Murkowski's campaign rhetoric collides with budget realities

Posted: Monday, March 10, 2003

JUNEAU (AP) -- The rosy political rhetoric that helped Gov. Frank Murkowski win election last November collapsed this week under the weight of the state's budget woes.

The Republican governor said often during the 2002 campaign that he would not support taxes, specifically those like a broad based income tax.

But in his first budget, rolled out for the Legislature on Wednesday, Murkowski is asking for more than $113 million in taxes and fees.

Alaskans would pay at the pump through a 12-cent-per-gallon hike in the state's motor fuel tax; more in business license, vehicle registration and title fees, and a $10 surcharge for each new studded tire to navigate slick wintery roads.

The Legislature must also chose between a $100 per worker tax -- which the governor says will help fund education -- or a seasonal sales tax imposed during the summer months.

''The governor's rhetoric hasn't matched his budget,'' said Sen. Kim Elton, a Democrat from Juneau and one of many accusing Murkowski of breaking campaign promises.

Elton detailed specific comments the governor made during the 2002 campaign in which he defeated Democrat Fran Ulmer by pledging not to tax hard working Alaskans.

''I'm not going to rob hardworking Alaskans of their income. I'm not going to take it out of their pockets and put it in the deep pockets of state government,'' candidate Murkowski said during an October debate in Anchorage.

Ulmer, the lieutenant governor at the time, had often criticized Murkowski for not being candid about closing the state's chronic budget deficits. Ulmer proposed a ''parachute plan'' that triggered taxes when the state's budget reserve fell below $1 billion.

Murkowski said last year he would grow the state's economy through greater resource development and often poking at Ulmer by saying he would not support broad based taxes.

''The worst message we can send to capital investors is, 'we're going to tax the people,'' Murkowski said at a campaign forum in Kenai in August 2002.

Murkowski, who was often criticized during the campaign for not being specific, faced reporters on Friday arguing that last year he specifically promised no ''broad-based income tax'' and a pledge to leave the state's Permanent Fund alone.

''The reality is, we have to address a resolve of generating some revenue and I have not proposed across the board state income taxes nor have I proposed raiding the permanent fund,'' Murkowski said.

Less convincingly to some, he also maintained that most of his revenue proposals are user fees. The $100 tax paid annually by workers, which he intends to use for education funding, is a tax, Murkowski said.

''The rest of them are not, they are dependent on whether you use the business license or use the vehicle registration ... The seasonal sales tax is of course optional in the sense that if you're not out there spending a lot of money you are not going to be subject to it,'' Murkowski said.

Peppered with questions about what was said during the campaign, Murkowski insisted he kept his promise.

''You can go down the line and dig up all the old rhetoric and all the old campaign material you want, we have not laid down a state income tax, we have not raided the permanent fund,'' Murkowski said.

But even some Republicans couldn't help but criticize the governor's apparent shift in course. For Rep. Vic Kohring, a Republican from Wasilla and a staunch budget hawk, the November gubernatorial election was a referendum on taxes. Murkowski promised none and that's what voters wanted, he said.

''I see some deviation from that,'' Kohring said, listing a motor fuel tax, seasonal sales tax and $100 head tax. ''All three of these are very clearly taxes and he ran on a platform not to raise taxes.''

Some Republican leaders -- who still defend the governor's campaign pledge of no income tax -- weren't buying his arguments.

''A user fee is a tax,'' said House Majority Leader John Coghill, R-North Pole. ''So I guess is the public open to that discussion? Is the Legislature open to that discussion? It remains to be seen.''

But Murkowski has put lawmakers in a tough position by fulfilling another important campaign promise of limiting state spending.

The GOP-controlled Legislature lays claim to having cut $250 million from former Democrat Gov. Tony Knowles' budgets.

Murkowski is asking them to go lower, submitting a fiscal 2004 budget that reduces general fund spending by $55 million more.

In his first year, Murkowski sought to cut state spending and take no more than $400 million from the state's dwindling Constitutional Budget Reserve. His budget draws only $393 million from that reserve.

Alaska relies on oil for about 80 percent of its general fund spending and uses the state's $1.9 billion budget reserve to make up shortfalls. But declining oil production and too many deficits have put the fund on pace to be empty by 2005, according to state revenue projections.

During the campaign, Murkowski said he would cut spending to extend the life of the reserve account during the early years and institute policies that spur oil development in the later years.

But he's proposing painful cuts, slashing about 200 jobs from the state payroll and reducing state support for education and municipal assistance. And he's vowed to use his line-item veto power to keep lawmakers from taking more from the reserve account.

''I don't expect this think to come out the way we laid it down. But I do expect the Legislature to live within the targets,'' Murkowski said.

Republicans in the Legislature were once encouraged to finally have GOP control of the governor's office after Knowles left due to term limits.

But now the reality of Murkowski's campaign promises are causing lawmakers to pause.

''Whether the Legislature has the same threshold of commitment as the governor has, remains to be seen,'' said House Majority Leader Coghill. ''Until we have those hearings, I don't know how well in step we're going to be with the governor.''

Kohring, for his part, pledges to oppose the taxes and thinks the governor can cut deeper into state spending. ''I'm going to very politely fight him on it,'' Kohring said.

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