Alaska’s Legislature is on pace to pass fewer bills than in any other session in the state’s history. And it’s not clear whether lawmakers will be able to agree on a plan to fix the state’s budget for the future.
The Legislature passed 10 bills in the first 87 days of the session. Even if the pace picks up, it will likely remain well below the 39 bills passed in 2011 – which is the fewest in any year since statehood.
Lawmakers haven’t passed the annual budget or bills to draw from the Permanent Fund for the budget or to raise taxes.
Senate President Pete Kelly said the Senate is willing to stay beyond the scheduled end of the session on Sunday to work on bills related to the long-term budget, or that are time-sensitive or critical. He said the focus on the budget has led to the low number of bills passing.
“We’re trying to concentrate on this fiscal issue that faces us,” Kelly said. “I think that’s the short and long of it.”
The House passed on Wednesday its version of the bill to reduce Permanent Fund dividends and draw money from fund earnings. The bill wouldn’t go into effect until the Legislature reintroduces an income tax and raises oil and gas taxes.
Nome Democratic Rep. Neal Foster said the combination of bills is needed.
“The public wants a long-term sustainable plan – and this gets us a long-term sustainable fiscal plan,” Foster said.
There are several issues that separate the two chambers. The Senate majority doesn’t want an income tax. The House majority is seeking higher PFDs than the Senate. Senators are interested in eliminating some oil and gas tax credits, but they don’t want the House’s increase to the industry’s taxes. The Senate is seeking to lower the state limit on spending. The House isn’t.
And the Senate budget would spend nearly $230 million less than the House budget.
Kelly said the Senate passed the bills the majority promised. He said he understands why the larger body has been slower.
“We said we were going to do A, B, C and D, and we did A, B, C and D, and then we sent it over to them,” Kelly said. “And we worked rather quickly. Now, by the way, it isn’t a fair comparison to call the House slow or anything like that. They have 40 people – it’s a whole different ballgame than we’re dealing with. The Senate can be and is more nimble.”
House members say new taxes are needed to close the $2.7 billion gap between what the state government spends and what it raises. They also said the Senate plan balances the budget on the backs of those least able to afford it.
Homer Republican Rep. Paul Seaton said drawing from the Permanent Fund should only be one piece of a plan.
“The other two components were a broad-based tax, which we all know that we need unless we were to go into severe cut mode and send ourselves into a 10-year recession,” Seaton said. “And the third component of that was the oil and gas tax.”
Senators say lower spending and an improved revenue outlook mean the state can balance the budget without an income tax.
Eagle River Republican Sen. Anna MacKinnon said she doesn’t want to hurt the private sector.
“I just have personally a hard time in asking Alaskans to pay an income tax, when they’re paying a federal tax and then turning around and handing out Permanent Fund checks,” MacKinnon said.
Kelly wrote in a letter to the House Speaker on Wednesday that the Senate majority wants to focus on a limited number of bills, other than the budget and Permanent Fund measures. Budget-related bills include a motor-fuel tax, freezing state worker pay, and changes to education. Other bills would make driver’s licenses comply with the federal REAL ID Act, amend last year’s criminal justice overhaul, and address the opioid crisis.
Lawmakers plan to work through the weekend, although some of their aides will leave Juneau. The Alaska Constitution mandates that the session must end by May 17.