Economic stimulus proposals include natural gas line, railroad, utility plants Variety of bills attack fiscal gap

Editor's Note: The Kenai Peninsula's legislative delegation has been invited to keep residents informed of what's happening in Juneau in this column, which runs weekly during the legislative session. Peninsula lawmakers take turns writing the column.

The finance subcommittees (mine being Administration and the Department of Community and Economic Development) are reviewing programs to cut what is equal to 10 percent of the department's budget. With this methodology, we should be able to save $100 million.

I introduced House Joint Resolution 5 that would limit the sessions to 90 days. I will attempt to amend it to where if the Legislature has not completed its work in 90 days, legislators work free!

There are many pieces of legislation that would institute new taxes as well as reinstate the income tax. These are meant to eliminate what many call the "Alaska Disconnect," in that residents pay nothing and receive a resource-driven permanent fund dividend check every fall.

There are also bills in to change funding sources from the general fund to the earnings reserve account such as House Bill 20 -- the community dividend approach to sharing resource wealth with communities instead of the municipal assistance and safe communities programs now used. HB 20 sets up a formula-driven mechanism to use a portion of the earnings reserve after paying the dividend and inflation proofing the fund.

The shock absorber of this is the Constitutional Budget Reserve account, or savings account, which will run dry in 2004 if we do nothing. The Constitutional Budget Reserve was established as a savings account from oil producer settlements on taxes and other litigation. There is no more pending litigation, so there are no more funds flowing to this account other than interest earnings.

Our other shock absorber is the earnings reserve account, which is excess earnings from the permanent fund corpus after dividends are paid and the fund is inflation proofed. It will be the next to go if we do nothing.

An economic stimulus plan includes the Legislature working on proposals for an Alaska Highway natural gas line. Most would like to see a railroad built at the same time.

The Department of Transportation has roughly a $350 million dollar highway budget for construction and upgrades to our national highway system -- the bulk of the money, 93 percent, is federal funds.

I have introduced House Bill 175 to upgrade utility plants and power lines and to help some failing communities to retire debt valued at some $50-plus million. This is money that was put away in 1986 for energy projects.

The missile defense system is already issuing contracts and beginning work in Delta. That work is deemed to be in $100 million plus area. It will create 250 jobs this year and ongoing for several years. There will be upcoming work at the launch site in Kodiak, as well.

The Legislature is working on a general obligation bond package for schools that will spread money and employment to building and renovating in schools all around the state.

The Alaska Railroad has an aggressive capital budget for track straightening, ties, track replacement and intersection improvements up and down its corridor -- $100 million plus a year.

The oil and gas industry has an aggressive schedule on the Kenai Peninsula in exploration of reserves for oil and gas. In addition, it already is in the permitting process for a gas line to the lower peninsula!

So, in conclusion, we are going to do some things we all are not going to like this session, but Alaska must have a vision of where it wants to go, goals to aim for and work to achieve (a fiscal plan), and I believe most of us in the Legislature are working toward that solution!

Rep. Ken Lancaster is a Republican from Soldotna.