Democrats 'need to come to the table and talk,' GOP Alaska House speaker says

JUNEAU — The key player in the Republican-led Legislature’s end-of-session negotiations says his Democratic counterpart has not presented him with a list of specific demands and “needs to come to the table and talk.”

“Why would I make an offer not knowing what they need or what they want?” House Speaker Mike Chenault, R-Nikiski, said in an interview Saturday morning. “Makes no sense to me. They need to come to us with what they think they need.”

Chenault's comments came a day after the House Democratic minority leader, Anchorage Rep. Chris Tuck, said his caucus was waiting for the Republican-led House majority to "make us an offer that we’re going to like.”

On Saturday, Tuck acknowledged he hasn’t made specific requests of the majority.

“I’m not giving them any absolutes on the budget, and no absolutes on anything right now because I still think that you can change people's minds,” Tuck said in an interview. “I don’t want to turn it into a gridlock.”

The public standoff suggested the two sides remained far from a session-ending compromise with less than 48 hours left in this year’s 90-day legislative session. It’s set to finish Sunday at midnight, but lawmakers now appear certain to need extra time.

Chenault’s 26-member Republican-led majority controls the 40-member House, but needs Democrats’ approval to draw money from the Constitutional Budget Reserve, an $8 billion account likely needed to cover the state’s multibillion-dollar budget deficit.

Spending from the account requires a three-fourths majority in both legislative chambers, which means the 16-member Republican-led Senate majority can act without Democratic support.

The House faces a far more complex problem, with an ideologically diverse majority trying to reach agreement with Democrats as several major deficit-reduction measures are still in play — from oil tax reform to other types of tax increases to restructure of the Alaska Permanent Fund.

So far, members of the Republican-led majority have struggled to coalesce around their own deficit reduction plan. The caucus appears divided over the question of how quickly to reform Alaska’s cash tax credit subsidy program, projected to cost more than $750 million next year.

The slow pace of progress Saturday had lawmakers, lobbyists, and legislative aides speculating about whether an extended or special session would remain in Juneau or relocate to Anchorage.

In a brief interview outside the Capitol on Saturday before a car whisked him away, Gov. Bill Walker said “we need to just keep on keeping on” in Juneau, in spite of renovations set to begin Monday at the Capitol.

“We have to work around the issue associated with the building construction,” Walker said. “I just think it’s a lot of momentum already underway in Juneau and it’d be nice to finish it up.”

But Tuck’s unwillingness to present Chenault with specific demands suggests negotiations are still at an early stage — one at which there’s a reluctance by both sides to put the first offer on the table, said Doug Mertz, a Juneau attorney and former assistant attorney general with experience as a private mediator.

“Sometimes you can set the parameters of the discussion that way,” Mertz said in a phone interview Saturday. But keeping the discussions general, he added, puts off the “real hard negotiation to a later point.”

“In the meantime, each side is waiting for the other side to blink,” Mertz said.

Tuck said his caucus has made its priorities clear over the course of the legislative session “with our amendments, with our ideas, with everything that we’ve talked about.”

Chenault, he added, “needs to work with his members to find out how much they’re willing to work with us.”

"I don’t want to impose anything on them that they’re not willing to accept," Tuck said. "They’re used to dealing with us in that manner -- take it or leave it. I don’t want to bring it into a take-it-or-leave-it scenario."

House Democrats’ first priority is changing Alaska’s oil tax system, which is set to pay $775 million in cash subsidies to small companies next year. The entire oil industry in Alaska is projected to generate about $1 billion in state revenue next year.

Democrats have also spoken generally about protecting education, senior citizens and poor Alaskans, and offered dozens of amendments to the state operating budget to advance their priorities.

But like the Republican-led majorities in the House and Senate, House Democrats have not offered their own comprehensive financial plan like Walker’s. Tuck said at a news conference last month the Democratic version was similar to Walker’s, “with some tweaks to it.”

Walker is proposing to restructure the Permanent Fund to help pay for government, sharp reductions to oil companies' cash subsidies, a small personal income tax, and a package of tax increases on resource extraction and consumption.

Chenault’s House majority has advanced many of Walker’s measures to its finance committee or to the floor, but a scaled-back version of Walker’s oil tax legislation has stalled. His income tax proposal appears to have little support.

But Democrats say the Republican-led majority has refused to work collaboratively with them, heading them toward a repeat of last year’s budget stalemate that kept lawmakers in session for nearly two extra months.

The majorities rejected Democratic requests earlier in the session to form a power-sharing “caucus of the whole” — essentially a bipartisan unity government — and to create a Ways and Means Committee to vet financial legislation.

“We were in special session for 53 days last year. They should have started talking to us the next day, because in order to avoid the chaos at the end you need to be talking the whole time,” said Rep. David Guttenberg, D-Fairbanks, in an interview Saturday. “They have all the gavels. They set the calendar. They set the clock. Why are they waiting until the 11th hour to actually have the conversation?”

Chenault said he couldn’t broker a session-ending deal based on Democratic priorities without specifics. If Democrats say they support education, he asked, does that mean they want more money, or a more efficient delivery system?

“You can go through that with each thing,” Chenault said. “If you want to just talk in generalities, you can do that all the time.”

Asked whether his majority had identified its own specific must-haves, Chenault responded that his caucus already passed a state operating budget.

“We could pass it like it is and walk out of here,” he said.

But leaving Juneau without a compromise with Democrats would mean the budget either lacks the money from the Constitutional Budget Reserve needed to pay for it, or cash would be drawn from the Permanent Fund’s earnings reserve account.

An earnings reserve withdrawal last year was rejected by six members of Chenault’s own caucus, with moderate members saying the impact on Alaskans’ dividend checks hadn’t been vetted.

Based on the remarks Saturday from Chenault and Tuck, Mertz, the Juneau attorney, said lawmakers appear to be “far from a conclusion, unless something else is going on behind the scenes.”

A long delay could ultimately force lawmakers from the Capitol, with the building set to be emptied by May 2 as the renovation and retrofitting project ramps up.

Senate President Kevin Meyer, R-Anchorage, said in an interview Saturday the Legislature could remain in Juneau if a deal is close, or stop Sunday and count on Walker to call them into a special session to consider a few key pieces of legislation.

“I think we need to assess where we’re at tomorrow afternoon and just figure out if a few more days will get it done,” Meyer said. “Or if we’re a long ways apart we may have to look for another location.”

The most likely venue for a relocation appears to be Anchorage, though Juneau lawmakers have said they could make alternative space available when the Capitol closes.

Asked about his preferred location if the Legislature is forced out of the Capitol, Walker said: “We’ll see.”

“We’ll play each section as it comes,” he said. “We’ll see what happens after May 2.”

Lawmakers had varying preferences about what to do and where to go after Sunday. Rep. Geran Tarr, D-Anchorage, said she thought the Legislature could get its work done in Juneau in “about a week.”

“I think we’re close,” she said.

Asked about his preference, Rep. Craig Johnson, R-Anchorage, was frank, saying: “I want to go home.”

“Anyone who answers differently from that’s lying to you,” he said. “Doesn’t mean I will. But that’s what I want.”