House Dems, Republicans join forces on fiscal plan

Posted: Tuesday, January 29, 2002

JUNEAU (AP) -- The entire House of Representatives will meet in a closed caucus to try to come up with a long-term fiscal plan that can make it through the Legislature this year.

Democrat and Republican House leaders said Monday they believe the need for such a plan is so critical they are willing to drop partisan politics and tackle the issue together.

''This is an Alaska issue,'' said Minority Leader Ethan Berkowitz, D-Anchorage. ''It's not a Democratic issue. It's not a Republican issue.''

Majority Leader Jeannette James, R-North Pole, said they will be looking for a strategy that can win approval not only from the House, but also the Senate and the governor.

The state for most of the past decade has balanced its budget by drawing funds from the Constitutional Budget Reserve -- a state savings account. But state Revenue Department officials project that fund will be drained in about two years.

The Fiscal Policy Caucus, a group of Democrats and moderate Republicans, has been pushing for the Legislature to adopt a plan this year to use other sources of funding to pay for state services.

They say the Legislature needs to act now to avoid more painful tax increases and cuts in state services down the road.

During meetings this fall the caucus proposed a number of options, including an income tax, sales tax and use of earnings from the Permanent Fund, the state's $24.8 billion oil-wealth savings account.

Other possible elements they identified include a cruise ship head tax, an employment tax, increasing alcohol and motor fuel taxes and imposing a spending limit.

The same package of proposals will be on the table for the joint caucus, said House Speaker Brian Porter, R-Anchorage.

The legislators faced sharp criticism from the news media for planning to meet in private. The state's open meetings act allows closed caucuses to discuss strategy.

James said lawmakers need the closed meetings to make it easier to reach a consensus ''without lots and lots of flak from you and the general public.''

''When you include the media and all of the public, it gets so muddled from the various different ideas and e-mails and phone calls that we get condemning us for doing something we've only talked about,'' said James.

Rep. John Davies, D-Fairbanks, said individual bills required to implement a plan will have to go through the normal open committee process and be voted on in public despite the private talks.

Porter said lawmakers need to meet privately initially so they can talk candidly without fear of every remark being reported in the news media.

Many legislators have staked out positions of never agreeing to a tax or spending permanent fund earnings.

''We're going to have a frank discussion and try to convince people who have made those kind of statements that we will help them in the best way possible to perhaps have a change of mind,'' Porter said.

The first meeting of the joint caucus will be Wednesday.

Senate Republican majority leaders have expressed little interest in adopting a long-term plan this year.

Sen. Dave Donley, co-chairman of the Senate Finance Committee, has said he doesn't believe the public will agree to any major taxes or use of Permanent Fund earnings until the Legislature adopts a constitutional spending limit.



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