Lawmakers take steps toward closing budget gap, but is it enough?

Posted: Friday, February 08, 2002

There was lots of news out of Juneau this week on issues related to closing the state's almost billion dollar budget gap. That's how it should be. If anything else is the priority, lawmakers are working on the wrong thing.

However, the variety of proposals and the differences of opinion regarding those proposals are enough to make Alaskans' eyes glaze over. Some of the proposals and the questions they raise, however, deserve a second look and some comments. A sampling of the news and some comments:

The news: The House Judiciary Committee approved a measure -- Senate Joint Resolution 23 -- which would require a simple majority vote of the Legislature to increase new state spending by 2 percent. However, legislators could increase spending by up to 4 percent of the previous limit with a three-quarters vote of both houses. If it makes its way through the entire legislative process, the resolution would be put before voters in November. If approved, voters also would reconsider it in 2006.

Some comments: Limiting state spending is a good idea. But a constitutional cap may have unintended consequences, according to some economists. For example, such a cap ignores future population and cost-of-living increases. It also could force the state to forego federal dollars that require matching funds from the state. Is there another way?

On the upside, the limit would be reconsidered by voters in 2006. It gives Alaskans a chance to measure the pluses and the minuses of a spending cap.

The news: An alcohol tax increase bill became part of a larger tax package, which includes income and sales taxes, but then the package was put on hold.

Some comments: No matter how much legislators cut the budget or how much they limit spending, the state still needs new revenue to get out of the fiscal hole it has dug for itself. Like it or not, new taxes are going to be needed. The question is, should those taxes be part of a comprehensive package or passed piecemeal?

Baby steps are better than no steps at all. Still, a comprehensive tax package allows legislators to spread the pain -- and do so in a way that's easier to understand. The fear, however, is legislators won't pass a comprehensive tax package that does spread the pain, and Alaskans won't be any closer to closing the fiscal gap at the end of the legislative session.

The news: Senate President Rick Halford, R-Chugiak, said it is unlikely any major tax measure will pass the Senate. Halford told The Associated Press the public doesn't support significant tax increases and is not convinced the state's budget problems are real. To win the public's support for taxes, across-the-board cuts in state services and spending controls are needed, he said.

Some comments: Sen. Halford may not think the public is ready for taxes, but we think he's wrong. Lots of Alaskans understand the dire straits the state is in and would rather experience the pain of taxes than the pain of reduced state services. The fact is, as long as Alaskans continue to get fat permanent fund dividend checks, many of them will refuse to believe the state has a budget problem. The longer legislators wait to institute new taxes, the more it's going to hurt when they finally do, and the more likely it is that dividends also will be hurt.

The bottom line: If Alaskans want their cake and to eat it, too, they will have to start paying for it. And it really doesn't matter if all Alaskans agree there's a budget problem; lawmakers know there's a problem. It really is incumbent on them to take appropriate action -- whether Alaskans agree or not.

The news: The House passed a measure, House Bill 349, which would require state departments to rank their programs in order of importance.

Some comments: The idea of ranking state programs by order of importance helps Alaskans reconsider what they value. Businesses do such things on a regular basis; why shouldn't state government? The danger, of course, is every Alaskan's priority list is different. All of our favorite pet projects are priorities.

The news: The House approved $6 million in emergency marketing money to help the state's tourism industry counter the effects of the Sept. 11 terrorism attacks. Reps. Ken Lancaster, R-Soldotna, and Drew Scalzi, R-Homer, voted against the measure. Lancaster argued the state first needs to have a long-term fiscal plan before increasing spending.

Some comments: Lancaster makes an excellent point. Coming from an area that depends heavily on tourism, Lancaster and Scalzi made a courageous stand, one that's consistent with their positions that the state needs a long-range financial plan.

This week's vote on the tourism funding illustrates the fine line lawmakers must walk. Whatever they do is going to be criticized. Whatever they don't do is going to be criticized more.

Lawmakers, however, deserve credit for the steps they are taking, but it's too soon to tell if it's enough to bridge the gap.



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