Thursday marked Day 122 for lawmakers in Juneau – the first day of a special session after the Alaska Legislature failed to pass a budget before its constitutional deadline Wednesday.
By midday Thursday, the halls of the Capitol were sparsely populated. Many lawmakers had already left town for the weekend, acknowledging that work wouldn’t ramp-up until next week.
The big sticking point between the two legislative bodies remains a broad-based tax. The Democrat-led House and Governor Bill Walker have been pushing for an income tax, but the Republican-led Senate reaffirmed its opposition to one on Thursday. Those differences have kept lawmakers from moving forward on a budget.
At this point, neither side has outlined a clear road map for how to reach an agreement in the next 29 days. But the governor told reporters Thursday he believes progress has been made.
“I know that people were disappointed it wasn’t done in 90 days, it wasn’t done in a 120 days, but this is tough stuff,” Walker said. “There’s lots of discussion going on, I wouldn’t judge everything by what you see necessarily in the public.”
Legally, a special session gives lawmakers one more month to work, but state officials are up against a harder deadline — one with human consequences. If the legislature doesn’t pass a budget by June 15, pink slips will be sent to state employees telling them they will be in layoff status at the start of the fiscal year, July 1.
“I think I can speak safely for everyone by saying no one wants to see a government shutdown,” House Speaker Bryce Edgmon (D-Dillingham) said of the prospect.
Senate president Pete Kelly (R-Fairbanks) said the Senate’s hardened opposition to an income tax won’t likely be softened by the issuance of pink slips.
“Ultimately, that just may be the collateral damage of getting these kinds of larger issues dealt with. Our hope is they don’t get laid off,” Kelly told reporters Thursday.
Another deadline is June 1. That’s when the governor must notify state workers, warning them that layoffs are possible if the legislature doesn’t approve a budget. If lawmakers haven’t made progress on a broad-based tax by the time notifications must go out to state workers, the governor said he will introduce a measure of his own.
“I think when we get to a point where we’re having to send out notification to employees, I think that’s roughly when it would be time for me to step in,” Walker said, without providing further details.
Walker’s special session proclamation calls for “an act or acts to increase an existing tax or to establish a new broad-based tax for the purpose of generating new revenue for the state.”
When asked what increasing an existing tax might include, Walker replied: “There’s corporate tax, of course, is one that we provide. We have various taxes associated with the oil industry, certainly there,” Walker said. “I don’t think that’s all the answer but I wanted to leave it as broad as possible.”
Walker indicated it’s important the legislature pass some framework for a broad-based tax this year, but suggested that it could be a plan that takes place several years from now and include specific triggers for implementing it.