An Anchorage senator says a plan by Gov. Bill Walker to pay off nearly $1 billion in tax credits runs afoul of the state constitution.

In February, Walker proposed selling up to $1 billion in bonds so the state can buy back the outstanding oil and gas exploration credits.

But Sen. Bill Wielechowski says Walker’s plan does not pass constitutional muster.  

On Wednesday he released an opinion on SB 176 and HB 311 from the Legislature’s legal office. Both bills are in respective finance committees awaiting further hearings.

The opinion states that while it’s difficult to predict the outcome of a legal challenge, “There is a substantial risk that the issuance of bonds in accordance with SB 176 will be found by a court to be unconstitutional.”

 Wielechowski, a member of the Senate Resources Committee, challenged the bill on constitutional grounds several weeks ago.

“The constitution says you cannot bond for debt; you cannot bond to pay off state debts,” Wielechowski said. “The reason for that is the founders of our constitution just didn’t want us to get into a situation where we were paying off debts for maybe generations, taking many years to pay off our debts. They wanted a pay-as-you-go system.”

But Revenue Commissioner Sheldon Fisher says the administration has a different opinion. He says the bill has already received a constitutional review by the department of law, outside counsel as well as the state’s bonding experts.

“I think this (legislative) legal opinion will create some questions in people’s minds,”Fishere said. “I’ve been spending the day kind of walking through the Capitol, talking to people, trying answer their questions and reassure them that this is legal.

“At the end of the day, the bill will be OK.  I don’t this is going to be the issue to determine whether the bill passes or not.”

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