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Q & A on State of the State

Posted: Monday, January 26, 2004

Editor's Note: The following was prepared by Gov. Frank Murkowski's office in response to questions received following the governor's State of the State address on Jan. 13. Several questions and answers will be printed this week.

Q.Why did the governor call for a conference of Alaska leaders to address whether to use a portion of the permanent fund income to maintain essential public services in his State of the State speech?

A. During his State of the State speech on Jan. 13, Gov. Murkowski reported on the four elements of his fiscal plan on which he had been working since taking office:

Obtain new revenue from natural resource

development;

Control state spending;

Local responsibility; and (

User fees.

At the State of the State speech he announced a fifth element potential use of a portion of the income from the permanent fund to maintain essential public services.

Gov. Murkowski called for a Conference of Alaskans to bring focus to this fifth element. In his State of the State address the governor said Alaskans are in the position to choose between two very different fiscal paths.

He said, "One is the easy road avoid the issue, do nothing and wait. The other is the course I propose."

The Conference of Alaskans is a way to bring knowledgeable, thoughtful Alaskans together to provide clear advice on what role permanent fund income should play in Alaska's future. The governor said that it is not his place to dictate that role, but rather to facilitate providing the Legislature the best thinking of Alaskans so that the Legislature can put the issue on the November 2004 ballot for a vote by all Alaskans.

Specifically, the Governor is asking the conference:

Should the use of income from the permanent fund be limited by the Constitution to 5 percent of the fund's value, as the permanent fund trustees have proposed?

Should a portion of the income of the permanent fund be used for essential state services, like education?

Should the use of the income of the permanent fund for dividends and possibly for other purposes be determined annually by the Legislature, as is currently the case, or dedicated in the Constitution?

Should the state maintain a minimum balance in the Constitutional Budget Reserve to stabilize state finances against fluctuation in oil production or prices?

Like the Statehood Convention a half-century ago, the governor believes the issue before the state is of monumental importance to all Alaskans. The Conference of Alaskans is intended to put the spotlight on the issue and its

surrounding debate and discussion to assist Alaskans to better understand the proposals being put forward.

Q. How much will this event cost?

A. The intention of the governor is to hold expenses to a minimum. The conference conveners have been in contact with former delegates to the Alaska constitutional convention as well as officials from the university. It is the state's intention to keep costs down by using university facilities, buses, etc., and volunteers. The delegates will not be paid for their services. The

conveners will report the total costs to the public and the conference will be subject to the state's strict procurement standards.

Funding for the conference will come out of the current governor's office budget account. No money will be taken from any public service. Conference costs are currently estimated to be about $274,000 or about 45 cents per Alaskan, with the majority of the cost going for delegate travel, food and lodging.

Every effort will be made to reduce these costs.

Q. How can the state justify spending money on this when the state has fiscal problems and is cutting programs?

A. The governor has asked that the conference costs be kept to the minimum. The conference was established to get a result and it's necessary to make an investment in order to get a return. The governor believes it is worth the cost to get a broad-based recommendation from a knowledgeable, bipartisan group of Alaskans on one of the major decisions that will face the state in this decade. He considers it to be a small amount when compared to the issues at stake and

the potential impacts upon Alaska society.

Q. Why isn't the Legislature just addressing these issues directly? Is the governor trying to box in the Legislature?

A. Given the different schedules and priorities of each body, the governor is concerned that this issue will keep being pushed back and will be intermixed with the budget and other issues the Legislature must address. If that occurs, the issues referred to the conference may not get the attention they deserve. Gov. Murkowski said this issue needs the single focus and early attention a March 1 special session of the Legislature will bring.

The Legislature also needs answers and advice to help these questions. The administration has no intention of "boxing" in the Legislature or dictating to it. The final decision on whether to place a constitutional amendment before voters still belongs to the Legislature. Likewise, the authority of the Legislature to tax and to place a constitutional spending limit on the ballot is in no way hindered by the conference. The public, the Legislature and the governor can benefit from the collective advice of thoughtful Alaskans in response to the questions posed to the conference by the governor.

Q: The chair and conveners are being asked to select delegates that represent Alaskans, however, none of them were elected. How can the governor assure a representative group?

A: In other volunteer work, the chair and many of the conference conveners have spent countless hours working with Alaskans to try to build a consensus on some type of a fiscal plan. Some of the members served in elected office. Some have served and are serving as permanent fund trustees. The governor has called for statewide representation from all walks of life people who will work to build a consensus that all Alaskans can respect. Finally, the governor is

proud of the many individual Alaskans who are not elected that have made a major contribution to community decisions and to whom others look for advice and leadership.

Q: How can the governor assure that the conveners will choose a nonpartisan conference?

A: The conference conveners themselves represent a cross section of political affiliation. Gov. Murkowski has said the Republican, Democrat and non-partisan members have to work together in the best interest of all Alaskans to name nonpartisan members. It will be up to each Alaskan to assess whether these goals were met in the overall make-up of the conference.

Q: How did the governor determine whom to ask as the conveners? What makes these persons qualified?

A: The governor's objective in choosing the co-chairs was to choose Alaskans who had spent time wrestling with permanent fund issues and legislative budget issues. He chose people he believes understand and can follow through on his charge to the conference: to answer the four questions and not to wander off into other issues. The governor's Web page www.gov.state.ak.us contains biographical information on all of the conference conveners.

Q: Why was Fairbanks chosen for this event? Would it not be less expensive in Anchorage?

A: The decision to convene the conference reflects the historic nature of the recommendations they are asked to make. The governor said he could think of no place better than to convene the conference at the site of the state's Constitutional Convention.

Wisdom guided that convention's 55 delegates to leave politics at the door and make decisions that were to the benefit of the state. The governor said he is hopeful that by bringing Alaskans together at the same site and with the same sense of common purpose, Alaska will achieve a similar result.

Q: Why is this conference meeting taking place on such a short schedule?

A: The governor set an accelerated, highly publicized process to help capture Alaskans' attention and help them focus on the complex issues before the Legislature becomes enmeshed in the budget this legislative session.

Also, because the proposal to use a portion of the permanent fund income for public service requires a constitutional amendment, voters would have to approve it in a general election. The governor believes waiting for the 2006 election might be too late to maintain essential public services at existing levels.

Q: Does the governor have the authority to call a special session during the regular legislative session?

A. The authority for special sessions is set out below:

n "Special sessions may be called by the governor or by vote of two-thirds of the legislators. The vote may be conducted by the legislative council or as prescribed by law. At special sessions called the governor, legislation shall be limited to subjects designated in his proclamation calling the session, to subjects presented by him, and the consideration of bills vetoed by him after adjournment of the last regular session."

Alaska Constitution, Article II, Section 9

"Whenever the governor considers it in the public interest, he may convene the legislature, either house, or the two houses in joint session."

Alaska Constitution, Article III, Section 17

The above powers are not limited in any way as to time and purpose a court would likely defer to the judgment of the governor as to whether his purpose satisfies the public interest.

On Tuesday: Questions and answers related to use of the Alaska Permanent Fund.



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