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Big items remain as Alaska lawmakers seek timely session end

April 9, 2018

Three members of the Alaska Senate majority's leadership listen to questions during the majority's weekly news conference on Monday, April 9, 2018, in Juneau, Alaska. Pictured are, from left, Senate Majority Leader Peter Micciche, Senate President Pete Kelly and Senate Finance Committee Co-chair Lyman Hoffman. (AP Photo/Becky Bohrer)

JUNEAU, Alaska (AP) — The Alaska Legislature is in its final week of a scheduled 90-day session, with budgets to complete and questions over what it will take for lawmakers to consider their job finished for the year.

Senate President Pete Kelly said lawmakers possibly could finish “in proximity” to the 90-day mark, which is Sunday, but declined to speculate further. Voters approved a 90-day session limit but the state constitution permits sessions of up to 121 days.

He told reporters Monday that the House and Senate aren’t in the “full-on war” they were last year over differences on issues like taxes and budget cuts.

The sides are at odds over the limited use of earnings from Alaska’s oil-wealth fund to help address the state’s deficit. Part of the debate over use of Alaska Permanent Fund earnings is what happens to the size of the yearly checks paid to Alaskans from fund earnings.

The version of the budget that passed the House and the one being considered in the Senate for the fiscal year starting July 1 set a draw rate from Alaska Permanent Fund earnings to help pay for the budget based on a percentage of the fund’s average market value. They also propose a $1,600 dividend this year — about $1,000 less than what would be paid if the existing calculation in state law were followed.

House Speaker Bryce Edgmon has said there’s insufficient support in the Legislature for what would be considered a full dividend this year.

The Republican-led Senate and Gov. Bill Walker, an independent, have additionally pushed for passage of a state law making a fixed draw rate permanent, seeing that as a critical piece for a fiscal plan.

Senate Finance Committee Co-chair Lyman Hoffman said he would not be a “happy camper” if all that could be achieved this session is an agreed-upon draw in the upcoming budget.

House Finance Committee Co-chair Neal Foster, however, said he would be OK with that if the House’s push for a more comprehensive fiscal plan isn’t successful.

The House majority coalition, composed largely of Democrats, has favored what it sees as a more balanced approach to resolving the deficit, including a broad-based tax and changes to oil and gas taxes, in addition to some use of fund earnings.

The Senate last year rejected an income tax and has maintained that the remaining deficit can be managed with fiscal discipline.

Senate Finance Committee Co-Chair Anna MacKinnon said Monday that it is too late in the session to begin debating oil taxes. Revenue Commissioner Sheldon Fisher also recently said he didn’t think the state should be revisiting oil taxes now.

On an issue important to the House coalition, the Senate has proposed providing funding for schools for the next two fiscal years, with advance funding for the second year contingent on passage of a bill setting a long-term draw rate from permanent fund earnings.

“Would we be willing to forward-fund education and give up on a comprehensive package? I don’t think so,” said House Majority Leader Chris Tuck.

The House coalition has supported giving school districts greater certainty on the level of funding they will receive. But Tuck sees the Senate proposal as an effort to entice his caucus into coming around to the Senate’s way of thinking on a fiscal plan. His caucus “just isn’t there,” he said.

Even if a law is passed setting a long-term draw rate, that doesn’t mean future legislatures will abide by it, he said.

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