Crunch time is next week for fiscal bills in Legislature

Posted: Sunday, March 14, 2004

The Legislature will focus this week on legislation ranging from use of Alaska Permanent Fund earnings to an employment tax to help fix the state's long-term fiscal gap.

With a chronic budget deficit that in the coming fiscal year is estimated at more than $500 million, Murkowski has told lawmakers he wants them to act this year to solve the state's financial woes.

He had planned to call a special session but called it off when lawmakers agreed to focus on the fiscal gap this week.

"We're trying to find out what's the art of the possible," said House Majority Leader John Coghill, R-North Pole. "I'd say there's a real willingness to put some long-term solution up for a vote in the House."

The Senate Finance Committee has meetings scheduled every morning and afternoon this week and will take public comment Wednesday night.

The measures lined up there are all constitutional amendments dealing with changes in the permanent fund or a cap on state spending. All would require a two-thirds vote of the Legislature and approval by voters in November.

The proposals include one supported by the permanent-fund board to restrict annual appropriations from the $27.7 billion fund to 5 percent of its market value based on a five-year average. This so-called "POMV" change is widely seen as a management tool that, by itself, would have little effect on permanent fund dividends.

But some lawmakers have talked about splitting the 5 percent revenue stream between dividends and government.

Other measures before Senate Finance take various approaches to guarantee that Alaskans continue to receive a permanent-fund dividend and limit how much the state can spend on government.

The House has a greater variety of fiscal measures scattered among committees. They include variations on the spending limit and permanent-fund constitutional amendments the Senate is taking up.

But House committees also are looking at a $100 tax on Alaska workers, a bill spelling out how permanent-fund distributions would be used if the POMV proposal passes, and a proposal to pay dividends to Alaska communities out of permanent-fund earnings.

Various groups that have looked at the state's fiscal gap over the years have concluded that a combination of measures is needed - including spending cuts, use of permanent-fund earnings and taxes.

But Senate Finance Chairman Gary Wilken, R-Fairbanks, is not planning such an approach.

"I don't think on Friday or Saturday or Sunday, we'll be rolling out a long-term fiscal plan to take to the Senate floor," Wilken said. "If that was possible, it would have been done by now."

The Senate will focus on resolutions approved last month by the Conference of Alaskans, a group Murkowski asked to look at issues related to the permanent fund and the state's fiscal gap, he said.

Wilken said if the constitutional amendments pass the Legislature and the voters, they will be a foundation upon which a fiscal plan could be built.

Sen. Kim Elton, D-Juneau, said he's discouraged by Wilken's statement that he does not envision a fiscal plan passing this year.

"It sounds like he's not expecting much," Elton said.

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