Final budget debate shifts to long-term fiscal picture

Posted: Thursday, March 15, 2001

JUNEAU (AP) -- Final debate on the House version of the state's operating budget turned into a series of calls from both Republicans and Democrats for a long-term fiscal plan that would allow the state to spend more on crucial services and prevent a full-blown crisis a few years from now.

The $2.24 billion budget for the fiscal year that begins July 1 spends $72.6 million more than the current year's budget, but $60 million less than Gov. Tony Knowles proposed, according to the Division of Legislative Finance. Of the increase, $34 million -- or about half -- will cover increased debt payments.

''I think this was a pretty good compromise,'' said Rep. Eldon Mulder, R-Anchorage, co-chairman of the House Finance Committee and the bill's chief architect. ''It maintains critical services, but it is doing it in a modest and responsible way.''

Minority Democrats have criticized the Republican majority -- especially Mulder -- for not including big increases on public safety, education, health, child protection and alcohol abuse prevention proposed by the governor. The majority voted down more than $30 million worth of amendments on Tuesday.

Rep. Mary Kapsner was among several Democrats who rose to protest the cuts. Kapsner, D-Bethel, focused on money for disease prevention that would help villages in her rural Western Alaska district.

''My grandfather died of tuberculosis, and now my son, in 2001, is susceptible to the same disease because we aren't willing to spend a little more money,'' Kapsner said.

The budget passed 27-11, with all of the Democratic minority except Rep. Sharon Cissna of Anchorage voting no.

''There are positive things in that budget and there's also some gaps that I'm concerned about,'' said Cissna, who said she may change her vote when the bill is brought up for reconsideration Thursday.

Most of Wednesday's debate focused on the state's long-term financial future.

A stream of lawmakers from both parties argued for a plan to bridge the gap between state revenues and spending that threatens to drain a budget-balancing cash reserve within the next few years.

''This ship is on a course for the rocks,'' said Rep. Bill Hudson, R-Juneau. Hudson called for an end to years of budget cuts and a renewed focus on finding new state revenue. He supported using some of the earnings of the Alaska Permanent Fund and ''some sort of a tax that taxes money out of the public's pocketbook.''

Without such a balanced plan, Hudson argued, the budget gap will eventually force lawmakers to spend money from the Permanent Fund to balance the budget.

''When that happens, the Permanent Fund dividend is history,'' Hudson said.

Low oil prices two years ago prompted lawmakers to propose a plan to balance the budget with the earnings of the fund. The idea was soundly rejected in a statewide advisory vote. That vote, and higher oil prices, have kept the issue in the background since.

Rep. Andrew Halcro, R-Anchorage, called on his colleagues to move swiftly, before next year's election-year politics derail any momentum for a solution.

''It's not just an election year,'' Halcro said. ''It's a gubernatorial election year, with half the people in this building wanting to be governor.''

Rep. Beth Kerttula, D-Juneau, said lawmakers are reluctant to spend money on crucial services because Alaskans pay no income tax and no state sales tax and get an annual check from the Permanent Fund.

She paraphrased Pogo, the legendary Walt Kelly cartoon possum who couched political satire in folksy language.

''We have met the enemy, and she is us,'' Kerttula said.

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