Lawmakers are preparing to return to Juneau next week for another special session.
Gov. Bill Walker wants them to pass new revenue measures and restructure the Permanent Fund. Legislators may also consider overriding some of the governor's vetoes.
Lt. Gov. Byron Mallott visited the Kenai Chamber of Commerce on Wednesday, where he discussed the upcoming special session. He said legislators must bring urgency to achieving the goals laid out by Gov. Walker when they return to Juneau.
“It needs to happen now, because we are at a critical juncture. And this governor is dedicated to the proposition that he will keep dealing with the legislature until that is done,” said Mallott.
This fiscal year, the state is expected to spend more than $3 billion out of savings to cover its operations because of low oil prices. The governor proposed a package of budget cuts, new taxes and a restructuring of the Permanent Fund that would make state’s finances more sustainable. But lawmakers acted only on the budget — not the taxes or Permanent Fund restructuring.
Mallott acknowledged that legislators are now turning their attention to the upcoming primary and fall general election. However, he warned what the future would look like if the state burned through roughly $3 billion a year through 2019.
“Unless there is a miraculous recovery in oil prices to the levels that they were in mid-2014 — which no one is forecasting, which no one expects, at a time when production continues to decline — we are going to have to look at revenue sources in a way that we’ve never had to before, from individuals and businesses in Alaska,” said Mallott.
Mallott said the state is rapidly running out of options.
“If we can save the $6 to $7 billion that we have in savings now, bring in the earnings of the Permanent Fund to the level that the governor has proposed and the Senate has passed in legislation, if we can have a dividend at its historic level going forward, even then we will still need additional revenues,” said Mallott.
When it comes to the governor’s vetoes, Mallott said it completely depends on the legislature.
“What would need to happen would be for the legislature to put a full fiscal plan in place which has, if not the revenue gap fully closed, at least significantly closed that we can see a path forward,” said Mallott.
It takes a three-quarter majority vote to overturn a line item veto by the governor. The legislature is scheduled to convene in Juneau on Monday.