State Senate leaders depart the House Speaker’s office following a long meeting between members of both chambers Saturday afternoon that failed to resolve budget differences with only four days left until the scheduled adjournment of the legislative session. Leaders with both chambers have said there’s a strong likelihood of a special session, but a breakthrough on some key items late Monday may allow legislators to finish in time on Wednesday if they work at a whirlwind pace. (Mark Sabbatini / Juneau Empire)

State Senate leaders depart the House Speaker’s office following a long meeting between members of both chambers Saturday afternoon that failed to resolve budget differences with only four days left until the scheduled adjournment of the legislative session. Leaders with both chambers have said there’s a strong likelihood of a special session, but a breakthrough on some key items late Monday may allow legislators to finish in time on Wednesday if they work at a whirlwind pace. (Mark Sabbatini / Juneau Empire)

‘It’s the weirdest session I’ve ever seen’: Odds for special session fluctuating drastically

Accusations by House and Senate leaders lead to late pacts as Legislature tries to adjourn on time

This story originally published Saturday, has been updated with additional developments as of Monday.

The Alaska Legislature is heading into a whirlwind of chaos on the final day of the session Wednesday which, while common at the Capitol, features novel drama this year. Late-night maneuverings Monday may allow what a longtime lawmaker called the “weirdest session” he’s seen to adjourn on time instead of going to a special session many presumed was a certainty.

The House and Senate appeared hopelessly divided Monday afternoon over the amount of Permanent Fund dividend due to its impact on next year’s state budget, and accusations of disrespectful and unresponsive behavior were expressed by the leaders of both chambers. But reports of a compromise PFD discussion early Monday evening were followed by House committee actions clearing the way for an education funding increase that’s a top-priority for the Senate majority and a carbon credits bill that’s a top priority for Gov. Mike Dunleavy.

“To get what we want we’re all having to, you know, work a little hard to give a little bit,” said Rep. Neal Foster, a Nome Democrat who co-chairs the House Finance Committee, which met until about 10 p.m. Monday night to consider the education, carbon and other bills. “Everybody’s taking, but they also have to be getting.”

Foster said yesterday “I would probably say odds are that we’re probably going to a special session,” but as of Monday night he called it a 50-50 split.

“It sounds like folks are really wanting to try to wrap this up,” he said. “This is an opportunity. We’re down to the wire if it’s going to be done.”

The tone was markedly different on Saturday following closed-door meetings between House and Senate leaders, with House Speaker Cathy Tilton stating her caucus felt they were being cut out of the budget process and Senate President Gary Stevens saying there didn’t appear to be time to meet the House’s negotiating demands before Wednesday’s adjournment.

“It’s never been as awkward, never as weird as this. It’s the weirdest session I’ve ever seen,” Stevens, a Kodiak Republican first elected to the Legislature in 2001, told reporters Saturday. He added the caveat that disruptions to in-person business caused by the COVID-19 pandemic might be an exception.

That tone persisted through another closed-door meeting Monday afternoon, with Stevens saying slight progress had been made that he declined to specify.

It appears there are several parts that need to come together for the Legislature to adjourn by the constitutionally mandated deadline of 11:59:59 p.m. Wednesday:

— The budget is the one thing the Legislature is required to pass, and the Senate is scheduled to vote Tuesday on a $6.2 billion budget bill that as of Monday increases education funding, contains about $350 million in capital spending, provides a $1,300 PFD and incurs no deficit — although changes are possible before passage. At that point the House almost certainly will face a take-it-or-leave it vote on the budget bill Wednesday, which is likely to fail unless remaining differences are resolved.

— The biggest dispute is the PFD, with the House proposing a $2,700 dividend that would also result in a budget deficit of about $600 million. The Senate majority and House minority have said they are not willing to support tapping into reserve funds to pay for the larger dividend. However, Tilton acknowledged a compromise $2,000 PFD is among the various proposals leaders of both chambers discussed Monday afternoon. That would still result in a deficit of roughly $150 million to $200 million.

— A move that might allow lawmakers to declare they’ve paved the way for a new and sustained source of revenue occurred late Monday when the Senate passed Dunleavy’s carbon credits bill and the House Finance Committee met to consider it hours later. A Department of Revenue study says nearly $5 million from a pilot program is possible as soon as the coming fiscal year which, even if tiny compared to a budget deficit, could be a starting point for bill supporters who say the state could earn hundreds of millions annually within a few years. Foster said the hope is the House can vote on the bill by Wednesday, leaving time for the Senate to concur with any changes made before then by the House Finance Committee. “This is a governor’s priority. We are trying to work with the governor,” Foster said.

— Another committee move toward reconciliation occurred when the entire content of a Base Student Allocation (BSA) bill that passed the Senate last Thursday was pasted into a bill dealing with broadband funding grants for schools. The BSA provisions in Senate Bill 52 — which includes a $680 per-student increase (11%), $5 million for student transportation and various accountability measures — were added as amendments into SB 140. A further amendment by a member of the majority proposed doubling the total increase of $1,360 — essentially matching the high-end amount sought by education advocates at the beginning of the session— but Foster put the bill on hold until Tuesday “to let cooler heads prevail.”

— Legislators could also in theory cut more than $150 million from the $357 million in capital spending and still meet the “bare bones” minimum needed to qualify for all federal matching grants awarded to listed projects, although Senate leaders have expressed strong support for the additional state funding.

If the House and Senate fail to resolve their differences before the end of the regulation session the Legislature can either vote for a 10-day extension, which leaders said is unlikely, or Dunleavy can call a 30-day special session. The special session can begin immediately or on a specific date, but a final budget needs to be signed into law before the fiscal year begins July 1 to avoid a state government shutdown.

The Senate’s budget contains a recently added $40 million to cover the anticipated costs of a shutdown. Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee and has gone through several special sessions, said his experience is there’s typically little movement during most of a special session and differing parties thus find themselves in the same position when the final few days arrive.

• Contact reporter Mark Sabbatini at mark.sabbatini@juneauempire.com

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