Legislature may return home empty-handed

Workers' comp bill dies; permafund, tobacco tax and bond bills in jeopardy

Posted: Thursday, June 24, 2004

The special session of the Legislature to craft a long-range fiscal plan for the state is turning out to not be so special.

On Wednesday, Gov. Frank Murkowski's workers' compensation bill died in a House committee and his proposals on the Alaska Permanent Fund, tobacco tax and bond construction bills were in jeopardy.

Prior to a night House floor session on Wednesday, House Speaker Pete Kott, R-Eagle River, said the special session would end today.

"I'd probably look to get on that 12:30 (p.m.) flight," Kott said.

The Senate reached gridlock on the governor's plan to use Alaska Permanent Fund earnings for state government. His proposal would make the fund an endowment and open up more than $600 million a year for government use. Murkowski tied the proposal to transportation and education bond projects that the Senate rejected during the regular legislative session that ended in May.

Sen. Gary Wilken, R-Fairbanks, introduced his proposal to bypass a vote of the people to tap into permanent fund earnings. Wilken's plan would match money used from the state's budget reserve every year to fill the fiscal gap with earnings from the permanent fund. But the proposal would be passed through state law rather than a constitutional amendment.

The Senate Finance committee heard a presentation on the proposal but did not vote on the measure. A plan to split the proposed 5 percent of earnings from the fund between government and dividends died in the Senate during the regular session on a 5-15 vote.

The fate of the $1 tobacco tax hike that is projected to raise $35.5 million annually was uncertain on Wednesday.

The measure, which Murkowski called "must pass" legislation during the regular session, was approved by the Senate but was not given a committee referral by Kott until about 9 p.m., when the House adjourned for the day. Kott has publicy opposed the measure.

He said he would not give the measure a hearing if the Senate does not approve Murkowski's permanent fund proposal.

"I think there's a consensus not only among the leadership but among the majority caucus," Kott said. "There is some connection between the percent of market value and anything else that we move forward. I think Gary Wilken put it very well on the other side when he said 'There's the A list and there's the B list.' ... If we don't get the A list, then we're not going to get the B list."

Kattaryna Stiles, tobacco policy coordinator for the Alaska Native Health Board, called the decision an extraordinary letdown for the state and that the tax hike would have cut teen smoking by 15 percent.

"I think it's very unfortunate that it's been tied to revenue measures," Stiles said. "This is a health issue. It always has been. We have the opportunity to save the lives of almost 3,000 kids who are alive today."

Murkowski's plan to overhaul the state's workers' compensation appeals system died Wednesday in the House Labor and Commerce committee, with six lawmakers voting no and one voting yes.

Republicans and Democrats complained they were not given enough time to review the bill before they were expected to vote.

"Many members of our body never even saw a copy of the 69-page bill until yesterday, and the changes were major, and there's no way they could be discussed effectively in a one-hour meeting that included public testimony," said committee member Nancy Dahlstrom, R-Anchorage.

• Timothy Inklebarger can be reached at timothy.inklebarger@juneauempire.com.



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