Push to close state's budget gap remains fragmented, floundering

Posted: Monday, March 29, 2004

Two weeks into an informal special session aimed at closing the state's chronic budget deficits, the Legislature remains fragmented over a solution.

The Alaska Permanent Fund is out of bounds for many Democrats and hardline Republicans. Proposals to impose statewide income or sales taxes split lawmakers even further.

And Gov. Frank Murkowski's cry for a solution to Alaska's budget woes this year continues to be muffled by skyrocketing oil prices, which feed state coffers.

"The continual high price of oil is taking away any 'oomph' to fill the fiscal gap," said Sen. Kim Elton, D-Juneau.

The Murkowski administration won agreement from lawmakers to begin deliberating on a long-range plan to close the state's budget deficit after March 15. The Republican governor had expected lawmakers to push forward a plan by the end of the month, a target that now appears doubtful.

Since then, several competing proposals have surfaced to close the state's chronic budget deficits that the administration says could top $700 million over the next five years.

Murkowski wants lawmakers to take up recommendations he's endorsed from the Conference of Alaskans that use a portion of the $28 billion permanent fund to help close the gap.

He's asked lawmakers to consider putting a constitutional amendment on the November ballot for voters to decide the issue.

There aren't enough Republican lawmakers to muster the two-thirds vote that such an amendment requires so its fate lies in a bipartisan proposal.

But solutions so far have largely sparked deep ideological debate with minority Democrats. Permanent fund dividend checks are important to low-income Alaskans, so many Democrats are fighting plans to reduce them.

Many Democrats also insist a guarantee that dividend checks continue to flow be included in a constitutional amendment.

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