JUNEAU (AP) -- A bi-partisan caucus wrestling with the state's budget deficit wants to raise $1 billion from new taxes, spending cuts and possible changes in the Permanent Fund this session.
The Fiscal Policy Caucus agreed Tuesday to a target this session that would help close the state's so-called ''fiscal gap.''
Now the work begins to devise specific recommendations to do that.
Rep. John Davies, D-Fairbanks, said a subcommittee is expected to devise specific tax recommendations by early March. Davies is a co-chairman of the caucus. He said the group intends to bring legislation with tax recommendations and possibly changes in the state's Permanent Fund Dividend program by about March 20.
Alaska's budget is expected to be about $865 million short this fiscal year and the deficit is expected to grow to $1.1 billion by fiscal 2003.
A drop in oil royalty revenues -- which accounts for about 80 percent of the state's income -- has required lawmakers to use the state's Constitutional Budget Reserve to balance its budget.
But that reserve account will be down to $2.3 billion by July and is expected to be drained by 2004.
Davies said the caucus wants a plan that eventually raises $1 billion over several years and continues to preserve the state's reserve five years later.
The Fiscal Policy Caucus met over the summer to devise a package of revenue generating measures to close the state's gap and preserve the fund.
The caucus offered several suggestions such as an income tax, sales tax, increase in the alcohol tax and use of Permanent Fund money, but was unable to agree on a specific plan.
The subcommittee begins meeting on Wednesday.
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