Statewide sales tax hits the wall

Administration threatens budget reductions if tax is not passed

Posted: Sunday, May 18, 2003

The fate of a proposed statewide sales tax was uncertain Saturday night after an open caucus meeting between Republicans, Democrats and the Murkowski administration.

The unprecedented meeting held by the administration included a short presentation by Budget Director Cheryl Frasca. The 15-minute slideshow showed an alternate plan by the administration to cut $188 million from the budget in order to reach Gov. Frank Murkowski's budget goal of drawing no more than $400 million this year from the state's Constitutional Budget Reserve.

The $1.9 billion CBR is an account used in recent years to balance the state budget.

A list of reductions by the administration includes cuts such as $100,000 from rural energy programs, $4.9 million from the capital budget, $300,000 from parks and historical preservation projects and $44 million from the Longevity Bonus program.

Democrats have opposed the tax, and House Minority Leader Ethan Berkowitz, an Anchorage Democrat, said the minority will not be bullied by the administration.

"We're going to do what we think is right for the people of the state, and you don't conduct good public policy at the receiving end of a threat," Berkowitz said. "And I just always think that when people try to bully you you've got to stand up for what you think is right."

The tax has become one of the most controversial issues in the remaining days of the session, and House Speaker Pete Kott said if it did not pass in the House by Saturday, the tax would not have time to pass the full Legislature by the end of session. The last day of the session is Wednesday, May 21.

House members had not begun debating amendments to the bill by the Empire's Saturday night deadline.

The House adjourned early on Friday night instead of debating amendments to the the proposed 3 percent sales tax because there was not enough support among House Republicans to pass the bill, according to Kott.

Kott said Friday that there are about six or more swing votes among House Republicans on the bill, but Saturday evening he said opposition could be growing.

"It's a roving number every time you ask," said Kott, an Eagle River Republican.

Kott also said he is waiting for word from the Senate on whether there is support for the bill in that body. Senate Republicans were still caucusing with the administration Saturday night, but Kott said if there is not support in that body, then the bill will not receive a hearing in the House.

Shortly before the joint caucus between the Legislature and administration, Republican Sen. Scott Ogan of Palmer entered the packed committee room with a message for House members.

"I've come here to announce my position: Vote no, go home," he said, pointing to a button on his jacket that articulated his message.

Gov. Frank Murkowski has given no indication whether he would call lawmakers back to Juneau for a special session on the sales tax if it is not approved by the Legislature before the Wednesday deadline.

The tax is expected to raise about $300 million for the state, according to the state Department of Revenue.

Timothy Inklebarger can be reached at

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