Fiscal Policy Caucus provides fine starting point for Legislature

Posted: Sunday, January 13, 2002

When the Alaska Legislature convenes on Monday, it will face one issue that overwhelms all others in importance: the state's $900 million-plus fiscal gap.

Nothing else legislators do -- or don't do -- is likely to matter if they don't fix this one problem. It's not an exaggeration to say the future of Alaska hinges on this one issue.

Alaskans can be grateful that a number of legislators recognize the gravity of the problem. A bipartisan group of them have been working since early last year as the Fiscal Policy Caucus to come up with solutions. After the legislative session ended last May, these legislators returned home to talk with their constituents more about the problem. Legislators and other state officials provided information and listened to Alaskans' ideas about how to solve the problem. Then, members of the caucus took what they had heard to a retreat late last year to put together a starting point for discussion in the legislative session that begins this week.

The answers they came up with are not easy -- because there is no easy solution. Many of the proposals won't be popular. Not every member of the caucus agrees with all parts of the draft plan that's been proposed. That's OK, because their work provides an important stepping stone -- make that milestone -- in getting Alaska on firm financial ground.

The proposals, to be used as a framework for discussion, include:

Limiting permanent fund dividend checks to $1,250 for every Alaskan;

Using surplus investment earnings of the fund, after dividends are paid and the principal inflation-proofed, for state services;

Establishing a 3 percent income tax;

Establishing a 2 percent sales tax;

Increasing the alcohol tax by 5 cents a drink;

Increasing the gasoline tax by 5 cents per gallon;

Adding an employment tax of $100 a year to be used for schools;

Increasing the price of business and fishing licenses;

Instituting a cruise ship tax of $25 per passenger;

Raising oil and gas production taxes to bring in an additional $100 million annually;

Limiting the growth of state services to 2 percent a year, regardless of inflation or increases in population.

Ouch! Nevertheless, the solutions will be a lot less painful in 2002 than they will be if Alaskans try to delay a solution.

The Fiscal Policy Caucus deserves credit for its efforts on at least two fronts.

First, its work has modeled bipartisanship. The caucus serves as a great example for the entire Legislature on how to accomplish what's best for the state. Political junkies may be enthralled by partisan pettiness, but most Alaskans want the state's business accomplished without legislators and other elected officials of either stripe blaming the other side for the mess Alaska is in. And they want that work to get done in the open -- not behind the closed door of a party caucus.

It's worth noting that 24 legislators -- half the House and four members of the Senate -- participated in the Fiscal Policy Caucus' retreat Nov. 30 and Dec. 1. They included a mix of Republicans and Democrats. The Kenai Peninsula can be proud that its three freshmen legislators -- Rep. Ken Lancaster, R-Soldotna, Rep. Drew Scalzi, R-Homer, and Rep. Mike Chenault, R-Nikiski -- have been active participants in the caucus.

Legislators should be encouraged to carry the bipartisanship of the caucus into the broader workings of the House and Senate this session. While Rep. Bill Hudson, R-Juneau, has said he expects the House to act as one body on long-range fiscal issues this session -- exemplified by bipartisan cooperation and no closed meetings -- there's no reason the entire Legislature cannot conduct all of its business -- the public's business -- that way. Alaskans are not well served when the important issues of the state are not discussed in the open.

Secondly, the caucus deserves praise for taking some tough positions. The caucus proposals won't please everyone. There's a political risk involved in doing something, but members of the caucus realize they were elected to do tough work not to get re-elected. Ironically, those are the kind of people Alaskans should want to re-elect.

As the session begins, Alaskans should encourage legislators to finish what the Fiscal Policy Caucus has begun -- solving the state's most pressing problem in a spirit of bipartisan cooperation. With the caucus' formula, it could be the most productive session ever for the Alaska Legislature.



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