The Alaska Legislature is headed for a special session focused on tax cuts for the Alaska LNG project immediately after lawmakers adjourn on Wednesday.
Gov. Mike Dunleavy said that’s because lawmakers look unlikely to pass a bill that would replace the 2% annual property tax with a tax on gas flowing through the pipeline.
“(A) message has got to be sent to leadership in Juneau that — enough of the games, stop playing the games,” he said Tuesday at a news conference in Anchorage. “Let’s get this thing going. Let’s employ thousands of people. Let’s solve our problems. It’s about solving problems.”
Until Monday, though, it was game on.
Lawmakers and the governor had a deal on the table: the Legislature would pass tax relief for the gas pipeline in exchange for the Dunleavy allowing a bill restoring pensions for government employees to pass into law. The House spent hours attempting to insert tax relief for the gas line project into what, until Monday, had been a three-sentence bill.
But the deal fell apart Monday night after lawmakers modified the bill in an effort to allow the North Slope Borough to negotiate its own tax agreement. Rep. Robyn Niayuq Frier, a Democrat and the only lawmaker from the North Slope, proposed the change.
“I have to fight for my district, and I have to fight against — everyone wants to pull the resources out of there to benefit the rest of Alaska, but you want to take away our property taxing rights,” Frier said.
But that was unacceptable to Dunleavy and pipeline developer Glenfarne, which said it would inject too much uncertainty into the $46 billion project and hurt its ability to get financing.
The architect of the pension-for-gasline-tax-cuts deal, Anchorage Republican Rep. Chuck Kopp, said the change effectively killed the bill.
“The Kenai Borough gave up their title 29 powers on a far (more) expensive LNG export facility to make this work,” he said. “The North Slope Borough has not been willing to do that.”
Last-ditch negotiations continued late into Monday night. But shortly after 10:30 p.m., Dunleavy’s aides delivered a two-page letter saying the governor had vetoed the bill over numerous concerns, including its cost.
The head of the Alaska AFL-CIO, union leader Joelle Hall, said it’s a missed opportunity.
“We could be having more teachers stay, we could have correctional employees, we could also have a generational investment, and it appears to me that both of those things might have gone up in smoke today,” Hall said.
Lawmakers failed by a wide margin Tuesday afternoon to override Dunleavy’s veto of the pension bill.
Dunleavy said he does not plan to offer a similar deal in a special session.
