Alaska Legislature adjourns with work still to do, called back by Gov. Walker

JUNEAU — Alaska lawmakers failed Wednesday to broker a last-minute deal on the state budget or oil taxes and adjourned their regular session after 121 days — leaving a spending plan and deficit-reduction legislation for a special session called immediately by Gov. Bill Walker for Monday in Juneau.

"Feel a little defeated and unfortunate, because Alaskans are the ones that are really going to suffer if we don't get a budget passed," House Majority Leader Charisse Millett, R-Anchorage, said at a news conference midnight Thursday just after her chamber gaveled out.

Wednesday was the 121st day of the regular legislative session — the last day allowed under a constitutional limit and already 31 days past a softer deadline set in a 2006 citizens initiative.

Because the 90-day limit is a law, and the Legislature writes the laws, it was able to work through that deadline with barely a bump.

Lawmakers could have extended past 121 days with a two-thirds majority vote of the membership of each chamber.

But the House's bid to do so failed by one vote at 9 p.m. Wednesday, 26-12. The Senate subsequently voted 16-3 to extend the session, but after waiting for the House to change its mind, senators reversed themselves and gaveled out just before midnight, followed shortly by their counterparts in the House.

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The House's initial decision to stop at 121 days came along caucus lines, with all 12 Democratic minority members opposed and all 25 members of the Republican-led House majority, plus Rep. Lora Reinbold, R-Eagle River, voting to continue.

Retiring majority member Rep. Mike Hawker, R-Anchorage, who's undergoing cancer treatment, and minority member Rep. Matt Claman, D-Anchorage, were absent.

The vote came after negotiations between the House majority and minority that failed to produce a budget deal that could earn the support of three-fourths of the chamber — the minimum threshold required to access an $8 billion savings account, the Constitutional Budget Reserve, to cover the state's multi-billion dollar budget deficit.

The Senate's Republican-led majority, with 16 members in the 20-member chamber, was left on the sidelines, waiting to vote on a proposal from the House that never emerged.

Two competing oil tax reform bills passed by the House and Senate — transformed from legislation originally proposed by Walker — also died Wednesday night, with differences between the two versions leaving the two chambers at an impasse.

A vote to accept the Senate's version failed in the House, 14-24, with the Democratic-led minority all in opposition and enough Republicans also opposed to seal the defeat.

Without a vote to extend, and without a budget, Walker immediately signed a proclamation just after midnight that calls lawmakers back into a special session, set for Monday at 11 a.m.

The governor gets to set the agenda; all the other legislation that was still in limbo in the House and Senate is now dead.

On Walker's call were all the major planks in the deficit-reduction package he introduced in January to help close the state's budget gap — plus a few extra.

They include operating and capital budget bills; a bill to restructure the Permanent Fund to help pay for state government; a bill to reform the state's oil tax regime; and a new bill that would combine several separate bills by Walker to institute a personal income tax and increase taxes on consumption and natural resource extraction.

[Advocates outraged at last-minute proposal from Legislature to slash $13 million from schools funding]

Walker's call also includes legislation related to foster care, to providing health insurance for the surviving family members of law enforcement officers killed in the line of duty, and to reforming the state's insurance markets.

The Legislature's failure to produce a budget means that state workers are still set to receive layoff warnings in early June, with actual layoffs and a government shutdown looming July 1, the start of the state's next fiscal year.

Chenault said he'd hoped to avoid the mailing of those notices, which were sent last year during a similar budget impasse.

"It's just not good on morale," he said.

While the House majority was negotiating with minority Democrats earlier in the day in an attempt to get their approval for a funded budget, Chenault had remained optimistic, telling reporters: "I think we can get there if we just continue to negotiate."

Lawmakers still have two weeks to agree on a budget before the layoff warnings are mailed. But those negotiations will have to occur in a special session.