Two Alaska Senate leaders said Saturday morning that their chamber was unlikely to accept all the elements of the House's $5 billion bipartisan budget package passed the previous night, suggesting that a final deal could still be days away.
"You can pretty much guarantee we're not going to take whole cloth what they've sent us," Sen. Pete Kelly, R-Fairbanks, co-chair of the Senate Finance Committee, said in an interview Saturday morning. "We have to do a good job, not just a quick job."
And as if on cue, just as the finance committee started a brief hearing Saturday afternoon, Kelly announced it would begin work on a substitute later in the day.
The House passed its budget compromise early Saturday morning by a 32 to 8 vote, after extending this year's legislative session more than a month beyond its scheduled conclusion -- and with a government shutdown looming just over a month away.
The House Democratic minority agreed to the deal after getting about $30 million in concessions from the Republican-led House majority caucus -- and a promise to fund scheduled raises for state workers, which were previously proposed to be canceled.
But the compromise also left out key Democratic priorities like expansion of the public Medicaid health-care program, and fully restoring proposed cuts to education funding.
Democratic support for the deal was needed for the House to clear a constitutional three-quarters voting threshold required to tap a state savings account holding billions of dollars.
The budget bill that passed early Saturday, however, only included a tiny fraction of the money needed from the savings account, which House Democrats described as an insurance policy that would guarantee them one more vote to accept or reject changes to the legislation made by the Senate.
Lawmakers are proposing to slice hundreds of millions of dollars from Alaska's annual budget, with the state facing a multibillion-dollar deficit stemming from a crash in the price of oil -- taxes and royalties from which make up the majority of state revenue.
But lawmakers differ over how deep the cuts should go and where they should be made, with the Republican-led Senate majority generally favoring steepest cuts in many areas, like funding for education and the state's ferry system.
In a prepared statement issued Saturday afternoon, Gov. Bill Walker lauded the House deal and urged the Senate to take it.
"It is now up to the Senate to concur with work the House has begun to ensure 10,000 layoff notices are not sent out," the statement quoted Walker as saying.
The Senate met Saturday morning to introduce the House's budget bill, which Senate President Kevin Meyer, R-Anchorage, referred to the finance committee.
In a five-minute committee hearing Saturday afternoon, Kelly called the House budget a "$15 million answer to a $3 billion problem," referring to the amount of funding it included from the state savings account compared to how much was needed.
"We'll recess to a call of the chair and come back later on with a Senate version," Kelly said.
Meyer, the Senate president, said in an interview that he followed the House proceedings on a computer until he went to sleep about 11 p.m. Friday evening, and got a briefing from his chief of staff Saturday morning on the previous night's full proceedings.
The Senate majority, Meyer said, was "not real pleased with what we received."
"It looks like the House majority gave up quite a bit to the minority," he said. "We're going to adjust it the way we want."
Meyer said his caucus could probably stomach the roughly $30 million in additional spending on education and other Democratic priorities in the House budget bill.
But the idea of restoring state employees' canceled raises, he added, gives Senate Republicans "heartburn," in part because preserving the raises means a higher starting point when the state's next round of union contracts is negotiated.
"What we're trying to do is limit the growth of government," Meyer said.
Rep. Cathy Munoz, R-Juneau, said she was nervous about how the Senate would treat the House compromise.
"I'm holding my breath and I really want this to settle out today," she said after watching the Senate Finance Committee hearing with two of her House colleagues. "If there are changes to what was sent over, we won't get the three quarters vote. It's a very delicate balance."
Kelly said in an interview that the finance committee planned to finish its work on the bill later Saturday, but with changes that would need to be hashed out in a special joint House-Senate budget conference committee.
Kelly said he was perplexed that the House budget bill left out full funding from the state savings account and questioned why seven of the 13 members of the House Democratic caucus voted against the measure -- though all the Democrats did subsequently vote to allow access to the state savings account.
"We cannot conclude -- and I put it in quotes -- that this is 'a deal,'" Kelly said. "They voted against it in large enough numbers that I can't conclude that's the case."
Anchorage Rep. Chris Tuck, the Democratic minority leader, said in an interview Saturday morning that he hadn't met with Meyer since passage of the House budget deal.
Tuck spoke while he was giving his mother and son a tour of the Legislature's Anchorage office, and said he planned to take the day off.
Kelly said he speaks with Tuck, but added: "I haven't sat down and negotiated."
House members said their deal early Saturday was spurred in part by the planned mailing Monday of warnings to 10,000 state workers that they would be laid off July 1 unless a budget deal was reached.
But Kelly said he saw Monday's mailing as "somewhat of an artificial deadline."