Alaska House and Senate dig in deeper in overtime as governor offers help

JUNEAU — The two sides in the Alaska Legislature's budget war have started their first week of legislative overtime with loud public sniping instead of behind-the-scenes negotiations to push toward an adjournment deal.

Leaders in the largely Democratic House majority held a news conference Tuesday where they declared themselves unwilling to make concessions on their deficit-reduction plan, which includes a restructured Permanent Fund, an income tax and higher oil taxes.

Instead, they said, they're holding out for the Republican-led Senate to come around to the wisdom of their ideas.

"We're waiting for the Senate to learn how all these components fit together in a very comprehensive plan that doesn't burden one group of people over another group of people — and doesn't drain our savings down to nothing," said House majority leader Rep. Chris Tuck, D-Anchorage. "They're a little bit slow on the take, so we're giving them time to get caught up."

Anchorage Rep. Gabrielle LeDoux, one of three Republicans in the House leadership, then stepped up to the podium from her seat in the audience to warn Senate leaders that if they think they can leave Juneau with a restructured Permanent Fund and no other deficit-reduction measures, "they've got another thing coming."

Senate President Pete Kelly, R-Fairbanks, meanwhile, took to Facebook to blast the House's "left-leaning majority" for its "whopping income tax bill" that he said would set up an "Alaskan-style IRS."

"They're coming for your money because they want to grow government at the expense of working Alaskans," said Kelly.

He subsequently invited reporters to his office for an afternoon briefing where he said House leaders were "shadowboxing."

"We're doing the job. We're going to continue to do the job," Kelly said. "What they say is interesting, but not relevant to us right now."

Senate Republicans are proposing to restructure the Permanent Fund in combination with substantial budget cuts — including to schools and the state university system — to reduce the deficit without using taxes, though their plan would leave a deficit of hundreds of million dollars next year.

Gov. Bill Walker is also pushing for a broad-based tax like the one the House is proposing, but he isn't taking sides — yet.

Walker convened his own news conference Tuesday to volunteer the Alaska Governor's Mansion as a sort of demilitarized zone, saying he invited both House and Senate leaders for a meeting there Wednesday "to pull this together."

Asked if he thought a simple meeting would be enough to spur a compromise between the two sides, Walker responded: "Well, I know that not doing that won't advance it. Me sitting back doing nothing is not an option either."

The dueling statements and public posturing had legislative veterans making bleak predictions about how long it would take for the two sides to be prodded into a deal.

A trio of veteran lobbyists, gathered a floor below Walker's news conference, gave predictions ranging from "a couple of months" to the end of June.

"We're out by the end of July — God bless America," one said.

But another longtime participant, Sen. Bill Wielechowski, D-Anchorage, described the current standoff as essentially no different than in prior years.

"The pieces are in place," he said, for the two majorities to reach a deficit-reduction deal when they're ready.

Both sides support a restructured Permanent Fund, which they're counting on to fill the bulk of Alaska's deficit of more than $2.5 billion. They're split on the income tax legislation and on raising taxes on oil companies, but they also both appear willing to consider the elimination of cash subsidies for North Slope oil companies.

The income tax could be replaced by a different proposal more palatable to the Senate majority, like a statewide sales tax or an increase to Alaska's gasoline tax, Wielechowski said.

"I think it'll probably get a little bit worse before it gets better. It'll be a challenge to get out. But really, when you look at it — and I'm not saying I agree with the plans that are out there — they're not too far apart, actually," said Wielechowski, a member of the Senate Democratic minority. "I think it's just going to be time. That's what always happens."

Sunday, the 90th day of the session, was the Legislature's original deadline for adjournment as set by a 2006 citizens initiative. It can simply continue past that deadline, however, since it's a law and the Legislature writes its own laws.

The next major deadline for lawmakers is May 17, the 121st day of session and the last one allowed under the state Constitution. If there's no budget deal by then, the Legislature will face a June 30 deadline to avert a government shutdown.