House rejects compromise

In a bid to avoid a state-spanning government shutdown, Gov. Bill Walker on Monday proposed a compromise to bring the Alaska Senate and Alaska House together.

Walker’s compromise was promptly rejected by the coalition majority that runs the House.

That leaves the state on course for a July 3 shutdown that would paralyze state services and multibillion-dollar commercial salmon industry.

In an evening press conference, Speaker of the House Bryce Edgmon, D-Dillingham, said the governor is on the wrong track with a proposal that would slash the state deficit from about $2.7 billion per year to about $300 million per year. He said the House Majority is continuing to champion a strategy that eliminates the entire deficit within three years.

Unless the deficit is entirely eliminated, Edgmon said, Alaskans will continue to worry about how it will be balanced and what will need to be cut to make the budget balance.

“If we don’t do it right this session, we’re going to be back next session with the same scenario that’s before us now, and that’s clearly not acceptable to Alaskans at large and that’s not acceptable to us, because we were elected to make tough decisions,” Edgmon said.

He further added that the threat of federal budget cuts proposed by President Donald Trump add to the urgency of solving the state’s budget crisis.

Legislative inaction, combined with federal cuts, means “Alaska could be in for a tremendous double-whammy going forward,” Edgmon said.

In separate meetings with the House Majority, House Minority, Senate Majority and Senate Minority, Walker proposed using the Senate version of Senate Bill 26, which spends a portion of the Alaska Permanent Fund’s earnings on state services and cuts the Permanent Fund Dividend to $1,000.

In compensation, Walker favored the House’s version of the state operating budget, which includes fewer cuts than the Senate version.

Walker’s proposal also included a hike in the state gasoline tax, a slightly modified Senate version of House Bill 111 (which cuts subsidies for oil and gas drilling), and the governor’s own version of the capital construction budget, in addition to $288 million the Senate advocated in back payments to oil and gas drillers.

Walker also proposed advancing Senate Bill 12, a school tax proposed by Sen. Click Bishop, R-Fairbanks. That measure was proposed at the start of the regular legislative session but has not been heard.

Outside the State Office Building, Carrie Hughes-Skandjis was gathering signatures for a petition urging the Alaska Senate to act on the budget.

“It’s like must-see TV this afternoon,” Hughes-Skandjis said of the governor’s presentation, which wasn’t actually on TV.

The presentation was supposed to be an informal one, with the governor and a handful of state executives talking to legislators in small groups, privately. Some lawmakers attended in person, while others viewed the conference from Legislative Information Offices across the state.

It remained closed to the public and media, with even details of Walker’s proposal withheld, until Rep. Lora Reinbold, R-Eagle River, posted a copy on Facebook.

Reinbold, a member of the Republican House Minority, joined the majority in rejecting Walker’s plan.

“Do you see any budget cuts in his so-called compromise?” she asked on Facebook.

House Minority Leader Charisse Millett, R-Anchorage, declined to comment on the governor’s presentation Monday, as did members of the Senate Majority and the Senate Minority.

With the House Majority’s rejection of Walker’s mediation bid, it isn’t clear how the Legislature will reach a deal to avert a government shutdown.

The Senate Majority has proposed a fiscal plan that the House Majority rejects because it ─ like Walker’s proposal ─ does not fully solve the deficit and would overly crimp future spending, House Majority members have said.

Asked where the House’s rejection leaves negotiations, Edgmon said, “It would be my hope that we can continue to negotiate.”

He believes that the Legislature can act quickly when it wants to, and as a shutdown approaches, it will want to.

“If the intensity factor has to be ratcheted up, as it is by the day here, that’s where we’re going to find ourselves,” Edgmon said.

That rising tension will also weigh on the state’s more than 15,000 employees, who were notified June 1 that they will be laid off, at least temporarily, if the state shuts down.

Hughes-Skandjis, collecting signatures outside the State Office Building, was affixing them to an enormous “pink slip” targeted not at public employees but at members of the Alaska Senate.

“What we’re looking for is a comprehensive fiscal plan,” said Jim Duncan, executive director of ASEA/AFSCME Local 52, the union organizing the petition campaign.

Kayla Wisner was among the state employees who used a portion of her lunch break to sign the pink slip offered by Hughes-Skandjis.

She and her husband each work two jobs, she said, and they need their work to pay for child care, schooling, and their home — “everything, really,” she said.

“The idea of losing my job is really scary,” she said. “I really hope (the shutdown) doesn’t come to pass, because I love my job.”

Just in case, she’s already begun looking for another job.

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