Knowles taking aim one last time at subsistence, fiscal gap

Posted: Sunday, January 13, 2002

JUNEAU (AP) -- Gov. Tony Knowles enters his last year in office vowing to take up two of Alaska's most intractable problems: A decade long stalemate over subsistence and a budget deficit that is expected to top $1 billion.

It's an ambitious agenda that observers say faces long odds of being accomplished.

Knowles is likely to get some of the $180 million in additional spending he's asking for in his budget, said Clive Thomas, a political science professor at the University of Alaska Southeast.

But subsistence? ''Very unlikely,'' Thomas said.

Long term fiscal plan? ''Not one chance.''

Former Gov. Jay Hammond was slightly less pessimistic.

''I have very dim optimism regarding the resolution of the subsistence issue, although I think he has advanced that to a point that it stands a better chance of action than in many years past,'' said Hammond, who was a Republican governor from 1974-82.

Knowles plans to ask the Legislature to put a constitutional amendment before voters that would allow the state to comply with a federal requirement that rural residents have priority on subsistence use of fish and game.

Because the state constitution doesn't allow a preference for rural residents, the federal government assumed management of fish and game on federal lands and waters in Alaska.

Five special sessions by three different governors have failed to resolve the dispute.

Knowles' proposal offers a middle ground for staunch opponents who object to limiting access to fish and game for urban residents. The plan allows the Legislature to offer a secondary priority for non-rural residents.

But a key element that is missing from the plan is any proposed changes in the federal Alaska National Interest Lands Conservation Act, said Senate Majority Leader Loren Leman, R-Anchorage. Leman said that will be a stumbling block to resolving the issue.

Knowles also plans to release details of a long-range fiscal plan in his State of the State speech on Wednesday as he touts a new budget that includes $180 million in additional spending.

Budget forecasters are projecting the state will have a $1.13 billion deficit next year. At the same time, the state Department of Revenue also expects the Constitutional Budget Reserve -- which lawmakers count on to make up shortfalls in the budget -- will be empty by 2004.

A group of mostly House lawmakers have discussed a long-term fix to the revenue shortfall that includes a mix of income taxes, sales taxes, alcohol taxes, specific industry taxes and use of excess Permanent Fund earnings.

Knowles, who has supported reimposing a statewide income tax in past years, has said that his plan will include broad-based taxes and user fees. Knowles officials would not give further details of the plan.

House Speaker Brian Porter, R-Anchorage, said he hopes a long-range fiscal plan emerges this year, along with a plan to trim Knowles' budget.

''The governor's budget is -- as the governor's budget always is -- too large,'' Porter said.

Knowles' budget requests also pound away at familiar themes -- he wants $9.2 million more for children's initiatives, close to $5 million more for alcohol abuse treatment and prevention, $17 million more for the University of Alaska.

He's also seeking $43 million for a separate anti-terrorism package, including 66 troopers, six constables and 20 village public safety officers.

Republican leaders have vowed to closely examine all the proposals in Knowles' so-called Homeland Security initiative.

''Somehow I doubt that Shismaref is on bin Laden's hit list,'' Porter said.

Bob King, Knowles press secretary, said the governor intends to be very active in this, the final year of his second term. Knowles is barred by the state constitution from seeking a third consecutive term.

''I think he plans to be as aggressive as he always has been,'' King said. ''Just because this is his last year and this is an election year, people shouldn't preclude anything.''

Whether he accomplishes all that he sets out to do is doubtful, said Thomas, the political science professor.

The public is unlikely to get behind a tax plan unless the state is in a financial crisis, and the Legislature is unlikely to back one in an election year, Thomas said.

In this November election new redistricting boundaries have made 57 of the 60 seats in the Legislature up for re-election.

Opinions differ on whether Knowles will encounter more difficulty in accomplishing his goals this year.

The GOP-controlled Legislature may not feel the need to deal as readily with the outgoing Democrat governor, Thomas said.

''He's still got line item veto, and he's still got a certain amount of influence,'' Thomas said.

But Hammond -- who is backing Democratic gubernatorial candidate Fran Ulmer in 2002 -- said a lame duck governor can still accomplish much.

Hammond said he found it easier to accomplish his goals in his final years.

''I could twist the tail of the Legislature with no fear. They knew full well since I wasn't going to be around later, there was no need to try to distort what I was up to.''

There's been speculation that Knowles, 59, may run for the U.S. Senate, which could add to Republicans' reluctance to work with him.

''You don't want to give people good issues to run on,'' Thomas said. Of course, they also might want to avoid alienating a potential senator, he added.

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