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First hearing held in brand new Anchorage legislative office

The Alaska Legislature had a busy first day in its gleaming new office building in downtown Anchorage, marked by public and private meetings and a boisterous protest for education funding on the sidewalk outside.

But lawmakers concluded a meeting of a key committee Wednesday afternoon without making much progress toward moving the state's budget plan out of limbo territory.

Here's a roundup of the day's events:

Budget confusion

The House Finance Committee on Wednesday afternoon held the first-ever hearing in the Legislature's remodeled offices on Fourth Avenue, with members of the Republican-dominated majority peppering Gov. Bill Walker's budget director with questions about a new spending plan the governor has proposed.

Walker called the Legislature into a special session last week after lawmakers passed a $5 billion budget plan but identified only $2 billion to pay for it.

The Republican majorities need support from the House Democratic minority to clear a constitutional three-quarters vote threshold required to tap billions of dollars in a state savings account. But the Democrats haven't supported the existing budget plan because of proposed cuts to education and to unionized public employees' pay raises, among other components.

The finance committee meeting Wednesday was dedicated to discussion of Walker's new budget proposal. It would spend about $55 million more than the Republican House and Senate majorities' plan, restoring money for education and union contracts and allowing for expansion of the Medicaid health care program for poor and disabled Alaskans.

But committee members spent the first chunk of the hearing in a back-and-forth with Pat Pitney, Walker's budget director, about the purpose of the governor's proposal. The committee's majority members said they were perplexed by the governor's decision to submit a new plan before signing or vetoing the unfunded budget bill sitting on his desk.

"We need some definitive answers from him, as far as signature or veto," said Rep. Lance Pruitt, R-Anchorage.

Pitney described the current budget passed by the Republican-led majorities in the House and Senate as "invalid."

"It has $5 billion in spending and $2 billion of revenue," Pitney said. Walker's new plan was supposed to be a "conversation starter," she said.

Discussion eventually moved to discrepancies between Walker's proposal and the existing plan approved by the Legislature, but Democrats on the committee still questioned the purpose of holding the hearing at all.

One, Fairbanks Rep. Scott Kawasaki, said the meeting amounted to "two hours of rehashing old issues."

"We're rehashing the same debates we've had over the last 110 days," he said in an interview in a hallway outside the hearing.

Rep. Lynn Gattis, R-Wasilla, said in a phone interview that it wasn't clear to her why the Legislature was working with Pitney, rather than with House Democrats. The governor, she said, doesn't vote on the budget.

"And if we need the minority to be able to press the green button to pass the budget, we need to be talking to the minority," she said. "I'm not clear whether we're talking to the minority or the governor."

Progress in private?

Kawasaki insisted, however, that negotiations between his House Democratic caucus and the Republican majorities were still taking place, after they failed to reach a compromise on the budget in lawmakers' final days in Juneau.

House Speaker Mike Chenault, R-Nikiski, said he met with Anchorage Rep. Chris Tuck, the Democratic leader, for lunch Wednesday at a downtown restaurant. (Chenault ate pizza; Tuck had a cheesesteak sandwich, with peppers.)

"We're still talking," Chenault said in an interview as he left a meeting with Senate leaders later in the day.

Chenault, wearing jeans and a vest, said there is some legislative "angst" about Walker's decision to submit his new budget proposal without vetoing or signing the existing spending bill approved by the Republican majorities.

But the negotiations with the Democrats, he added, are ultimately about the components that are included in a final budget package -- not whose spending bill gets approved.

"It's always been about what's in it," Chenault said. "It's never been about the vehicle."

Tuck said the lunch conversation Wednesday was not as productive as he wanted and that his Republican counterparts "are still pretty hardline." But he noted that the majorities in the House and Senate both caucused Wednesday, which could spur progress.

"I think they were trying to get a feel of where their people are at," Tuck said in a phone interview. "I've got a feel where our people are at."

Back to Juneau, or not

Tuck said Chenault also presented him with a non-budgetary request: Take an informal poll of the 13 members of the Democratic caucus to find out whether they prefer to hold the rest of the special session in Anchorage or Juneau.

Walker called for the special session to take place in Juneau, and lawmakers are scheduled to return there next week. (They're technically in a "recess" this week.)

But Chenault said in an interview that it was "possible" the session could be completed in Anchorage instead.

Tuck said he'd heard back from all but one or two members of his Democratic caucus by Wednesday evening and that "people are saying we should do it in Juneau."

