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Jan. 24, 2002 Alaska Newspapers Inc. on Gov. Knowles proposed budget

Posted: Monday, January 28, 2002

Gov. Tony Knowles' plan to close the state's $1.2 billion fiscal gap shows how low we've sunk. Newspapers across the state have ballyhooed it, not necessarily because it will work, but because at least someone is trying.

From a practical perspective, Knowles' 2003 budget is grossly irresponsible. He proposed $400 million in new revenue, but he asks for at least $180 million in additional expenses, leaving a net gain in year one of the phase-in plan that still leaves us $1 billion short.

''That $400 million is not going to get us very far very fast,'' Rep. Eldon Mulder, R-Anchorage, rightfully said after Knowles' State of the State address. Mulder added that Knowles' expenses will actually reach almost $300 million if uncertain federal support for Medicaid and anti-terrorism measures fall through.

The little that Knowles' 2003 budget does accomplish is sound. It would raise $350 million from income taxes. Alaska and non-Alaska residents would pay 18 percent of their federal taxes to the state, a proposal that correctly taxes the rich more than the poor.

It would raise another $30 million from increased alcohol taxes, which would have the additional benefit of decreasing alcohol-related crime. It would also collect $20 million from a passenger fee on cruse ships, which currently pay no state tax while polluting our waters and air.

But the plan is woefully inadequate otherwise. Knowles calls it a three-year plan, but addresses only the first year. He leaves the final two years for other politicians to figure out once he's left office.

He doesn't call for a state sales tax, as he should, and he predictably proposed no additional taxes on the oil industry, the ''goose that laid the golden egg.''

Most importantly, taking into account his proposed expenses, he's actually proposing a five-year plan that will virtually eliminate the $2.6 billion Constitutional Budget Reserve.

Fiscal responsibility is not a partially thought-out solution that doesn't do what it promises. Unfortunately, it's all we have.



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