Guv fends off budget critics

Gasoline-tax increase is not really a tax, Murkowski says

Posted: Sunday, March 09, 2003

Gov. Frank Murkowski is defending himself against claims by Democratic lawmakers that he broke campaign promises by proposing taxes and user fees and didn't address resource development during last week's budget address.

While Democrats have called the governor's 11 proposed revenue increases "a litany of taxes," Murkowski said only one of his revenue proposals could be classified as an involuntary, across-the-board tax.

"If you look at our user fees, they are all user fees," the Republican governor said at a Friday press conference. "The only one I would say and acknowledge is a tax is the proposed $100 school tax. That's applicable on everyone. The rest of them are not."

That proposal, which would take $100 out of every worker's first paycheck, is one of two options Murkowski presented to the Legislature. The other option is a seasonal sales tax, and the governor's proposal directs legislators to choose one of the two as the 11th revenue measure. Either tax would raise about $35 million.

Among the other 10 revenue measures are a $15 "wildlife conservation pass" non-Alaska tourists would have to buy, a $10-per-tire tax on studded tires, and a 12-cent increase on the gas tax, bringing it to 20 cents per gallon.

Murkowski argued the gas tax is a user fee, not a tax.

"If you have to take a bus everyday, you don't pay it, do you? You don't have to drive," he said.

The governor said while he expects the budget the Legislature passes to be different from the plan he submitted, he will veto it if it draws too much money from the Constitutional Budget Reserve, a savings account used most years to balance the budget. He called his plan's $393 million reserve draw a "target," but did not specify a withdrawal cap for the budget.

Murkowski also repeatedly emphasized he did not and will not propose a state income tax, and suggested some complaints by Democrats could only be alleviated by a state income tax. Alaska has been without such a tax since 1980.

"Some of our opponents say they won't support spending cuts, they won't support user fees without a comprehensive plan. I can only conclude ... that they're talking about a state income tax. I know of no other plan than an income tax to do basically what they want," Murkowski said.

But Democrats refuted the idea that they support an income tax.

"Absolutely not, categorically not, emphatically not," said House Minority Leader Ethan Berkowitz, an Anchorage Democrat. "It's presumptuous of him or anyone else to say what's going on in my mind without having spoken to me."

Berkowitz also restated his party's criticism that the governor did not address resource development in his budget cut plan.

"We're in the very bizarre position of trying to explain to the governor what the mandate of the election was all about," he said. "Show me the oil."

Murkowski said resource development remains at the forefront, and said his budget cut plan was intended to help the state live within its means until it can reap the fruits of development.

He said he was planning to meet with gas companies including BP Exploration (Alaska) Inc. and Exxon this month to discuss moving gas liquids down the pipeline and the conversion of gas to liquids.

"I think things are going as well as we could expect on that particular area of economic development," he said.

Masha Herbst can be reached at

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