Public weighs in on budget plan in House Finance

Posted: Thursday, March 14, 2002

JUNEAU (AP) -- From Dillingham to Fairbanks, Alaskans spoke up about proposed budget cuts now under consideration by the House Finance Committee.

The committee has scheduled two days of public meetings about its proposed $2.2 billion operating budget that makes deep cuts in some state services.

Among the cuts are less money for Alaska State Troopers, eliminating the state's Division of Subsistence and cuts in transportation, social services and other areas.

The House Finance Committee is proposing a ''hold the line'' budget that spends less than this year's spending plan. It's part of an overall plan to find a way to close a projected $1.1 billion budget shortfall in fiscal year 2003.

Many Alaskans reacted bitterly to the cuts that would reduce the number of nurses, social workers and other state employees.

''We are basically in the process of deconstructing government in Alaska,'' said Susan Drathman, who called in via teleconference from Homer.

Drathman and a number of other residents calling into the committee hearing from various places in Alaska said they were ready to pay taxes to support state government.

''We need to do the hard job of securing new revenues and give up the illusion that there's a lot of fat in the state budget,'' she said.

Ginny Espenshade, of Homer, said lawmakers opposed to a tax plan ''underestimate our willingness to pitch in and fix the problem.''

House Finance Committee members heard testimony from residents and officials in Dillingham, Homer, Seward, Valdez, Cordova, Kenai, Kodiak, Bethel and Fairbanks on Wednesday.

The committee planned to hear testimony on Thursday from Juneau, Nome, Kotzebue, Barrow, Haines, Delta Junction, Anchorage and the Matanuska-Susitna Borough.

A bi-partisan group of lawmakers have been pushing both the House and Senate to devise a long range plan that raises revenues to fill the state's budget gap.

The Fiscal Policy Caucus is proposing an income tax, a change in the Permanent Fund Dividend payout, an increase in the state's alcohol tax and a $30 head tax on cruise ship passengers.

Rep. Ken Lancaster, R-Soldotna, serves on the Fiscal Policy Caucus. Lancaster said he was heartened to hear support from residents on a statewide tax to support state government.

''It's nice to hear real folk testifying. It makes a difference,'' Lancaster said.

The caucus is pushing for a a 4 percent income tax based upon federal taxable income to raise $360 million.

A Permanent Fund payout change would base the annual payout on the average market value of the fund and its earnings, splitting the proceeds 50-50 between dividends and government.

In the first year, the overall payout would be 7 percent, above the 5 percent limit that the permanent fund corporation says would ensure inflation-proofing. That would yield $875 million each for dividends and government. It drops to 6 percent in the second year and then 5 percent in the third.

Many residents affected by cuts to state government also objected to the House Republican budget plan. Residents called for full funding of education and the ferry system and restoring cuts in public safety and social service program.

House Finance Co-Chairman Eldon Mulder, R-Anchorage, said some of the testimony is a result of Gov. Tony Knowles administration ''crying wolf'' to various special interest groups.

Mulder has vowed to pass a ''hold the line'' budget out of the House and then begin taking on a plan to raise state revenues.

The Fiscal Policy Caucus had been pressuring House leaders to have a tax plan to the floor by March 20.

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