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Legislative leaders meet with governor on budget; Senate wants agreement on size, projects

Posted: April 18, 2011 - 8:30pm

JUNEAU — Leaders of the Alaska Senate met with Gov. Sean Parnell Monday in hopes of breaching a budget impasse that has sent the Legislature into special session. But they didn’t get the assurances they wanted.

Senate Finance Committee co-chairmen Lyman Hoffman and Bert Stedman are seeking a top-line spending limit from Parnell. They also want agreement on energy projects.

“The sooner that happens,” said Hoffman, D-Bethel, “the quicker we get to adjourn.”

Parnell set a $2.8 billion spending limit, but that was contingent upon passage of a bill to address oil taxes. He threatened to cut the budget if a bill stalled, which it did in the Senate.

His threat prompted the committee to put contingency language of its own into its version of the capital budget that makes a $465 million energy package an all-or-nothing deal and ties $100 million worth of the governor’s projects to the price of oil.

That language has been the main obstacle to the Senate and House coming to terms on the budget — and a critical factor in the Legislature going into special session Monday. Stedman suggested it could go away if Parnell agrees to a spending limit and allows for specific projects.

Parnell said Monday those parameters still held and he called on the Senate to send the House a capital budget to work on. He said it’s “pretty arrogant” for a committee co-chair to believe a budget proposal he’s put together will be held “sacrosanct.” He said he told Stedman he wasn’t ready to review projects — to give his approval or not — and told him instead to work through the legislative process.

That process calls for the Senate to ship the House a capital budget while holding open the conference committee on the operating budget. That means neither chamber can adjourn without the other.

Parnell also met with House leadership Monday and said he was meeting with other lawmakers, as well.

Both chambers, unable to agree on an adjournment date, took the rare step of asking Parnell late Sunday to immediately end the regular session and call them back to take care of unresolved issues. Sunday marked the session’s 90th day, and the House’s Republican majority wanted to honor that time limit set out in law following a 2006 voter initiative. Senate leaders, meanwhile, were willing to keep working under the 121 days allowed by the constitution.

Parnell limited the special session to 10 bills, at least two of which were done away with Monday by simple concurrence. Others include state spending plans for this year and next, a bill giving the Alaska Energy Authority powers to pursue the Susitna hydroelectric project, coastal management and one of Parnell’s top priorities, a merit scholarship plan.

While lawmakers must focus on those issues alone during the special session, which could run up to 30 days, the only bill they’re actually obligated to pass is a budget to fund state government for the next fiscal year.

The House has been reluctant to finalize terms of the operating budget without the Senate first sending it a capital budget to work on. Stedman, meanwhile, refused to advance the capital budget from his committee without first getting an agreement from the House on its size and structure.

Hoffman and Stedman want to dispense of the operating budget first.

Stedman said he believes the session could be finished in less than a week if the Senate can come to terms with Parnell and the House. But Rep. Bill Thomas, the Republican chairman of the conference committee, said it could run into next week, at least, depending on when the House gets the capital budget.

The House’s GOP leadership has been clear in saying it wants time to thoroughly vet the proposal and to hold public hearings before voting on it. Thomas said that process alone could last three days or more.

One issue that may not get settled: scholarships. Stedman, who has raised concerns about the program, including whether students would have equal access to scholarships, reiterated his lack of interest in advancing the bill.

The legislation, passed by the House, establishes a long-term funding source but comes with no funding. Parnell wanted a $400-million set aside from which the earnings would be used to pay for scholarships. But lawmakers have been reluctant — if not outright opposed — to doing that, citing future fiscal uncertainties.

House and Senate negotiators are trying to come to terms on how much to fund the program for this coming year. Parnell wanted $8.2 million. The House offered $8 million. The Senate settled on $1.1 million after swapping Parnell’s proposed scholarship amount with the amount he put toward a program for students with unmet financial needs.

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