Bill would require governor to submit long-range fiscal plan

Posted: Monday, April 07, 2008

Alaska's governor would have to submit an annual long-range fiscal plan under legislation that passed the House and Senate unanimously.

Rep. Mike Hawker, R-Anchorage, introduced the bill as the chairman of the House Ways and Means Committee.

He said the 10-year plan would serve as a starting point for lawmakers' future financial discussions.

"This is a profound change in the way the state approaches decision making. All we do now is look at a one-year spending plan. This formulates a ten-year plan," Hawker said.

"When you have it down on paper people are forced to focus on the reality of the consequences of their actions."

The plan would lay out a 10-year projection of the state's major sources of revenue and uses of funds. It would be submitted before the governor's annual state of the state address.

Despite concerns, Gov. Sarah Palin's budget managers spoke in favor of the bill during committee hearings.

John Boucher, a senior economist with the Office of Management and Budget, told the Senate Finance Committee that the administration wants to avoid the plan becoming a bulky annual exercise that sits on a shelf and is ignored.

He said the plan could lend perspective on the need for Alaska to be conservative when it comes to long-term spending commitments and could underscore the challenges of finding additional sources of revenue.

Fiscal experts warn that the state will not be awash in oil revenues for long. Even if oil prices remain high, oil production on the North Slope is in decline and a possible natural gas pipeline from the North Slope is well over a decade away.

Lawmakers have tried unsuccessfully in the past to write a fiscal plan for the state.

Hawker said his bill simply sets up a planning process.

The bill now goes to the governor next for her consideration.

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