Municipal League calls on Legislature to devise a plan this year

Posted: Friday, January 25, 2002

JUNEAU (AP) -- Alaska's municipal leaders have called on the Legislature to devise a long-range fiscal plan this year to close the state's budget deficit.

But they were also quick to note that state lawmakers should not consider a sales tax to close Alaska's projected $1.1 billion deficit.

Anchorage Mayor George Wuerch said many cities and boroughs impose a sales tax and the state should not impede on their ability to raise funds.

Mayors from several communities met in Juneau on Thursday for an Alaska Municipal League conference and to roll out their legislative priorities for this session.

At the top of the group's list was urging lawmakers to find a solution to the state's chronic budget shortfall. Alaska's budget deficit is expected to grow to $1.2 billion in three years. City leaders said that threatens their ability to attract jobs and businesses.

Gov. Tony Knowles has offered a plan that would impose an income tax and impose a $30-per passenger cruise ship tax and increase the state's alcohol tax.

Knowles urged lawmakers to raise $400 million a year for three years to close the state's so-called ''fiscal gap.''

The Municipal League did not endorse Knowles plan, but said it supports reimposing an income tax in Alaska. The group, which represents 142 cities, boroughs and municipalities, also supports imposing caps on state spending.

Republican leaders in the state House and Senate have said that spending caps on state government will be part of any plan that emerges this year. But so far, neither house has devised a comprehensive plan to close the state's fiscal gap.

Senate President Rick Halford said this week there is no support in his caucus for an income tax. Halford said the public wants lawmakers to hold the line on the state budget and to approve a constitutional limit on spending.

Jack Shay, Ketchikan Gateway Borough mayor and president of the league, said lawmakers should put aside political ambitions to make significant steps toward closing the fiscal gap this year.

''Those with any kind of courage will step up,'' Shay said.

The league favors devising a plan that gradually closes the gap over successive years. Knowles' income tax would raise $350 million annually and the total package would close the gap in three years.

Mike Scott of Anchorage, a member of the league's legislative committee, said closing the gap in five years is more realistic and that a proposal that raises more than $100 million would be a good step.

''The shock on the economy ... needs to be gradual,'' Scott said.

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