Fiscal gap dominates Anchorage debate

Posted: Thursday, October 24, 2002

ANCHORAGE - Both candidates in the race for governor were on the defensive Wednesday night as they again tackled the state's gap between revenue and spending in a televised debate.

For more Juneau Empire coverage of the November 5 general election, please visit the Juneau Empire Elections Guide.

While Democrat Fran Ulmer dodged the pro-tax label put on her by Republican opponent Frank Murkowski, Murkowski speculated that unexplored oil prospects could yield huge amounts of new revenue to close the gap.

"I don't have a tax plan. I have a parachute plan," Ulmer said at the live debate broadcast by KTUU Channel 2 from the Alaska Center for the Performing Arts. Ulmer explained her tax proposal would only take effect if the state's reserves fall. She criticized her opponent for not having a plan, saying he "just hopes things turn out all right."

Whoever is elected governor will face the same yawning problem in the coming years: a gap between state general fund revenue and spending that is projected to be more than $1 billion in coming years.

Murkowski repeated his opposition to new taxes and pledged not to touch the $22 billion Alaska Permanent Fund. The solution, Murkowski said, is oil. He predicted his pro-oil policies could boost state revenues by about $30 million a year beginning in 2005. That's not enough to fill the gap. But Murkowski said other prospects, including the unexplored McCovey site in the Beaufort Sea, could add more than $200 million a year in state revenues.

"We are not in bad shape," he said. "We do not have a $1 billion deficit."

This year if oil prices stay high, the gap could be closer to $500 million, according to state revenue forecasts. In coming years, however, the gap is projected to be $1 billion.

"Oil and gas is where cash flow is and we're going to have to concentrate there," Murkowski said.

Ulmer repeatedly said Murkowski is not being honest about state finances.

"Frank, there you go again," Ulmer said. "That still doesn't balance the budget. We can't afford to hope the problem will go away."

Murkowski shot back with repeated references to what he called Ulmer's "tax plan."

He asked two questions about an income tax bill Ulmer supported as a legislator. The bill, Murkowski said, as he held up a clutch of papers, did not allow deductions for prescription drugs and mortgage payments.

"I did it because the price of oil had gone through the floor," Ulmer said, while not addressing the specifics of Murkowski's question on the deductions.

Ulmer bore in on Murkowski's votes against education funding as a senator.

"I voted for the good education bills," Murkowski said. "I would note that the (National Education Association) did not choose to endorse either one of us."

The comment drew wild laughter and applause - a break in the strict no-applause policy laid down by moderator John Tracy.

Both candidates ducked difficult questions.

When asked what sort of tax Ulmer would favor if the state reserves fall, she said she would work it out with the Legislature.

When Ulmer asked Murkowski about how much his huge new road and railroad proposals would cost, he replied,

"Well, I'm not saying we're going to go write a blank check." He said he is confident Rep. Don Young, head of the House Transportation Committee, could get the federal money to help pay for the projects.

Both candidates have pitched themselves as being thrifty with state spending. But both declined to be specific about where cuts would come.

"Give us one example - I'll take anything," Tracy pleaded.

Murkowski said the Department of Corrections could be cut. Ulmer proposed greater use of technology to deliver services more efficiently.

Three of the four other candidates for governor crowded in the front row: Libertarian Bill Toien, Republican Moderate Raymond VinZant and Green Party candidate Diane Benson. Each had a pre-recorded 30-second spot in the middle of the debate but were not invited on stage.

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