Decrease minimum wage and spending

Posted: Wednesday, March 24, 2004

Republicans and Democrats in the Senate Finance Committee want to raise taxes ("Senate Hashes Taxes, Permafund," March 18). However, the Governor's own report, "Taking Responsibility Today For Alaska's Tomorrow," issued late last year, cited out-of-control spending, not inadequate revenues, as the cause of Alaska's budget problems. Although the governor himself has proposed a budget containing tax increases, in his report the governor pointed out that, "For 11 of the past 13 years, Alaska has spent more money than it has received. Of the more than seven billion dollars deposited into the state's savings account (called the Constitutional Budget Reserve) during the 1990s, only two billion remained at the end of 2002. The rest of the reserve had been used to prop up an unsustainable level of spending."

Alaskans should not be stuck with a new 4 percent statewide sales tax or another tax on the state's oil producers. This will only drive business out of the state in order to pay for more irresponsible spending. Since Alaska already faces the second-highest unemployment rate nationwide, significant tax increases would be especially harmful.

Instead of tax hikes, Gov. Murkowski and the Legislature should consider reducing the state's minimum wage - the highest in the nation at $7.15 an hour - and subjecting work that is now done by government employees to competition from private companies. Both of these solutions would help Alaska's economy and budget a great deal - without raising taxes.

Paul J. Gessing

Director of Government Affairs

National Taxpayers Union

Alexandria, Va.

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