House GOP split on dividend protection

Governor to respond to conference resolutions at press conference today

Posted: Tuesday, February 17, 2004

Republicans in the House of Representatives said Monday that the party is split over the question of enshrining Alaska Permanent Fund dividends in the state constitution.

Last week, 55 delegates from across the state met in Fairbanks at the request of Gov. Frank Murkowski to make recommendations on four questions involving the fiscal gap and Alaska Permanent Fund.

Murkowski will hold a press conference today to respond to the conference's resolutions.

Delegates recommended that the state enshrine dividends in the constitution, some debating that it would give Alaskans more comfort in allowing the state to use some of the fund for government services.

Rep. Norman Rokeberg, R-Anchorage, who attended the meetings at the University of Alaska Fairbanks, called the dividend protection provision "the most controversial and the least debated" during the three-day conference.

He said the conference was hijacked by former Gov. Jay Hammond and that it spent too much time discussing his plan to double dividends and then tax the money back.

"St. Hammond and his apostles were there," he said.

Rokeberg said the conference should have stuck to the agenda set by the governor, rather than straying on to other topics such as taxes.

Rokeberg also said House Republicans are divided on the issue of whether to enshrine the dividend. The plan has been supported by Democrats and some Republicans in the Senate.

Rokeberg said the conference's discussion could result in momentum for an income tax, noting that all options should be on the table for discussion.

Rep. Mike Hawker, R-Anchorage, chairman of the House Ways and Means Committee, said his committee has seen a growing debate over income and sales taxes but added that taxes alone would not fill the fiscal gap.

"What I really see emerging ... is the recognition that our fiscal issue overall is truly too large to solve by any silver bullet answer," he said.

Rokeberg praised the conference for passing provisions supporting an endowment method of managing the Permanent Fund and for leaving a minimum amount of money in the state savings accounts, the Constitutional Budget Reserve. The reserve has been used in recent years to balance the budget but is projected to run dry in 2007.

Although the conference didn't specify how much should be left in the budget reserve, Rokeberg said $1 billion would be a good amount.

The endowment proposal, also known as the percent of market value plan, awaits a hearing before the House Finance Committee.

The proposal would inflation-proof the fund, protecting it against fluctuations in the stock market, according to Permanent Fund trustees.

A special session to consider the conference's recommendations will begin March 1, but lawmakers still haven't made clear if it will mean halting the regular session.

House Minority Leader John Coghill, R-North Pole, said lawmakers still are discussing with the administration how the special session will take place.

• Timothy Inklebarger can be reached at timothyi@juneauempire.com.



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