Next election may delay plan to fund state government

Sen. Kevin Meyer, R-Anchorage, talks with an aide and Sen. Mia Costello, R-Anchorage, before a Senate floor session in May 2016 in Juneau. Meyer blames Gov. Bill Walker for early candidate filings, after Walker called a special session. (Photo by Rashah McChesney/KTOO)

The next statewide election is more than a year away, but electoral politics may already be affecting the chances for lawmakers to agree on a lasting solution to the state’s dire financial situation.

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Candidates have been announcing plans for governor, lieutenant governor and the Legislature since July.

And they’re taking positions that could make a budget deal more difficult.

Almost two-thirds of legislators have already indicated they’ll run in next year’s election, by registering or filing a letter of intent with either the Alaska Public Offices Commission or Division of Elections, through Thursday, Sept. 28.

Anchorage Republican Sen. Kevin Meyer is one of three lawmakers who’ve filed for statewide office. He wants to be lieutenant governor.

Rep. Mike Chenault and Sen. Mike Dunleavy have filed for governor, although Dunleavy suspended his campaign.

Meyer said Gov. Bill Walker’s call for a special session on Oct. 23 has led candidates to file early.

“I’m going to blame the governor on that, because when we’re in session — whether it’s special session or regular session — we can’t raise money,” Meyer said. “We are forced to get an earlier start, like now, to make our announcement, do our paperwork, and start doing the fundraising. … We are in the campaign mode, whether you’re running for a House seat, or a Senate seat, or statewide office. That will have an impact on the success of this special session.”

Walker has called for the Legislature to consider a 1.5 percent tax on wages and self employment income. It would raise $320 million, roughly one in eight dollars needed to close a $2.4 billion gap between what the state spends each year and what it raises in revenue.

Walker spokeswoman Grace Jang said the special session was needed.

The independent governor also has put a bill related to criminal sentencing on the session agenda.

“Gov. Walker called the special session to fix the economy and address public safety, because neither of those things can wait,” Jang said.

Meyer said Walker’s tax proposal is similar to an income tax the Senate has already voted against. He noted the Senate majority caucus is asking Walker to make more cuts to spending before asking for new revenue.

It’s been nearly two years since Walker proposed a plan to balance the budget. If lawmakers can’t reach a compromise before the election, it could take at least another year and a half to settle on a plan.

Anchorage Democratic Rep. Les Gara said a delay will hurt the economy.

“I’m always hopeful for compromise,” Gara said. “Politics right now, with a growing recession, losing 14,000 jobs in the last two years, you’re always in danger that politicians will sell fake sound bites and destroy the economy and get elected.”

Gara said the Senate majority plan to cut the size of government further will lower employment.

“You’re killing jobs by sound-biting your way into a bigger recession,” Gara said.

It’s not just sitting lawmakers who are dissecting potential plans to balance the budget.

Republican gubernatorial candidate Scott Hawkins said he supports parts of a plan to draw money from permanent fund earnings to pay for government. But he opposes the size of the cut the Legislature made to permanent fund dividends.

“I supported certain elements of it,” Hawkins said. “The fatal mistake it made was arbitrarily setting the value of the dividend. And setting it at a lower level than it really needs to be.”

The lack of agreement on a long-term plan disturbs Gunnar Knapp, a retired professor at the University of Alaska Anchorage.

“It’s frustrating to see us go year after year after and not be able to come to a resolution about our fiscal situation, and now to hear that, well, we’ve got an election coming up, and so expect another year to go by without anything real happening,” Knapp said.

Knapp said the uncertainty is hurting the economy.

“Who’s going to move to Alaska to take a job here and start a new career if they don’t know what kind of public services we’re going to have, what kind of taxes there are going to be, what kind of future we are looking at,” Knapp said.

The October special session will be the ninth of Walker’s three years in office.