Governor Walker Calls Legislature into Special Session to Fix Alaska’s Fiscal Crisis
May 18, 2017
“I thank members of the House and Senate for taking positive steps toward solving Alaska’s fiscal challenges,” Governor Walker said. “However, the work is not done." Walker said, "Our state cannot afford to continue drawing down savings to pay for schools, roads, and public safety. Alaskans deserve a complete fiscal plan that puts an end to the economic uncertainty we have been facing. It is for those reasons that I am calling the legislature into special session, and urge everyone to work toward compromise to fix the crisis now.” The First Regular Session of the 30th Alaska State Legislature ended Wednesday night with clear differences between the Alaska House Majority Coalition and the Alaska Senate Majority on the need for a comprehensive fiscal plan to address the ongoing recession and the $2.7 billion budget gap. Both majority organizations wanted the ten-day extension allowed for in the Alaska Constitution, but the House Republican Caucus refused to provide enough votes in favor. In response, Governor Bill Walker called the Alaska Legislature into a Special Session to start Thursday. Quoting a news release, the Alaska Senate stated they delivered a responsible operating budget and a sustainable fiscal solution while protecting working Alaskans from an income tax, all key priorities in a year with serious fiscal challenges. But without a compromise with the House at the 121-day constitutional session limit, the Senate must adjourn. Members are committed to working diligently in a special session to address these critical fiscal issues facing Alaska. “We are required to deliver an operating budget and Alaskans deserve a fiscal solution – the Senate has delivered on both counts,” said Senate President Pete Kelly (R-Fairbanks). “The House has insisted on demands that are not in the best interest of Alaska. We’ll stay as long as necessary to secure the right solution for Alaskans, and encourage the Governor to call a special session to narrow the focus to solving the fiscal problem.” Quoting a news release, the Alaska State Senate executed promptly this session, delivering a fiscal solution in mid-March and a responsible operating budget in early April. Senate committees cleared the deck of individual priorities by day 90, focusing on key fiscal issues. They say the Alaska House delayed appointment of conference committees to resolve the differences among the two bodies, focusing instead on non-priority and personal legislation. “The primary objective of our Senate Majority, clearly stated prior to session, was to construct a fiscal solution without political complications associated with issues of individual interest,” said Majority Leader Sen. Peter Micciche (R-Soldotna). “Both sides must set aside ultimatums and find an acceptable compromise that best serves Alaskans. I’m confident we will reach an accord in time to ensure quality, constitutionally-required services continue, without interruption.” The Alaska Senate’s fiscal solution calls for a spending cap to limit future government growth, uses Permanent Fund earnings to help pay for government and a dividend and makes about $200 million in operating budget reductions. The Senate protected working Alaskans from an income tax proposed by the House Democrats. And, the Senate concurred with the House and Governor in eliminating cash payments for tax credits to the oil industry, a move that will save the state up to $200 million per year. Quoting a news release, the Alaska House Majority Coalition stated they are committed to a comprehensive fiscal plan for Alaska that is fair across all income levels with contributions from every region of the state and every segment of the economy. Such a plan must include the appropriate use of earning from the Alaska Permanent Fund while protecting the PFD. It is also necessary to reform Alaska’s unsustainable system of subsidizing the oil industry with tax credits. Any truly complete fiscal plan must also include a broad based revenue measure to fully eliminate the budget deficit. “After three years of significant budget cuts and having spent more than $13 billion of our accessible savings, it is time to put the fiscal crisis behind us once and for all,” said Speaker of the House Rep. Bryce Edgmon (D-Dillingham). “Finding consensus on a solution was never going to be easy, but we have come a long way from last year, when the House majority couldn’t find the resolve to pass a fiscal plan. Our Coalition passed a comprehensive fiscal plan in the regular session, and I am confident we can find agreement with the Senate on measures put forward by the Governor in the upcoming special session.” Governor Walker called the special session to start this morning with a limited agenda of bills to consider including the FY 2018 budgets, the Permanent Fund Protection Act, oil tax credit reform, a broad-based tax, and other priority bills. “Thankfully the Senate Majority has come around to the House’s position that we can no longer be paying the oil industry cash for their tax credits. That’s a start, but there is a lot of work still to be done to reform our oil tax system. We cannot sell out our future,” said House Majority Leader Rep. Chris Tuck (D-Anchorage). “The Senate Majority still needs to reconsider their dangerous proposed cuts to public education, the University of Alaska, and Governor Walker’s special session call includes the following items:
Quoting Governor Walker's news release, "Expert testimony to both houses of the legislature has made clear that any complete plan to solve Alaska’s fiscal crisis must close the budget deficit this year, and include a broad-based revenue measure to connect Alaska’s economy to the services government provides."
Reporting and Editing by Mary Kauffman, SitNews
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