Lawmakers jockey on last weekend

'There's still a lot of negotiating going on,' says House Speaker

Posted: Sunday, April 18, 2010

JUNEAU - Lawmakers jockeyed to finish bills - and in some cases, save them - as the session neared its scheduled close on Sunday.

The bills included a proposed reduction on a cruise ship passenger tax, a hoped-for compromise with Gov. Sean Parnell on student scholarships, a much-talked-about change in the state's system of taxing oil and gas production together and a roughly $3 billion capital budget that Parnell has indicated he's willing to cut.

There's a lot riding on the outcome of the session. This is a political year, in which most legislative are seats up for grabs and Parnell hopes to win outright the office he inherited last summer when Sarah Palin resigned.

Parnell's legislative agenda - education, family and pocketbook issues - has provided the core for his stump speech. Lawmakers also don't want to go home empty-handed.

"There's still a lot of negotiating going on," House Speaker Mike Chenault said brusquely before pulling aside Senate President Gary Stevens and walking into a popular outdoor smoking area.

Throughout the day, legislators, lobbyists, lawyers and administration officials shuffled between the second and fifth floors, favoring the stairwell for hushed talks to more coveted elevator rides.

The House and Senate meet on the second floor. The governor's office is on the third; his spokeswoman said he'd been meeting with senior staff throughout the day. The powerful House and Senate finance committees are on the fifth.

Among the pending issues late Saturday: the proposed cruise passenger tax reduction.

Parnell's proposed rollback from $46 a person to $34.50 and allowing deeper offsets for ships stopping in at least one of two ports, Juneau and Ketchikan, is aimed at bringing more ships back to Alaska and settling a federal lawsuit over the state head tax.

But the settlement agreement signed by the attorney general and president of the Alaska Cruise Association hinges on lawmakers passing and the governor signing the tax cut this year.

And changes the House Finance Committee made early Saturday morning to the Senate bill - involving the divvying-up of passenger tax proceeds among ports of call, an issue that has nothing to do with the agreement - threatened to sink the legislation.

Some lawmakers believe the state has a strong case in court. They doubt that it's the tax - and not the recession - responsible for what's expected to be fewer ships this season. The lawmakers also question whether the settlement will truly bring in more ships and tourists.

A new version of a scholarship plan emerged Saturday, seemingly aimed at salvaging a fragile compromise with Parnell. The governor had said he'd consider calling a special session to settle the scholarship debate.

But some lawmakers - including among the minority House Democrats - felt a compromise unveiled Friday wasn't money well spent and didn't go far enough to address students in need. Merit scholarships are a key piece of Parnell's agenda.

But Chenault said he didn't know why the Senate came up with the apparent backup plan.

The House had yet to vote on whether to separate oil and gas production for taxation, one of the highest-profile issues of the session.

Sen. Bert Stedman, the finance committee co-chair, has led those warning of a possible "dilution effect" on revenues when oil prices are high relative to gas - a drag that could cost the state up to $2 billion a year or more in revenue once gas starts flowing through a major line. That's due to the way the state's current tax scheme is structured.

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