"We're talking to them. But the fact is, we've got a plan and we're moving on with it," said Senate Finance Co-Chairman Pete Kelly, a Fairbanks Republican, in an interview Saturday.

Democrats' refusal to go along with the necessary three-quarters vote to tap the Constitutional Budget Reserve is the technical reason that the regular session didn't conclude Tuesday and that the two-day extension of the session failed Thursday.

Democrats refused to provide the votes because Republicans wouldn't agree to the way in which they wanted to link future school construction projects in unorganized, rural areas with projects in municipalities.

The Legislature operates under an implicit constitutional obligation to balance its budget.

With proposed expenditures exceeding revenues by $900 million or more in the next fiscal year, lawmakers must use savings to balance the budget. That has happened all but two years since the CBR was created by voters in 1990.

But Republicans say they're fed up with being pressured by the minority to increase or reallocate spending at the end of each legislative session.

"Obviously, people want to negotiate forever," said Senate President Rick Halford of Chugiak.

Halford said his caucus is researching ways in which to get by without the CBR vote. He described it as a fallback position rather than a plan, but he said it would be possible to issue "revenue-anticipation notes" to fill the budget gap, requiring the next Legislature to have the CBR vote to pay off the debt. Republicans have introduced a related bill to void the "sweep" provision that would deposit leftover money into the CBR.

Republicans still would approve about $134 million in school construction bonds for 11 remote communities, but there would be no further concessions, Kelly said.

Leaving Juneau without a CBR vote is a plan "to go nuclear," said Senate Minority Leader Johnny Ellis, an Anchorage Democrat. "We're staying calm and trying to work out a responsible deal as quickly as possible."

If Republicans actually skipped the CBR vote, the likely result is that Democratic Gov. Tony Knowles would veto the state operating budget and capital budget, and call another special session, Ellis said. Knowles' spokesman, Bob King, couldn't be reached for comment.

Talking with two reporters, Halford was deliberately vague about how serious he is on the CBR, in order to protect his negotiating strategy.

"Just to be clear ... " one reporter started.

"I don't want to be clear," Halford said, getting a laugh from the reporters. "And I don't want you to be clear."

Meanwhile, the issue that triggered this special session - "linkage" ensuring that village school construction would stay on pace with new schools in municipalities - is far from resolution.

"I think we're all saying linkage is dead," Kelly said.

"I think it's inappropriate for us to try to bind future Legislatures' hands," said House Finance Co-Chairman Eldon Mulder, an Anchorage Republican. "It's giving a false hope to something that can be negated or ignored in the future."

Rep. John Davies, a Fairbanks Democrat, said that he doesn't agree the issue is dead.

"There's linkage and there's linkage, and there's other ways we can get there," Davies said, declining to elaborate.

Ellis noted that Democrats used their CBR votes to force rural school construction last year, so some kind of guarantee is necessary, he said. Even if good will is assumed, "Will Sen. Kelly be here next year? I don't know," Ellis said. "Will I be here next year? I don't know."

The Legislature continued a rebuilding process Saturday to get major legislation back in the approximate shape it was in at midnight Thursday, when the lawmakers didn't meet the constitutional deadline for adjournment. All bills died then, and new bill introductions and committee and floor actions were necessary to get things in play again.

"We're putting the bills in the position so that when the negotiations bear fruit, we can move quickly," said House Minority Leader Ethan Berkowitz, an Anchorage Democrat. "Nobody's injecting new ideas into it."

The House, by a margin of 37-1, passed a bill extending the Regulatory Commission of Alaska until 2006, avoiding a one year wind-down that otherwise will begin July 1.

Mulder noted that the House had approved "several versions, several shapes, several varieties" of that bill, and the Senate failed to act on any of them, primarily because of opposition from Senate Judiciary Chairman Robin Taylor of Wrangell.

Taylor's opposition is based in part on RCA decisions to allow local telephone competition in markets, including Juneau, that were previously dominated by ACS. He says it's premature to make a decision on RCA without seeing the results from a telecommunications study that's about to get under way, as well as from a U.S. Justice Department investigation of ACS' chief competitor, GCI.

House members, though, had a laugh at Taylor's expense.

"If you don't like the decision, you don't shoot the judge," quipped Speaker Brian Porter, as the bill moved out of the House.

The House also passed the school bonds package and debt reimbursement for "urban" school construction, and the Senate passed a capital budget with a variety of projects.

The Senate approved legislation, sought by Knowles under threat of a veto, to rename the assisted-living Pioneers' Homes to include veterans. Halford said he's trying to convince House Republicans to go along.

The Senate Resources Committee held a hearing late Saturday afternoon on possible solutions to the 13-year-old subsistence controversy.

Knowles has resubmitted a proposed constitutional amendment matching the rural subsistence priority in federal law. Sen. Jerry Ward, a Nikiski Republican, has countered with an amendment that would allow the Legislature to adopt a local preference, based upon customary and traditional subsistence use of resources in rural areas.

Alaska Federation of Natives President Julie Kitka urged "extreme caution in going forward with any new ideas that doesn't have core support from the Native community."

Kitka said she would urge Natives to vote against any constitutional amendment that appeared to offer less protection for subsistence rights than what they now enjoy under federal management. That includes Ward's.

The hearing included a lengthy back-and-forth between Attorney General Bruce Botelho and Sen. Taylor, who claimed to have memos written by members of Botelho's staff contradicting the administration's positions on subsistence. Botelho said the committee was welcome to have his staff testify.

Bill McAllister can be reached at billm@juneauempire.com.