Numerous bills remain up in the air as legislators prepare for special session

Governor Bill Walker called the Legislature into a special session that begins Monday to finish the work lawmakers failed to complete during the 121-day session that ended Wednesday.

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Governor Walker has requested a complete overhaul of the state's oil and gas tax credit program (Photo by Skip Gray, 360 North)
Governor Walker has requested a complete overhaul of the state’s oil and gas tax credit program (Photo by Skip Gray, 360 North)

But big differences remain over the how to pay for the state’s budget. And it’s not clear how lawmakers will overcome challenges in the 30-day special session that they couldn’t solve in the past four months.

There are several things that will be different than in the regular session. The first is that the Legislature will be focused on ten items included in Walker’s call for the special session.

These items include the state’s operating and capital budgets. But they also include legislation to draw money from Permanent Fund earnings to pay for the annual budget, as well as a bill to overhaul the state’s oil and gas taxes.

Walker also called for legislators to consider bills to introduce an income tax and to raise taxes on motor fuel, alcohol, mining, tobacco, marijuana, and commercial fishing.

House Minority Leader Anchorage Democrat Chris Tuck said it will be good for the Legislature to focus on these items.

“We don’t want to see guns on campus being brought up,” Tuck said. “We don’t want to see a bunch of things being brought up that, um, really would distract us from fixing the fiscal situation that we have now.”

The special session also will differ from the regular session because the state is facing a deadline to avoid shutting down the state government on July 1st and laying off government workers. Pink-slip notices would go out on June 1st if the Legislature doesn’t pass a budget by then.

House Speaker Mike Chenault, R-Nikiski, wields the gavel during the first day of the second regular session of the 29th Alaska Legislature, Jan. 19, 2016. (Photo by Skip Gray/360 North.)
House Speaker Mike Chenault, R-Nikiski, wields the gavel during the first day of the second regular session of the 29th Alaska Legislature, Jan. 19, 2016. (Photo by Skip Gray/360 North.)

House Speaker Mike Chenault said these notices should have been avoided.

“It causes… maybe not a lot of physical damage, but it causes mental damage to state employees,” Chenault said. “Not knowing whether you’re going to get laid off in 30 days. Not knowing whether your wife and kids – or you’re going to be able to pay the rent.”

Governor Walker said he plans to play a more active role talking with legislators than he did during the regular session.

“I’m very respectful of the separation of powers, but I think that these are pieces of legislation with my name on it,” Walker said. “They’re in a special session that I have called. And I will be very engaged on a daily basis.”

The Legislature spent the last day disagreeing over how to extend its session. The majority caucuses wanted to pass a 10-day extension. But they couldn’t get the House minority caucus to agree.

The bigger disagreement is over how to pay for the budget. Chenault said his caucus would prefer to pay for the budget by drawing on the state’s savings – the Constitutional Budget Reserve.

“It’s the easiest option for members of my caucus,” Chenault said. “I believe it’s the best – it’s the best for the state of Alaska.”

But this will take a vote by three-quarters of both legislative bodies. And the House minority is able to block a CBR draw.

Rep. Chris Tuck, D-Anchorage, in April. (Photo by Skip Gray, 360 North)
Rep. Chris Tuck, D-Anchorage, in April. (Photo by Skip Gray, 360 North)

Tuck said agreement on oil and gas tax changes is essential to a broader agreement. He expressed disappointment that the Senate didn’t stay closer to the House oil and gas tax bill.

“There was a bipartisan effort that went out from the House over to the Senate,” Tuck said. “The Senate, um, passed something back over to us that just simply wasn’t acceptable to us in the House Independent Democratic Coalition.”

Tuck also said he wants the budget to be part of a long-term fiscal plan for the state.

Walker still wants the Legislature to pass a plan that will balance the budget by the fiscal year that starts in July, 2018.

The bond rating firm Standard and Poor highlighted the importance of the state balancing its spending and revenue Thursday. In a ratings update, an S and P analyst said the firm expects negative pressure on Alaska’s credit rating to intensify if lawmakers can’t agree on fiscal reforms.

Walker’s included many of the different tax increases in one item. They stalled when they were in separate bills.

“Maybe what’s been seen is how difficult it is to do the plan one piece at a time,” Walker said.

Some legislation that isn’t related to the budget will be on the agenda. It includes a bill that would make changes to some adoption procedures. Other measures are aimed at foster care, the state’s individual insurance market, and benefits for law enforcement officers and firefighters who die in the line of duty.