Second Special Legislative Session called, no budget compromise in sight for Alaskans

Today Governor Walker called a second special legislative session after the first special session ended without the passage of an operating budget.

If the Legislature does not pass an operating budget by June 30, the government will shut down and thousands of employees will be temporarily laid off.

“To ensure government services will continue after July 1, I am calling the legislature back in—initially, to focus on the operating budget,” Governor Walker said. “Compromise is required to protect Alaskans, our economy, and our future.”

Yesterday, the House passed a combined Capital and Operating Budget with a 22-18 vote. Their budget reversed the Senate’s $69 million cut to education and restored the full amount of expected Permanent Fund Dividends. The bill was sent over to the Senate, and the House ended the First Special Session.

Speaker of the House Rep. Bryce Edgmon issued this statement:

Our actions tonight were not taken lightly. We simply had to remove the threat of a government shutdown from over the heads of Alaskans and our already struggling economy. We negotiated in good faith for a comprehensive and evenhanded fiscal plan, but the Senate Majority refused to consider anything other than their plan to cut Permanent Fund Dividends. Such a plan is simply unfair and places the sole burden of filling the over $2 billion budget gap on every man, woman, and child in Alaska without balanced contributions from the oil industry or the thousands of out-of-state workers.

Governor Walker expressed his disappointment as the July 1 deadline approaches. “We were surprised by the House Majority’s actions tonight. They did not get the job done for Alaska. A compromise is required to protect Alaskans and put the state on a stable fiscal path.”

Senate President Pete Kelly released the following statement yesterday:

We are deeply disappointed in the House Majority’s actions tonight.

In one fell swoop, the House Majority’s $12.1 billion budget plunders one-third of the Permanent Fund earnings reserve, forcing the fund’s managers to sell off high-earning assets in exchange for a quick political ‘fix’ that solves nothing. This is the same fund that pays out dividends to Alaskans.

Contrary to the House Majority’s rhetoric, their budget and adjournment tonight does not avert a government shutdown, but forces the Legislature into an additional special session that adds costs, grows uncertainty for the public and private sectors, and further hampers the ability of the two bodies to reach a compromise.

Alaskans should know tonight’s decision was unnecessary, and unprecedented. For weeks, the Senate urged the House Majority to negotiate a budget. The House Majority walked away from negotiations last week – then canceled four public negotiation sessions this week, while leading the Senate to believe they remained interested in a compromise. As late as Thursday at 6 pm, Senate leaders were still reaching out to the House Majority in hopes of reconciling the two bodies’ differences.

Tonight’s House floor action was a betrayal of many conversations between the two bodies in an attempt to compromise.

Time allowed for a compromise with the Senate on this budget. The House and Senate could have reached an accord at any time tomorrow – the last day of special session – and passed a budget, together, for all Alaska. Instead, the House Majority chose to reject compromise, placing the state at risk for a government shutdown.

The Senate Majority will be responsible with Alaska’s reserves, and will not support this budget that jeopardizes the financial future of our state. We remain committed to a fully funded FY18 operating budget in sufficient time to avoid a government shutdown.