JUNEAU, Alaska (AP) - The state of Alaska warned government workers Tuesday that they could face being laid off as legislators remained at odds over addressing the state’s multibillion-dollar deficit.
About 17,000 notices were expected to be mailed to state employees on Thursday, Department of Administration spokeswoman Minta Montalbo said. She noted that it does not appear a budget will be finalized by then.
The figure does not include the university system, Legislature, courts, Alaska railroad or Alaska Housing Finance Corp., which Montalbo said are responsible for notifying their respective employees.
The notices serve as a 30-day warning that workers could be laid off if a budget isn’t finalized by July 1, the start of the new fiscal year.
Notices were sent in 2015 but rescinded when a budget deal was reached.
Since then, as oil prices have remained low, lawmakers have required additional time to pass a budget and struggled to find agreement on a deficit-reduction plan. The state, which has long relied on oil revenue to pay its bills, has been using savings to get by.
The uncertainty is being felt at the local level.
The Anchorage School District, for example, distributed 220 layoff warnings to all first-year and some second-year teachers, except those in what are considered hard-to-fill positions such as special education and language immersion.
The district’s Heidi Embley said employees who received notices could be recalled for duty, depending on what the Legislature decides.
Jim Duncan, executive director of the Alaska State Employees Association, said he expects legislators to compromise as pressure builds. He doesn’t think there will be a government shutdown.
Many state employees went through the process of getting layoff warnings two years ago, he said. “They survived it. That doesn’t mean it’s easy for them. It’s not,” he said.
The House and Senate have each passed bills calling for structured draws from the earnings of the state’s oil-wealth fund, the Alaska Permanent Fund, to help pay for government services. Fund earnings traditionally have been used to pay Alaskans an annual dividend and to protect the fund against inflation.
The two proposals differ in the mechanics, including in how dividends would be calculated.
The House and Senate also disagree over what else should be done, with the House majority coalition, composed largely of Democrats, favoring a broad-based tax and more extensive changes to oil tax policies than the Senate has endorsed.
The Republican-led Senate majority, meanwhile, has rejected a House-passed income tax. It also has called for limiting future spending and for cuts to public education and the university system that House majority members consider unacceptable.
Legislative leaders said it’s tough to move forward on the budget without getting the revenue pieces settled.
Senate Finance Committee Co-chair Anna MacKinnon said the Senate is ready to compromise and willing to negotiate.
“The problem is getting to the table,” the Eagle River Republican said. Attempts are being made to see if a path forward can be outlined, she said.
“I’m cautiously optimistic but I know that there are some must-haves that we have seen from the House that may not be reasonable for the Senate,” MacKinnon said.
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