Legislature will keep working after 90th day

It lay discarded on the Capitol’s second-floor carpet, a fortune cookie slip with a simple message: “Now is the time for peace in your life. Go along with others’ ideas.”

It was discarded for a reason.

With lawmakers deadlocked on the issue of subsidies for oil and gas drillers, there was no last-minute deal to fill Alaska’s $4.1 billion budget deficit and end the 29th Alaska Legislature on time.

In fact, Legislators worked past 3 a.m. Monday morning on everything but significant revenue measures, clearing the decks for a week of overtime devoted to spending cuts and new revenue.

“We’re going to stay here probably until the end of the week,” said Rep. Cathy Muñoz. “And after that, well, it depends on how much we get done. If we get the Permanent Fund bill and the oil and gas credit, that might be enough to satisfy the governor, hopefully.”

Muñoz said she also believes an increase in the state gasoline tax is likely, and an increase in the mining tax is possible, but she rules out an increase in the fisheries tax (too complicated) and in the tax covering cruise ships (there are legal issues).

The issue of cutting oil and gas tax credits, a subsidy to the industry expected to reach as high as $775 million in the next fiscal year, is deeply dividing the House, and an agreement on those credits is seen as key to unlocking other votes necessary to deal with the deficit.

On the Legislature’s calendar for Monday, the 91st day, are negotiations over the state’s operating budget and a hearing on criminal justice reform, as well as the oil and gas tax credits issue and variations of a plan to spend the earnings reserve of the Alaska Permanent Fund for state operations.

On the 90th day, however, legislators spent hours clearing their calendars. The House debated for an hour, for example, on a single bill creating specialty license plates. Four amendments were considered, and one adopted, before Senate Bill 154 was accepted.

There were bills about hairdressers and barbers, a bill about texting while driving, a bill exempting yoga schools from regulation, and a bill requiring schools to have recess.

There were some measures with significant fiscal impact, too.

Senate Bill 74, the Medicaid reform bill, received its final legislative approval. That measure promises $31.7 million in savings during the fiscal year that starts July 1, with the savings rising in subsequent years as more aspects of the bill become effective.

“This legislation is an example of the great things we can accomplish as a state when we pull together as Alaskans to do what’s right for Alaska,” Gov. Bill Walker said in a prepared statement about the bill.

House Bill 137, meanwhile, contains the state’s first increases to some hunting and fishing license fees in 24 years. According to documents provided by the Alaska Department of Fish and Game and the office of Rep. David Talerico, R-Healy, the bill could raise about $8 million more per year from tag and license sales. The bill heads to the governor for his signature.

There’s also House Bill 373, which sells some of the state’s royalty oil to Tesoro Corporation, an act expected to bring between $45 million and $56.5 million more to the state over the next five years.

All of those increases combined, however, are crumbs compared to the $4.1 billion deficit dominating conversation in the Capitol and across the state.

The Legislature will continue to work on the deficit in the coming week, starting with a 10 a.m. Senate Finance Committee meeting, but after the gavel fell at 3 a.m., there was an obvious answer when a lawmaker was asked what the next step is.

“Sleep,” said Rep. David Guttenberg, D-Fairbanks.

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