Halford minimizes state's revenue problem

Posted: Friday, March 02, 2001

Senate President Rick Halford says things are good in Alaska state government, despite anxiety in some quarters about the lack of a formal, long-range fiscal plan.

Halford, a Chugiak Republican, addressed the Alaska and Juneau chambers of commerce Thursday, as the Legislature headed into a five-day break just before the mid-point of this year's session.

Commentators have noted the slow pace of legislative activity this year and the increasing likelihood that lawmakers won't resolve the ongoing gap between revenues and expenditures in the state general fund, which will be about $500 million in the next fiscal year.

But Halford said that, contrary to popular belief, there are two long-range plans - "a short-term long-range plan and a long-term long-range plan."

The Constitutional Budget Reserve has $2.8 billion, and the cash value equity in the state's loan programs is another $2 billion to $3 billion, he said.

"So we have an entire year's budget in a cash account that we could simply pay," he said. "What state has that? And if you take the projections forward, you have enough to carry a substantial deficit year after year after year ...

"If you look at a long-term plan beyond that, what do you have? We have $27.5 billion in the Permanent Fund, generating potentially $2 billion a year. The state of Alaska has so bright a future ... that we can't compare to any other state in the nation. What one wouldn't trade for our problems?"

Halford acknowledged there is resistance to using permanent fund earnings or an income tax to close the budget gap. A recent poll commissioned by Republicans showed continued strong opposition to either revenue source, he said. More people supported than opposed a state sales tax and new taxes on oil, cruise ships and alcohol, he added.

"But there's no combination of ways, short of resource development, that the population of Alaska can support the government that we want, the government that we've become accustomed to, and the government that we don't individually - at least by any poll I've ever seen - want to pay for," he said. "Resource development is our long-term future."

That said, Halford urged his fellow politicians to ratchet down the rhetoric on commercializing natural gas on the North Slope. While pipeline routes, technologies and markets have been hotly debated, producers haven't decided what they want to do, he noted.

"Some of those decisions simply are not ours to make at this point. ... The political exercise is a little bit ahead of itself," he said.

Halford also reassured Juneau business owners that bills to move legislative sessions to Anchorage or elsewhere aren't likely to pass.

"I don't think it's going receive critical mass to do anything," he said. "I come from probably one of the stronger capital-move, legislative-move districts, but it's not an issue that I think is productive to just get into an argument about."

A new business owner asked for assurance that "you won't move the Capitol tomorrow to Anchorage."

"Well, I can guarantee you we're not moving it tomorrow," Halford said, getting a laugh. "How long a term were you looking for?"

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

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