Chenault: Cuts key to budget fix

Posted: Tuesday, January 15, 2002

Alaska lacks a long-range fiscal policy because its oil wealth has always been there to undermine the political will needed to create one, Rep. Mike Chenault said in an interview Monday shortly before the opening gavel of the second session of the 22nd Legislature.

"There's always been something to bail them out," Chenault said of state lawmakers.

The Alaska Department of Revenue recently predicted a budget deficit of $865 million by the end of the fiscal year and a greater shortfall the following year.

"Maybe there is something that bails us out of the financial crisis now, but there may not be," Chenault said.

Legislators will look at every option, but spending must be reduced, Chenault said.

"People sent us down her to make the hard decisions. People in my district want us to get spending under control."

If lawmakers can't agree on an overall fiscal plan this session, it is likely that parts of one will be adopted, he said, but he remained less than sanguine about the legislative appetite for an overall plan.

"I don't believe we'll come out of here with a long-range plan to get us out of the financial straits we're in, because I don't believe there is an answer for it yet," he said. "The only way you can come up with a comprehensive plan is to have everything on the table and then start dissecting it and see what you can live with and what you can live without."

Chenault said he will look more at trimming expenses than at generating new revenues, but he acknowledged that taxes of some sort are possible.

"I don't want to raise or institute any new tax, but the reality is there probably are going to be some, along with cuts or better efficiencies in government."

Efficiencies may include cuts to government departments, but just what form those cuts might take "is anybody's guess right now," he said.

Like other lawmakers, Chenault said Gov. Tony Knowles' Homeland Security Initiative would be scrutinized. The $40 million Knowles wants in state spending -- to match another $40 million from the federal government and $20 million more from other sources -- is a lot of money to spend, he said.

"Granted, since Sept. 11 our world has changed somewhat, but this is something we need to look at hard and heavy to see what we can justify. There are some things we need to do, but we don't need to spend that amount," he said.

Knowles also wants to spend $200 million on school maintenance and construction projects, but he has proposed selling general obligation bonds to finance the projects. Republican Party leaders have lambasted the governor for proposing additional spending. Chenault said, however, that the Legislature would have to at least look into raising the revenue through bonds.

"I do believe in education, and I think we do need to spend more money on education," he said. "What that amount is going to be is up in the air. It's an election year and education will be one of the hot topics."

Chenault, who spent a year on the Kenai Peninsula Borough School District Board of Educa-tion just prior to going to Juneau, said he favors increasing the foundation formula through which school operations are financed by the state.

He also will focus some attention on combating drug abuse. House Bill 140, which Chenault sponsored, would make possession of gamma-Hydroxybutyrate, or GBH, illegal. GBH is sometimes referred to as the "date-rape" drug because of the incapacitating effects it has on the people who ingest it.

Another drug relatively new to the black market is Oxyco-done, a painkiller found in particularly high doses in a tablet product call Oxycontin. It is highly addictive. Chenault said he'd like to see better controls put on its accessibility, too.

Lawmakers are waiting to see the results of a $100 million study on the prospects for a natural gas pipeline being conducted by Phillips Petroleum, BP and Exxon Corp. It is due out around March. Chenault said the companies have indicated they would need about 15 percent return on their investment, but the preliminary numbers suggest only about 12 to 13 percent may be possible.

"That may be negotiable," Chenault said.

Also high on his list of priorities is the state of the salmon fishing industry on the Kenai Peninsula. Farmed salmon produced in Chile, Norway and other places has lowered the price of salmon to the point where it may no longer be profitable for many fishers. However, he believes Alaska's wild stocks can be marketed to meet the real demands of the organic foods market.

"If fishermen can handle the fish to add quality, they can find the niche markets," he said.

Asked if he thought the state should buy back fishing permits to reduce the numbers of fishers, Chenault said he doesn't know where the money for that would come from.

"If it is a viable option and if it is what commercial fishermen want to do to make it into a profitable business, we need to look into that option," he said.

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