The Legislature's three-member Juneau delegation issued a statement Wednesday afternoon saying their city was prepared to host the special session "through at least the end of May."

The statement didn't mention discussions about keeping the Legislature in Anchorage, but Sen. Dennis Egan, D-Juneau, said he's heard rumors that lawmakers might be trying to avoid a return to his city.

"I just hope they're not true," Egan said in a phone interview. "This community's bent over backwards trying to accommodate them -- I think it sets a horrible precedent."

"Sessions are held in the Capitol," Egan added.

An “upset” populace

One effect of holding meetings in Anchorage, however, is that it leaves lawmakers "closer to the population," Tuck said.

"And people are really upset with us," he added.

He pointed to an early afternoon rally against education cuts outside the Legislature's Anchorage offices Wednesday that drew roughly 100 chanting, sign-toting protesters.

One of them, Jeff Ritter, 65, said he was upset with the way lawmakers handled education funding this year, with the Senate's Republican majority proposing a 4 percent cut to the state's per-student funding formula in the closing days of the legislative session.

"I think education should be talked about first -- not wait until the last minute and used as a bargaining chip," Ritter said in an interview. "Every year there's 50 to 100 teachers wondering if they're going to be working next year. That's no way to run a school system."

Ritter carried a poster with a drawing of a stop sign that said "Stop your cuts." Other signs at the rally read "You've gone too far," "Mat-Su cares, keep your promise" and "No more bad deals."

The group of protesters included a number of union leaders and some Democratic legislators, in addition to local activists. Rep. Mark Neuman, R-Big Lake, co-chair of the House Finance Committee, also made an appearance.

On Thursday, there's another rally planned in support of Medicaid expansion. It's sponsored by the Alaska branches of the NAACP and AARP, as well as the Alaska Primary Care Association and the trade group representing the state's hospitals and nursing homes.

Tuck said he wouldn't be surprised if there were rallies every day the Legislature remains in Anchorage.

"It's not Republican or Democrat -- everybody's upset right now," Tuck said. "I don't want to say anyone's a hero at this point, or anyone's the villain. We're all the villain."

Ferries

The Alaska Legislature can't yet decide how much money it is going to provide for ferry service next fiscal year, but legislators are telling the Walker administration that it should know -- and already be implementing the budget it may pass at some later date.

Some of the members of the Democratic minority whose votes will be needed to crack open the reserves come from ferry-dependent communities, such as Democratic Reps. Sam Kito of Juneau and Jonathan Kreiss-Tomkins of Sitka and Independent Dan Ortiz of Ketchikan.

Walker urged legislators who were proposing a $13.5 million cut in ferry spending to restore about half of that so reservations that have already been accepted don't have to be canceled.

About 2,900 reservations for about 10,000 people would be canceled, Transportation Commissioner Marc Luiken told the House Finance Committee.

"At some point we are going to have to start making phone calls" to customers, he said.

But finance committee members wanted to know why Luiken hadn't been more responsive to their suggestions for cuts, such as cutting service to ports that may not need ferry service as much because they have road access.

"One of the suggestions we put forward was that the Alaska Marine Highway System look at impact on ferry ports that are on the road system," said Rep. Mark Neuman, R-Big Lake, co-chair of the committee.

"If we've got people in Whittier, Seward, Homer, even Valdez, that are on the road system, those people may have to drive a bit longer," he said.

But Neuman appeared to be behind the times. AMHS in 2005 canceled service to Seward in a cost-cutting move, shifting that traffic instead to Whittier.

Neuman also mentioned northern Lynn Canal ports for possible cuts, where both Haines and Skagway get service, despite being only 13 ferry-miles apart.

But road miles are another story. Driving between the two cities involves hundreds of miles and eight hours of travel through British Columbia and the Yukon.

"We could cancel the run to Skagway and just run to Haines and ask those people going to Skagway to drive the 342 miles to make it to their home, that's certainly an option and we could explore that," he said.

Rep. Tammie Wilson, R-North Pole, said that trip was still shorter than her drive from North Pole to Anchorage.

Legislators told Luiken his department should already be contacting customers about canceling reservations on the assumption that the Legislature wouldn't be providing the money sought.

But Luiken said he couldn't know whether they'd have funding to meet the published schedule until a budget was adopted.

That incurred the ire of Neuman.

"I'm rather insulted that was your response to that," Neuman said.

The fiscal year for which the Legislature is trying to adopt a budget begins July 1, while this summer's ferry schedule was published last October.

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