State Senate leaders are rejecting the plan the House sent them for funding state employees' labor contracts.
Senate Finance Committee Co-Chairman Sean Parnell said he would not be willing to go along with House Bill 52. The bill calls for funding labor contract increases by making across-the-board cuts throughout most of state government. That would require cuts in programs he doesn't want cut, said Parnell, an Anchorage Republican.
``Frankly, at this point I'm not ready to sacrifice child protection, foster care, troopers and other essential services in order to fund state employee contracts in the manner the House has done,'' he said.
Gov. Tony Knowles' administration also does not like the across-the-board cut method of funding labor contracts.
The bill, which was passed by the House on Sunday, was not read across the Senate floor for introduction Monday, so it has not been referred to any Senate committees.
Although they don't like House Bill 52, Parnell and other Senate Republicans have said they're also not willing to increase general fund spending to pay for the contracts. That would defeat a Republican majority goal to cut $30 million in general fund spending this year -- the last year of a five-year plan to cut $250 million from the general fund budget.
Senate leaders have suggested, instead, a package that provides less than what the Knowles administration negotiated with state workers -- $800 bonuses in the coming fiscal year instead of $1,200 bonuses; 2 percent raises in the 2003 fiscal year instead of 3 percent raises; and smaller increases in health-care spending.
Union leaders and the administration have said state law does not allow the Legislature to interject itself in the negotiating process.
Parnell said if the Legislature doesn't fund the contracts before adjourning, it will have rejected the contracts. Dealing with the issue in a special session might be preferable because the Legislature could focus on that single issue, he said.
However, minority Democrats aren't prepared yet to allow the regular legislative session to end. At least some of the minority's votes are needed for an adjournment package because the Legislature's spending plan can't be paid for without tapping the Constitutional Budget Reserve, and doing that requires a three-quarters vote.
Funding for labor contracts is among several issues Democrats are holding out for, said House Minority Leader Ethan Berkowitz.
Knowles has not said whether he will call a special session if the labor contracts aren't funded.
Knowles' Chief of Staff Jim Ayers has said he would advise the governor not to call a special session right away if contracts aren't funded. Instead, he said, Knowles should wait until Senate leaders have the votes to fund them.
``If they want to shut down the government, that's their decision,'' Ayers said.
Members of the largest of the state employee unions, the Alaska State Employees Association, have already voted to allow their leadership to call a strike if labor contracts are not funded.
Knowles' spokesman Bob King said it's too early to say whether the governor would follow Ayers' advice.
``He's not going to decide until it becomes absolutely necessary. Right now our feeling is the Legislature still has a week to go and they have plenty of time to work out this issue and we encourage them to take that time.''
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