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Associated Press 

Gov. Walker pushes budget agenda as special session begins

Lawmakers reluctant to follow lead in fifth special session in two years


State legislators met Monday for their fifth special session in two years, with Gov. Bill Walker saying they need to finish the work of addressing Alaska's gaping budget deficit.

But Walker's agenda could face an uphill battle, given that proposals he's asking lawmakers to consider have gained little traction.

"I don't think it's going to be very productive at all," said House Minority Leader Chris Tuck, D-Anchorage.

The state faces a multibillion-dollar deficit amid low oil prices. Tuck said his fear is that holding a special session now - just weeks after the last special session and weeks before the primary - will force people to take hard-line positions, "and it's not going to be in favor of what the governor wants to see."

Walker's special session proclamation includes a proposal to use earnings from the Alaska Permanent Fund to help pay for state government; a tax package; and a proposal dealing with oil and gas tax credits. Newly included in the tax package is a sales tax.

The permanent fund bill is the centerpiece of Walker's fiscal plan, but it floundered in the House last month after passing the Senate.

In vetoing nearly $1.3 billion from the budget, Walker said he was taking legislators' "excuses" for not acting on that bill off the table by further trimming state spending, cutting credits to oil companies and reducing the amount of money available for the Permanent Fund Dividend, which most Alaskans receive.

Cuts to the amount allocated for the dividend and tax credits comprise the bulk of Walker's vetoes. He reduced from $460 million to $30 million the statutory minimum, the amount available for credits for typically smaller companies developing and exploring on the North Slope and Cook Inlet. That doesn't erase the obligation but pushes it forward. Next year's obligation, with more than $700 million pushed forward from this year, could be about $1.2 billion, state tax division director Ken Alper said.

Sen. Bill Wielechowski, D-Anchorage, said Walker's action on the dividend could face a court challenge, potentially from Wielechowski, if the veto reducing dividend funding isn't overridden.

House Speaker Mike Chenault, R-Nikiski, said he wasn't sure what appetite there might be for any veto override attempts.

Lawmakers have struggled in trying to craft a fiscal plan, with deep philosophical divides and legislators leery to support tax increases for one industry not knowing if increases on any other industries would pass.

Minority Democrats want to see changes to state oil tax policy and do not want the permanent fund bill, which would change how dividends are calculated, to be the first or only option. There's been little interest in the House or Senate on a proposed personal income tax or various industry tax increases, and Republican legislative leaders have balked at a new fight over oil taxes.

Chenault said he would like to see votes on some of the bills that will be before lawmakers.

"It may not be the action that anyone particularly likes, whether it passes or whether it fails, but we've taken the action that I guess voters sent us down here for, for the most part," he said.


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