Governor backs using fund revenue to fill deficit

Murkowski expresses doubt about enshrining PFDs

Posted: Wednesday, February 18, 2004

Gov. Frank Murkowski won't call a special session of the Legislature or introduce any bills based on the conference he assembled last week to discuss the Alaska Permanent Fund and the state's budget gap, he said Tuesday.

Murkowski's decision not to submit legislation reflecting recommendations by the 55 Conference of Alaskans delegates drew a swift rebuke from Democrats, who accused Murkowski of supporting only the recommendations he agrees with.

"There were a lot of people who were concerned that the conference would be nothing but a rubber stamp for the governor," said House Minority Leader Ethan Berkowitz, D-Anchorage. "When the conference wasn't a rubber stamp for the governor, I think it's unfortunate that he chooses to take the items that he agreed with beforehand from the conference and disregard the ones that he was unhappy with or uncomfortable with."

Murkowski had asked the delegates at the three-day Fairbanks conference to consider:

• Whether to use a portion of the permanent fund for state government.

• Whether to constitutionally protect permanent fund dividends.

• Whether to prevent depletion of the state savings account.

• Whether to adopt an endowment method for managing the fund.

Constitutional protection of the dividend and adoption of the endowment method require approval from two-thirds of the lawmakers in the House and Senate and a majority vote in the next statewide election.

Murkowski said he supports the conference recommendations for inflation-proofing the permanent fund under the endowment method known as percent of market value approach. He also supports the group's call to leave a certain amount of money in the state savings account untouched.

That account, known as the Constitutional Budget Reserve, has been used almost every year for more than a decade to make up the difference between revenues and expenses. It is expected to run dry by 2007.

Murkowski was reserved in his positions concerning how much of the fund should go to government use and whether to constitutionally ensure dividend payments.

The conference supported using some of the fund's earnings for state government but did not specify how much should be used.

On Tuesday Murkowski agreed.

"I've always felt that there was justification for using a portion of the permanent fund for government," Murkowski said. "The question is how much belongs within the purview of the Legislature."

Following his comment, Murkowski Chief of Staff Jim Clark broke in: "Wait a second. That question was: 'Do you support using a portion of the permanent fund?' The governor has never said (anything about) using a portion of the permanent fund. He's talked about income from the permanent fund, never using a portion of the fund."

The group also recommended constitutional protection for dividend checks that are paid to every eligible man, woman and child in the state - a concept that makes Murkowski uneasy.

"It takes away, if you will, the responsibility of the elected officials to make decisions of this nature based on needs that may change in time," Murkowski said.

Although he told lawmakers in January that he would propose legislation based on the conference's recommendations, on Tuesday Murkowski took a different approach.

"I don't think it benefits to identify a solution that necessarily parallels that of the recommendations of the council, which should be left open for extended debate because that group is an advisory group and the Legislature is not," he said.

At a morning press conference before Murkowski's announcement, Senate Minority Leader Johnny Ellis, D-Anchorage, said the governor should submit a package of proposals based on the conference's full recommendations.

"I thought there was a danger from the beginning from him asking his questions and just taking the answers he wanted," Ellis said.

Murkowski said he has no "pride of authorship" in submitting proposals and he did not think it was necessary to put forth his own plan.

Senate President Gene Therriault, R-North Pole, and Speaker of the House Pete Kott, R-Eagle River, noted that legislation for the POMV management tool and enshrining dividends in the constitution already have been proposed in the Legislature.

They noted, however, that there is no consensus among Republican lawmakers on any of the proposals.

Kott said the proposals likely would not be debated on the House floor unless Republicans decide to do so in closed caucus meetings.

Although the administration rescinded its call for a special session of the Legislature on March 1, it still will hold committee meetings beginning March 15, focusing on the conference recommendations.

Berkowitz said he hopes lawmakers use the time to begin outlining a solution to the state's fiscal gap. He said the Legislature will not come to a consensus on the issues if Murkowski does not play a leadership role.

• Timothy Inklebarger can be reached at

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