Overtime Week 2: Jackhammers only thing that seem to be working
The Legislature is now two weeks into overtime — the 90th day adjournment seems an age ago — and not much is happening.
Committee meeting notices are posted and then cancelled. A trial balloon of a compromise on the contentious oil tax bill is floated, but then sinks.
The budget conference committee has gone through much of its work, and the all-important Permanent Fund earnings bills are still in the House and Finance committees.
Contractors are busy on the major capitol building renovation, but that seems like the only work being done. Instead of the customary bells being rung summoning legislators to floor sessions, only the jackhammers are heard as workmen tear into the building foundation.
On Sunday, a big crane will show up, blocking access. By then legislators will have dispersed to temporary offices.
In a briefing last week Gov. Bill Walker complimented lawmakers for staying in Juneau to finish their work rather than decamping to Anchorage to do it.
Walker said the availability of Gavel-to-Gavel in Juneau, the Legislature’s public access video service done by KTOO-TV of Juneau, was an important public service that is technically more difficult if done outside of Juneau.
Now that temporary quarters are set up it’s likely that any special session will be held in Juneau, too.
Another factor in the decision, however, may be the Legislature’s embarrassment over having to use, most likely, the controversial Legislative Information Office in downtown Anchorage if the group did come to Anchorage.
It’s unfair to say not much is happening, of course. Behind closed doors there are intensive discussion and negotiations as legislators try to work their way through to a package for adjournment they can agree on.
It’s very complicated, though.
The bill that rewrites the state’s oil tax credit law is the big hangup. This is House Bill 247 and Senate Bill 130, the original bills sponsored by Gov. Bill Walker. HB 247 is in the House Rules committee, having been sent there after the House Republican Majority split on the issue before mustering a majority of 21 votes (of 40 in the House) to pass the bill to the Senate.
The Senate is hanging onto its version, SB 130, to see what the House does. The bill is in the Senate Finance committee.
Meanwhile, the session has not adjourned and all bills are still pending. Two big issues include criminal justice reform, in SB 91, and marijuana regulation, in HB 47.
The marijuana regulation bill is in a House-Senate conference where it may remain because of unresolved issues but an important part of it, criminal background checks on marijuana business operators, was taken out and passed in another bill.
This is a common late-section practice. If a bill gets bogged down parts of it are often stripped and attached to other bills that are moving through. This sometimes backfires, though.
For example, language from a bill granting pension rights to widows of slain peace officers was stripped from one bill and added to the crime bill. The effect was to slow the crime bill as legislators had to take a look at what the pension additions did, particularly when other amendments appeared granting pension rights to other worthy persons.
This is a called the “christmas tree” process where ornaments (amendments) are hung on the tree (the original bill). Sometimes there are so many ornaments that the tree dies.
The crime bill, SB 91, is still in House Finance committee as this is written but may be on the House floor this week, finally. The bill has broad, bipartisan support and will likely pass eventually. It would develop alternatives to prison for low-level offenders, too many of whom now crowd our prisons.
Normally this kind of bill is sponsored by liberal Democrats, but SB 91’s prime sponsored is Sen. John Coghill, R-Fairbanks, a conservative Republican.
Permanent Fund earnings
The other major bills hung up in the logjam are the Permanent Fund earnings bills. Identical version are now pending in both the House and Senate Finance committees that are hybrids of different approaches to this in bills originally introduced by the governor and Sen. Lesil McGuire, R-Anchorage.
The fact that the House and Senate leaderships seem to have coalesced around a version of this indicates some agreement on the form of a bill, but what isn’t known is whether there are enough rank-and-file members of the House and Senate needed to pass the measure.
Twenty-one votes are needed in the 40-member House and 11 in the Senate.
If the bill passes it would allow about $2 billion to $2.2 billion of Permanent Fund earnings to be used to support the state budget, but that still leaves $2 billion in a remaining deficit. For this year that could be covered by a withdrawal from state cash reserves but additional sources of revenue, most likely taxes, will be needed next year.
The state operating and capital budgets are also in limbo along with everything else. Legislators finished work on the agency part of the operating budget in late March, as planned, but several big-ticket spending items, mainly money for oil tax credit refunds, remain to be added when agreements are reached on those.
There are differences between the operating budgets passed by the House and Senate but much of that has been resolved by the conference committee. When the agreement is finally made on oil tax credits the amount needed to fund those will be added to the budget.
Oil tax credits
It’s a politically awkward issue because legislators may be asked to fund several hundred million dollars of tax credits at a time when $50 million in cuts are being made to the university budget, for example.
Some in Juneau have observed that it’s a coincidence that the top-end number for the oil tax credit payments of about $700 million a year is about the same amount that dividend payments to citizens will be cut this year by the various Permanent Fund restructuring bills pending.
The bills would set the dividend at $1,000 this year, down from about $2,000 if status quo remained, a reduction from about $1.4 billion paid out with a $2,000 PFD to about $700 million.
While there’s no direct connection between the oil tax credit bill and the Permanent Fund restructuring there is a potent political connection in that voters may believe their dividends are being cut to fund cash payments to oil companies.
Democrats are already taking advantage of this in op-ed articles being written.
Tim Bradner is a correspondent for the Journal. He can be reached at [email protected].