By Matt Buxton

JUNEAU — After a week of being put off and delayed, the Interior Energy Project bill passed the Senate unanimously on Sunday morning, signaling that legislators thought they were ready to be done.

With a budget deal struck between the Republican-led majorities in the House and Senate on Saturday breaking a weeklong impasse, the Legislature started the morning with the plans to finally end the session but those plans had dissolved by early afternoon.

The budget deal reached on Saturday night didn’t include plans for just how the budget would be funded. Without House Democrats on board to make a multibillion dollar withdrawal from the constitutionally protected savings account, the Legislature would have likely left with a partially funded budget for the upcoming year.

Senate Majority Leader John Coghill, R-North Pole, said that’s not acceptable and said the Legislature will stick around to continue negotiating on that point.

“We would like to be able to be done funding government for the full year of 2016,” he said. “We could probably have voted today, closed the budget out and gone home, but we want to give the House every opportunity to fund the budget for the rest of the year.”

The Senate met about an hour after it originally was scheduled to meet Sunday morning to pass the Interior Energy Project and a bill granting a workers’ compensation review board more time to finish its work.

The Interior Energy Project bill, House Bill 105, allows the state to look for a source of natural gas for the Fairbanks area from somewhere other than the North Slope. It also requires regular reports to the Legislature on the new Cook Inlet-focused efforts.

“It’s fairly similar to the project we passed, but with a little tighter reigns on it,” Coghill said about the bill.

There was no debate on the bill and it passed the Senate 20-0. It now heads back to the House, which has been more skeptical about the renewed project, for concurrence later this afternoon.

The bill also leaves the Senate without the hundreds of millions of dollars in additional bonding authorization for projects elsewhere in the state.
The Senate also approved the conference committee report on the mental health budget, sending it over to the House.

The checklist of things for both bodies to cover before they can wrap up work and adjourn the session is shortening.

In the Senate, legislators will need to approve the operating budget deal that was finalized last night as well as House Bill 106, which relates to the Uniform Interstate Family Support Act and allows the state to continue to receive federal child support and welfare money. It also is waiting for the House to send over the capital budget so it can concur on the changes made by that body.

The House has a bit more left to do. It will need to concur on the Interior Energy Project bill, pass the capital budget, and concur on both the operating budget and the mental health budget. It will also be largely up to the House to figure out the funding for state government.

Included in the operating budget is an attempt at garnering a supermajority vote to tap the state’s Constitutional Budget Reserve. The Republican-led House Majority Caucus doesn’t have the votes necessary to tap it, and negotiations with House Democrats were cut off Saturday night when the Republican majorities in both bodies settled on their own budget.

Gov. Bill Walker has made no secret he plans to call them back into special session to review Medicaid expansion, a law requiring schools to develop age-appropriate sexual abuse prevention programs known as Erin’s Law and, if they don’t pass it, the Interior Energy Project bill.

Without the votes of House Democrats to tap the Constitutional Budget Reserve to cover the multi-billion dollar budget shortfall anticipated for the upcoming financial year, the Legislature could end up tapping other accounts, such as the $900 million Power Cost Equalization that helps rural Alaskans cope with high energy prices or the $7 billion Permanent Fund Earnings Reserve Account, which is filled by earnings from the permanent fund and is used to inflation-proof the permanent fund and pay out dividends.

Neither are particularly politically popular moves, and the Legislature could opt to adjourn without a funding source for its budget.
The state has enough money and income to operate without a withdrawal from its savings accounts through the end of the year, said Walker’s spokeswoman Grace Jang in an email Saturday.

“The administration looked into the potential impact of a partially funded budget,” she said. “We can operate through the end of the year, but there are appropriations made in 2015 where bills come due in 2016 and 2017 that we wouldn’t be able to meet.”

While not spelling out the governor’s plan if the Legislature fails to pass a funded budget, Jang said simply that Walker’s “expectation is the legislature will fulfill its constitutional obligation to pass a fully funded budget.”

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter:@FDNMpolitics.