present to lawmakers next week.

“A government shutdown is unacceptable, and compromise is essential,” Walker said, adding later that there’s no reason that lawmakers cannot finish their work within the current special session, which was scheduled to end in two weeks.

Walker spokesman Jonathon Taylor said he did not know what the final package offered by the administration might look like.

Walker, a Republican-turned-independent, expressed hope at the start of the special session last month that it would be productive. However, there have been few public signs of progress since.

The House and Senate have each passed their own version of legislation offered by Walker that would limit the length of initial prescriptions of opioids, with some exceptions. The House has not yet voted on whether to accept the Senate version.

And with little on their calendars because bills related to the budget and a fiscal plan haven’t been moving, both chambers have at times held so-called technical sessions, for which attendance is not mandatory.

Legislators are eligible for a daily allowance while the session is under way. Senate President Pete Kelly has asked members of his Republican-led caucus to claim that allowance only for days they’re required to be in Juneau.

Legislative leaders have said they do not want a government shutdown, but they also have continued to stand behind positions staked out months ago for how best to address the deficit.

There is general agreement that earnings from the state’s oil-wealth fund, the Alaska Permanent Fund, should be used to help fund government, which is significant since fund earnings traditionally have been used to pay Alaskans an annual dividend and help guard the fund against inflation.

But the House majority coalition, composed largely of Democrats, also has supported a broad-based tax and overhaul of oil tax and credit policies as part of what it sees as a more balanced plan. The Senate rejected a House-approved income tax and proposed new limits on future spending.

The Legislative Finance Division has said that despite spending cuts, Alaska is in its fifth straight year of substantial budget deficits. The state, which has long relied on oil revenue, has a multibillion-dollar gap to fill for the coming fiscal year amid continued low oil prices. The state has been using savings to get by.

During the special session, which was called by Walker, lawmakers have yet to take up a proposed increase in motor fuel taxes, the state’s infrastructure budget or an alternate broad-based tax or tax increase.

Walker, in setting the agenda, did not propose a specific alternative tax for lawmakers to consider and lawmakers have not advanced one of their own.

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