The only things certain in life, as the saying goes, are death and taxes.
Yet in Alaska, uncertainty continues to be the rule as the state waits to see how lawmakers will choose to address the budget gap.
The Legislature is now a little more than week into a special session — after extending its regular session — and appears no closer to a budget decision. The majority in the House has proposed restructuring the Alaska Permanent Fund to use some of the earnings for state government, supplemented by an income tax. The Senate has also proposed use of Permanent Fund earnings, but rejected an income tax and instead has proposed deeper cuts in state spending.
In a recent meeting with the Peninsula Clarion editorial board, Gov. Bill Walker said that while there had not been a lot of visible progress, lawmakers were moving forward in caucus meetings. After two years of Band-Aids, Gov. Walker said that he was optimistic that a new mix of lawmakers in Juneau would come up with a long-term solution.
Gov. Walker also used the term “uncertainty” — as did U.S. Sen. Lisa Murkowski in a recent visit to the Clarion — to describe the top concerns of people around the state. Uncertainty has had a number of consequences around the state, from the downgrades to the state’s bond rating last year, to oil companies taking a more cautious approach to their investments while tax issues are debated.
Locally, the Kenai Peninsula Borough School District’s decision to hold off on filling key positions until it knows how much funding it will receive from the state. When will the Legislature complete its work? Well, that’s uncertain, too.
Most lawmakers are home for a holiday break through Memorial Day weekend. When they return, they will have a very short time — just a day or two — before state budget deadlines start cropping up. The state fiscal year begins July 1, and without a spending plan in place, the state administration is obligated to notify state workers of potential layoffs by June 1.
Should lawmakers not agree on an operating budget by July 1, the state faces the prospect of a government shutdown. How would that be handled? No one is certain, as there’s nothing in state statute to even identify which state services are deemed “essential” and would be exempt from a shutdown.
We hope that when lawmakers return to the capitol next week, they get straight down to business. The uncertainty stemming from the lack of a resolution of budget issues is becoming just as damaging as the lack of a resolution itself, and if there’s one thing we are sure of, it’s that we don’t want “special session” to be in the same category as death and taxes.