JUNEAU, Alaska — Alaska Gov. Bill Walker called lawmakers into a new special session Friday, ordering them to focus solely on passing a state budget with the threat of a government shutdown looming.
The budget has been entangled in a legislative fight over how best to address Alaska’s multibillion-dollar deficit.
While there’s general agreement about using earnings from Alaska’s oil-wealth fund to help pay for government, the House and Senate have been at odds over what else needs to be done and when.
Walker, who has pleaded with lawmakers to compromise, expressed confidence that a shutdown can be avoided, though the state has been preparing for that possible outcome if a budget isn’t passed before the new fiscal year starts on July 1.
Walker told reporters he still believes the state needs a fiscal plan that includes additional revenue. But he said he opted to limit the special session agenda to just this operating budget for now because time is running short.
“Every day is critical in a situation like this,” he said. He wasted no time in calling a new special session, which opened Friday afternoon, following the Senate’s adjournment from the prior special session.
For months, lawmakers have been wrestling with the best path forward for the state, plowing past deadlines and pointing fingers over who’s to blame for keeping them in Juneau so long.
The House majority coalition composed largely of Democrats conditioned its support for using Alaska Permanent Fund earnings and initially limiting the size of the dividend that Alaskans receive from the fund to passage of a broad-based tax and an overhaul of oil tax and credit policies. They argued that was a more balanced approach.
The Republican-led Senate majority, meanwhile, rejected a House-approved income tax as unnecessary and potentially harmful to a state in recession.
The House and Senate agreed on the need to end cashable credits for oil and gas exploration, but that issue stalled amid disagreement on other oil tax provisions.
Late Thursday, the coalition voted to stuff an operating budget into the state capital budget and adjourn from the first special session, forcing the Senate into a take-it-or-leave-it choice on the budget package.
Senate President Pete Kelly called the package unacceptable. The Senate adjourned without even voting on it.
The House earlier in the day Thursday approached the Senate with a structure for a deal that the House later pulled back, Kelly said. The Senate as part of talks committed to working on revenue issues after an operating budget was passed but could not guarantee an outcome on that, he said.
House leaders on Friday said the Senate had been uninterested in new revenue.
House Majority Leader Chris Tuck said the House tried working with senators on the revenue issue “and we just simply could not get them to budge.”
Lawmakers in both chambers said they were willing to continue negotiating.
“The negotiators have to keep focused on why we are here,” Senate Finance Committee Co-Chair Lyman Hoffman said. “Constitutionally we have to pass an operating budget. And the alternative of government shutdown is absolutely unacceptable.”