Governor calls session

Murkowski hoping for a spending cap, access to permanent fund earnings

Posted: Sunday, June 06, 2004

Gov. Frank Murkowski issued a proclamation Friday calling the Legislature to a June 22 special session for a final attempt to fix the state's budget woes this year.

Murkowski wants a spending cap and a measure that uses some earnings from the $27.5 billion Alaska Permanent Fund to close chronic budget shortfalls.

Against the backdrop of the University of Alaska Fairbanks, Murkowski said education funding is in peril without it.

"I think we share an obligation to get our job done," Murkowski said. "That's why they elected us, to solve problems, not to put off problems."

Lawmakers left Juneau after approving a $90 million increase in education funding, but deadlocked over whether to tap the permanent fund for state government.

House lawmakers approved legislation that would provide more than $500 million annually from the fund while still paying dividends to eligible Alaskans.

But in the more fiscally conservative Senate, both the permanent fund measure and a proposed spending cap died overwhelmingly before the Legislature adjourned May 22, along with other must have bills Murkowski had been seeking.

Other issues that could see new life with the special session are a $1-per-pack increase in the states tobacco tax and a change in the states workers compensation appeals.

A $236 million bond bill that included road improvements for Anchorage, construction projects for the University of Alaska and schools also was included in the call.

Murkowski warned he would approve the bond package only if his fiscal fix survives.

We cannot afford to jeopardize the states credit rating by approving a bond package if we do not have a fiscal solution, Murkowski said.

House Minority Leader Ethan Berkowitz, D-Anchorage, dismissed the bond package as a carrot thats unlikely to shake loose enough votes to get the permanent fund measure through the Senate.

The permanent fund bill and the spending cap are constitutional amendments that would have to be approved by voters in November.

Murkowski administration officials say it has to happen this general election to stave off deep cuts next year. And the Legislature has to act by early July for the amendments to get on the ballot, they say.

The House approved an amendment to convert the permanent fund to an endowment, limiting the annual payout to 5 percent of its five-year average value.

That would make about $1.3 billion available, which House lawmakers agreed to split between dividends and government.

This special session call the first for this Republican governor since he entered office in 2002 became necessary after the GOP-controlled Legislature refused to return on its own.

Murkowski said he expects the special session to last about three days. The Legislature has had plenty of time to consider the issues, he said.

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