It’s crunch time for the Alaska legislature to pass a budget. This is the last week of a special session and if they can’t reach an agreement, the state could face its first-ever government shutdown.
For lawmakers in Juneau, getting to a budget deal this week will be like solving a jigsaw puzzle. Right now, all of the pieces are on the table, but lawmakers have to work together to figure out how they fit together. In the end, Alaska’s future may not end up looking like what either side had planned, but, legislators on both sides say they’re still optimistic.
On Monday, day 147 since lawmakers first gaveled into session in January, the House took up the state budget for capital projects and maintenance. Normally, it’s one of the last bills passed in a session, but, members of the House said Monday that the goal was to move the legislation forward — in hopes that the rest of a budget deal might fall into place thereafter.
“It’s just another piece of the puzzle, putting in place to getting a state budget and getting us out of here,” said Rep. David Guttenberg (D-Fairbanks), a member of the House Finance Committee.
The Senate is standing by.
“I’ve been watching the conference committees. I like the direction that things are going,” Senate Majority Leader, Peter Micciche (R-Soldotna) said in an interview Monday.
But, reaching a budget deal by Friday is going to take more. So, what are the must-have pieces on both sides?
Both the House and Senate must pass a budget compromise, but, the House wants new revenues first — like oil tax legislation and a broad-based tax. Meanwhile, the Senate wants deeper cuts, and to use some of the Permanent Fund’s earnings — as outlined in a percentage of market value plan (POMV) for state funding.
Micciche says the Senate is now willing to give up some of those key pieces if it could just get the one cornerstone of the puzzle — a budget.
“At this point, the Senate has retracted to passing and funding a budget, which includes the POMV, right, from the earnings reserve, which has never been done before. The Senate is not asking for anything else,” Micciche said.
The Senate has rejected the idea of a broad-based tax, which is where crafting a compromise gets tricky.
“We can’t get out of here without that,” said Guttenberg, when asked whether the legislature would need a second special to address a broad-based tax. “We can’t tax Alaskans, we can’t give away money to the oil industry, and tax Alaskans, and give that same amount of money to an industry when we’re cash strapped. So, to me, that’s a big piece of it.”
“That legislation is not going to make it across the finish line,” Micciche said in reference to a broad-based tax. “So, the Senate is standing ready and we are negotiating with the House to compromise on the budget documents. Anything else is going to have to happen next year.”
So, can lawmakers be done by in a matter of days?
“I’ve been wrong before, but, I think the pieces are there and I think people have the right objectives,” Micciche said. “A large portion of Alaskans make their living in the summer. Whether they’re sport, commercial, the visitor industry. Shutting down those services would have a substantial impact on the lives of Alaskans, and frankly, it’d be embarrassing for the legislature not to get completed at that time.”
Guttenberg is also optimistic.
“It might not look like the picture on the puzzle box, but, all the pieces will fit in place somehow,” Guttenberg said. “Things happen fast, we’re five days, we can wave all the rules when we have a package in place, and we can zip along. Will it happen? That’s really hard to say, I’m not going to speculate.”
Many lawmakers believe if they can just get enough of the framework of the puzzle in place this year, that would be enough to put off work on the rest of the picture.
If lawmakers don’t pass a budget by Friday, Governor Bill Walker could call them back into a special session. If he doesn’t — legislators would have to come up with enough votes to do that themselves.