Governor calls second special session over budget deficit

JUNEAU, Alaska (AP) – Gov. Bill Walker is recalling lawmakers to Juneau to deal with the state’s multibillion-dollar budget deficit, caused by tumbling oil prices.

Walker said Sunday that a special session will be held beginning July 11. The House adjourned the first special session of the year on Saturday night after its Finance Committee failed to move a bill that would provide limited Alaska Permanent Fund dividend checks to help counter the $3.2 billion budget shortfall.

That bill will be back on the agenda during the second special session, as will measures to create a state income tax, increase other taxes and one looking at the oil-and-gas tax credit system.

“Can we afford a special session, another special session?” Walker said during a news conference. “The special session costs about $13,000 a day, and our deficit is about $11 million a day. Yes, we can afford another special session.”

Walker said the budget issue is too dire to wait until lawmakers gather for a regular session next January. The governor said he’s “absolutely convinced” that if the budget problems are not fixed this year, they will become even more magnified next year.

The Legislature has cut millions of dollars from the budget after 148 days in session, but next year’s deficit remains, the Juneau Empire reported. Unless lawmakers approve tax increases or spending from the Permanent Fund, that shortfall will be paid for with state savings accounts.

Walker has been clear that the Permanent Fund must be part of the solution. His proposal would cap the oil fund checks given each year to nearly every Alaskan at $1,000 for the next three years, about half the amount of last year’s check.

The Senate had passed Walker’s bill. The House came up with an alternate plan, capping the checks at $1,500 for two years, but that failed to move out of committee Friday. House members said they didn’t have the buy-in from their constituents to touch the oil fund.

Some opposed to the plan also said the administration had not done enough to trim the fat from state government.