House approves spending cap, debates altering permanent fund

Posted: Friday, April 23, 2004

The state House agreed Thursday to a constitutional spending limit and debated a constitutional amendment that could lead to spending Alaska Permanent Fund income on state government.

The House is set to vote on the permanent fund proposal today. House leaders said they do not know whether they have the two-thirds votes needed to approve the measure.

"I think we'll have a very robust debate as we had today, and we'll hold our breath," said Rep. Norm Rokeberg, R-Anchorage.

Because some legislators in the 28-member Republican majority will not vote for the permanent fund measure, Republican leaders have been trying to convince some Democrats to support it. It must garner 27 votes in the House and 14 votes in the Senate to go to voters.

Minority Leader Ethan Berkowitz, D-Anchorage, said he does not know how many members of his caucus will lend their support.

"Most of us will be probably no's, but I don't know. I just don't know," Berkowitz said.

Leaders on both sides of the aisle were talking Wednesday about negotiating a deal that could lead to some Democratic support for the permanent fund bill.

House Speaker Pete Kott, R-Anchorage, said the deal could include a statewide bond bill. Rep. Mike Hawker, R-Anchorage, said it could also include an agreement for a study over the interium on possible changes in the state's oil tax structure and consideration of other tax bills.

But Berkowitz said Thursday the bond package and other measures are not directly linked to votes on the permanent fund constitutional amendment.

The spending limit and permanent fund constitutional amendments are part of Gov. Frank Murkowski's proposed solution to the state's long-term fiscal problems.

The permanent fund measure would change the method for calculating distributions from the permanent fund, Alaska's $27.8 billion oil-wealth savings account.

The constitutional change by itself says nothing about how the money would be spent. But a bill accompanying it calls for splitting the nearly $1.3 billion generated under the new formula between government and dividends for residents.

Lawmakers on Thursday turned down an amendment to the proposal that would have enshrined in the constitution Alaskans' right to continue receiving annual dividends from the permanent fund at the level currently provided in state statute.

They also voted down a proposed amendment to guarantee in the constitution that half the fund proceeds go to dividends and half to education.

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