JUNEAU — Alaska lawmakers say they're taking steps to avoid repeating last year's disastrous budget gridlock, which lasted nearly two months through a pair of special sessions.
But House minority Democrats, whose support is needed to unlock the state's biggest savings account, say that so far, they're not happy with their Republican colleagues' direction when it comes to developing a state budget. If that disharmony continues, it could foreshadow more problems for this year's endgame.
"The further the budget goes along without any bipartisan compromise, the less likely it is there's going to be a bipartisan budget," Rep. Les Gara, D-Anchorage, said in an interview. "Once something passes that one party loves and the other party doesn't really like, it's hard to unwind it."
Lawmakers are trying to re-engineer last year's $5.4 billion budget after a sharp drop in oil prices created a roughly $3.8 billion deficit.
The debate is over how to close the gap, with Gov. Bill Walker proposing a restructured Permanent Fund to generate investment revenue to help pay for state government. Republican legislative leaders have been more focused on budget cuts, while some Democrats and at least one Republican are pushing for increased oil taxes.
The Republican-led majorities in the House and Senate will ultimately need votes from at least three members of the 13-member House Democratic minority caucus if they plan on passing a balanced budget using money in the Constitutional Budget Reserve — an $8.5 billion savings account that lawmakers used last year to cover a multibillion-dollar budget deficit.
Spending money from that account requires a three-fourths vote from each chamber. In the Senate, the Republican-led supermajority claims 16 of 20 seats. But in the House, the Democratic-independent caucus holds 13 of the 40 seats — enough to block passage of a budget they don't like, if it relies on money in the savings account.
Three of those Democrats this week — Gara and Anchorage Reps. Geran Tarr and Andy Josephson — raised doubts about whether they'd support the $3.8 billion spending plan for state agencies that's currently sitting in the House Finance Committee.
The House Finance Committee version proposes to slice another $170 million beyond the $100 million in reductions already proposed by Walker, and would cut programs favored by Democrats like cash payments to senior citizens and money for pre-K education and public radio.
"I would not vote for this budget," Josephson said at a news conference Tuesday. "I understand that there are important cuts to make, but they must be surgical — and I think that approaching $300 million exceeds that fine surgery."
Rep. Mark Neuman, R-Big Lake, co-chair of the House Finance Committee, said in an interview Tuesday that he's committed to an open budget process. But Neuman, who is responsible for putting together the operating budget, acknowledged that an open process wouldn't necessarily result in a budget bill that the Democrats would vote for.?
He added, however, that it's too early to expect the Democrats to support a budget and give up their leverage over the state savings account — a point that Rep. Chris Tuck, the Democratic leader, made in his caucus' weekly news conference Tuesday morning.
"Right now we're in the beginning stages," Tuck said. "It wouldn't make sense to give up our three-quarters vote."
This year's budget legislation, in fact, doesn't yet include a provision to draw the money from the budget reserve account that the House Democrats could vote for or against — it will likely be inserted later.
House Speaker Mike Chenault said in an interview that the House's budget process is designed to "get something on the table" that can be sent to the Senate, which typically takes up the spending plan after it passes the House. Asked why the House Republicans don't try to reach agreement with the Democratic minority before sending the budget to the other chamber, Chenault responded: "We don't know what the heck the Senate's going to do."
"I mean, we have no clue," he added. "The easiest way is to put a budget by both bodies together so that you've got something on the table. Then you can negotiate the finer points of it, to get the three-quarter vote."
Chenault said one of the Democrats' priorities is the inclusion of new revenue-producing measures as part of a budget package, though currently, a batch of tax proposals from Gov. Walker's administration is being considered separately.
Members of Tuck's caucus have pushed over the last few months for increased oil and corporate taxes, while Republicans have criticized Walker's plan to increase oil taxes and reduce oil tax credits.
In the early stages of putting that budget together, however, some of the Democrats said they've felt that their opinions have been ignored.
Republicans haven't taken up two broad Democratic budget proposals — to create a new finance-focused Ways and Means Committee and to incorporate Democrats into a single-caucus unity government.
As for the details of the state's spending plan, Gara, the Anchorage Democrat, said he was able to reach agreement with the chair of the House's budget-setting committee for the health department (Rep. Dan Saddler, R-Eagle River) on one or two items. But he added that Saddler's committee was still proposing damaging cuts to grant programs for Alaskans with Alzheimer's disease and developmental disabilities.
"Personally, this isn't a budget I can support, with the hits that are in it," Gara said. "Some of these cuts are not necessary if we raise revenue."
Saddler wouldn't answer a reporter's questions. Another Republican, Wasilla Rep. Lynn Gattis, the chair of a budget subcommittee on education, said she's open to hearing all the Democrats' ideas and amendments — but not to voting for them if they produce higher government spending.
"All they wanted to do is add money back," she said, referring to her Democratic counterparts. "It's not about partisanship. Although it could be said, when you look, it falls right down the line."
But if the Republicans don't incorporate Democratic ideas early in the budget process, that could make things more difficult later on, once the Senate is involved, according to Doug Mertz, a Juneau attorney and former assistant attorney general who has experience as a private mediator.
"The classic wisdom for multiparty negotiation or mediation is that you really have to have all the parties at the table at critical junctures to get some kind of buy-in from all of them," Mertz said in a phone interview. "Unilateral decision-making leads to frustration and resentment, and brute-strength jockeying at the end."
The longer it takes to get all parties involved, Mertz said, the greater the likelihood that budget negotiations will be extended and devolve into "public posturing, before people really get down to making the hard decisions."
Josephson, the Anchorage Democrat, put the thought in a slightly different way at Tuesday's news conference: "I believe these conversations should have occurred earlier."
"They might as well occur today," Josephson added. "Because they're going to occur tomorrow."
Another complicating factor is the Senate majority, which is likely to advocate for deeper reductions than those proposed by House Republicans. That means their proposal would likely pull the Legislature's budget proposal even further away from a plan that the House Democrats would support.
"It can become very, very messy at the end of session," Sen. Lyman Hoffman, D-Bethel and a member of the Senate's coalition majority, said in an interview.
If lawmakers can't reach agreement on a budget that produces a three-quarters vote in the House, Gattis said, she prefers to pay for the spending plan another way — with the earnings reserve account of the Permanent Fund, which currently holds more than $6 billion.
Last year, that was considered a "nuclear option" because Democrats could accuse Republicans of "raiding the Permanent Fund." Now, use of the earnings reserve is part of the governor's big fiscal plan.
Money in the earnings reserve can be spent with a simple majority vote, though lawmakers have traditionally been wary of spending cash from the same account that pays Alaskans' annual dividend checks.
Last year, when the House Republican leadership was considering a plan to sideline the Democrats and balance the budget using the earnings reserve, six moderate members of the House majority rebelled, sending a letter to Chenault saying they wouldn't support the idea.
Gattis acknowledged that her preference of using the earnings reserve is at one end of the political spectrum.
"I come from the Mat-Su," she said. "And not everybody thinks that way."