The Latest: Walker: Alaska is in a fiscal crisis

JUNEAU, Alaska – The Latest on the start of the Alaska Legislature’s special session (all times local):

3:53 p.m.

Gov. Bill Walker says the state is in a fiscal crisis as a result of inaction by the state Legislature.

Walker has long resisted referring to the state’s multibillion-dollar budget deficit as a crisis, calling it a challenge instead. He has said that it’s only a crisis if nothing is done.

But on the first day of the new special session Monday, he said he’s calling the situation a crisis.

Alaska has endured a number of disasters during its history, including the 1964 earthquake. But Walker says this will be a self-inflicted disaster if lawmakers don’t act.

Walker has proposed the use of Alaska Permanent Fund earnings and taxes to help address the deficit. A permanent fund bill passed the Senate but faltered in the House. Lawmakers so far have shown little interest in new or increased taxes.

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3:35 p.m.

The owners of the downtown Anchorage legislative office building have filed an administrative claim seeking $37 million in damages following a botched lease deal.

Lawmakers earlier this year mulled buying the building after a state court judge invalidated their lease but Gov. Bill Walker threatened to veto that purchase. The Legislative Council has since decided to pursue office space in another building.

The Legislature’s top attorney, Doug Gardner, said he had not had a chance to fully review the claim. It was addressed to Sen. Gary Stevens, chair of the Legislative Council.

The claim says the Legislature’s decision to “abandon” its commitments to the office building’s owners and seek another property improperly puts the consequences of the Legislature’s “flawed process” entirely on the owners.

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1:25 p.m.

Gov. Bill Walker is proposing a new, statewide 3 per cent sales and use tax, which he calls an alternative option for lawmakers to consider in lieu of his proposal to reinstate a personal income tax.

The sales tax bill was among the measures introduced Monday, as lawmakers began a special session called by Walker to address the state’s budget deficit. Certain items would be exempted from the sales tax, including groceries, wages and real estate purchases or rentals.

The Department of Revenue estimates the tax could generate $500 million annually.

Since the start of the year, legislators have shown little interest in Walker’s tax proposal. For the special session, he revived his income tax proposal and proposed tax increases on motor fuels and various industries.

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11:14 a.m.

The Alaska Senate has convened a special session called by Gov. Bill Walker to further address the state’s multibillion-dollar budget deficit.

This is the second special session this year and the fifth in two years. The House was expected to meet later Monday.

Lawmakers have struggled all year with how to address a bulging state budget deficit exacerbated by low oil prices.

Failure by the House to reach agreement on changes to the state’s oil tax credit program helped extend the regular session. There has been little interest so far in Walker’s tax proposals and the centerpiece of Walker’s fiscal plan, which would use Alaska Permanent Fund earnings to pay for state government and alter annual dividends, floundered in the House last month after passing the Senate.

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8:48 a.m.

Alaska lawmakers are set to begin a special session called by Gov. Bill Walker to address the state’s multibillion-dollar budget deficit.

An earlier special session ended last month with the centerpiece of Walker’s fiscal plan faltering in the House after passing the Senate.

Walker’s proposal to use Alaska Permanent Fund earnings to help pay for state government is on the agenda for the new special session, which begins Monday. The agenda also includes a tax package and a proposal dealing with tax credits.

In an op-ed, Walker said he planned to amend his special session proclamation to add a bill that would address language in crime bill legislation that he says could hinder prosecution of sex traffickers.

The special session was called for Juneau, though the Senate plans to hold some committee meetings in Anchorage.