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Plan for $25K dividends gets legislator's attention

Budget fix proposed because of lack of other fiscal solutions

Posted: Thursday, March 02, 2000

The only person to testify on a measure that would send $25,000 out to every Alaskan liked the idea.

On Wednesday, the House Judiciary Committee held the first legislative hearing on what's been dubbed the Mackie plan. The committee considered the House version of a measure that would pay out a final, $25,000 Alaska Permanent Fund dividend to present Alaskans and use the remainder of the state's close to $28 billion savings account to help pay for state government.

House Joint Resolution 47, offered by Rep. Gary Davis, a Soldotna Republican, is the House version of a measure put together by Sen. Jerry Mackie, a Craig Republican.

Kodiak's Kate Ballenger waited for hours to let her feelings on state government funding be known.

``I want to see the state budget squared away,'' said Ballenger. ``I just feel that it's ludicrous that we're sitting on billions of dollars and groveling over whether towns and cities will get money for education and on and on. It doesn't make any sense to me.''

The Judiciary Committee hearing was delayed by a long House floor session. Ballenger had been told testimony would go from 1 to 3 p.m., but didn't get a chance to speak until the clock was nearing 5, she said.

At the conclusion of testimony, Mackie noted that everyone who'd registered their opinion on the plan had given their full support. With a smile, he concluded that Ballenger spoke for all Alaskans.

``There is 100 percent support from the public,'' he said.

Mackie said his plan was prompted by the inability of lawmakers to put together a long-

range fiscal plan to address the chronic gap between the money the state brings in and the money it spends for programs. For the current budget year, that gap is estimated to be around $300 million, but is expected to be closer to $1 billion a year when oil prices come down from their current highs.

The savings accounts the state has used to fill the gap will dry up within a decade and force the state to take dramatic fiscal action, Mackie said.

``We're here today because we have a problem,'' Mackie told the committee. ``The Legislature will be forced to cut the budget $1 billion in one year or use dividends.''

Mackie said his plan, which requires a change to the state's constitution, is simple. That simplicity will help the measure garner support from voters if it gets the two-thirds approval from the Legislature needed to make it onto the statewide ballot, he said.

Mackie said federal taxes would take a hunk of the $25,000 dividend, but the payment wouldn't have the wide-ranging impacts on issues, such as welfare eligibility, that were of concern when his plan was first presented.

One concern, what the payout would do to Alaska's economy, remains, said Rep. Eric Croft, an Anchorage Democrat. The Judiciary Committee member said Mackie's plan might boom and then bust Alaska's economy. He also isn't pleased the measure seems to play off one of the least lofty of human motivations.

``I don't like various aspects of this,'' Croft said today. ``Using greed to get a fiscal plan solution is kind of distasteful.

``It feels wrong. (It's) too easy. Too cute. Too greedy. Too . . . something.''

But, Croft said, no other legislator has put forth a long-range fiscal plan for the state, and he wants one of those in place as soon as possible. Croft said he'll vote to move the measure on to the House Finance Committee, but won't necessarily cast a yes vote when the full House considers the measure.

``I told him (Mackie) that I'm not a yes for a floor vote yet, but I want a plan,'' Croft said.

Mackie said he expects the measure to move out of the Judiciary Committee on Friday.



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