Alaska Gov. Bill Walker not only called the Legislature immediately into a special session last night, he insisted that lawmakers consider an income tax, even though the Republican-led Alaska Senate is firmly opposed to one and seems unlikely to budge.
Walker specified his first seven items for special session, but when it came to the eighth — the tax — he merely stated he wants some sort of “broad-based tax” that the starkly divided Legislature must come up with itself. However, since the only broad based tax proposal on the table right now is the House’s income tax, his eighth item is clearly meant to be an income tax.
Walker, as he did with HB 115, won’t offer the tax under his own name. He’s seen the polling, and it’s heavily opposed to his position and that of the Rasmuson Foundation, which is pushing for an income tax.
The governor’s Chief of Staff Scott Kendall has been visiting House Republicans to talk about what the governor wants, and he’s telling them there is no negotiating: Walker wants it all — higher oil taxes, an income tax, and Permanent Fund restructuring through SB 26.
“Expert testimony to both houses of the legislature has made clear that any complete plan to solve Alaska’s fiscal crisis must close the budget deficit this year, and include a broad-based revenue measure to connect Alaska’s economy to the services government provides,” Walker said in a statement.
What it means to “connect Alaska’s economy to the services government provides” is not clear, but it’s noteworthy that Walker mentions no trimming to those government spending programs.
GOVERNOR’S RACE NOW A FACTOR
The 2018 gubernatorial race now looms over the special session. It’s no secret that Sen. Mike Dunleavy, R-Wasilla is all-but-certain to run for governor. He removed himself from the caucus earlier this year so that he could continue to stand for deeper budget cuts.
But it’s also possible that Senate President Pete Kelly will launch a campaign for governor. He’s been encouraged by many to do so.
If Kelly has any hope of being successful in that endeavor, it means that this battle over budgets and taxes is a battle from which he cannot back down. Kelly is seen as a principled leader and he’s already said he won’t go along with an income tax. Even if he chooses not to run for governor, he’s not the kind of political warrior who will cave on taxes.
If Walker wants to be governor again, he can only hope he loses the battle for an income tax and that Kelly wins this round, because the optics, no matter how much the governor wants to keep the tax off of himself — are bad. Imagine the bill signing ceremony that would take place when Walker has to put his signature on an income tax bill.
Who besides Lt. Gov. Byron Mallott would attend such a ceremony? Rep. Paul Seaton of Homer, perhaps.
It’s more likely that the governor, who is now ramping up into campaign mode, would simply allow the tax go into effect without his signature, therefore keeping the stink of an income tax as far away as possible. However, if an income tax becomes law, the sitting Governor on whose watch it happens will not be able duck responsibility for it.
HOUSE AND SENATE BUDGETS ARE A HALF BILLION APART
The Senate has already compromised with the governor by passing SB 26. They did so and insisted on cuts to the budget to go along with it.
The House Democrats have not compromised, but instead actually increased the governor’s budget by over $200 million, with no argument or signal of disapproval from Walker.
Between the Senate’s $300 million in cuts and the House’s $200 million in add-ons, the two bodies are $500 million apart on spending.
Special session starts today at 11 am. The governor will have to send pink slips to State employees on June 1, and with the governor’s game of chicken, a government shutdown might be in the works for July 1. Savvy Alaskans may want to get all their licenses renewed and paperwork filed before that date.