Fiscal action cannot wait

Legislative decisions needed this session to ensure state on right path

Posted: Wednesday, March 24, 2004

It was just a little more than six weeks ago when the Conference of Alaskans completed its work in Fairbanks. I remain proud of the group's thoughtful debate and have been working since then with the Legislature on legislation that reflects the spirit of the resolutions the conference adopted.

The conference resolutions supported converting the permanent fund payout calculation to an endowment model; using permanent fund income for essential state services such as education after dividends are paid; placing the payment of dividends in the Constitution; and maintaining a prudent balance in the Constitutional Budget Reserve Fund.

As I had hoped, the conference's recommendations have provided a springboard for the Legislature to focus on how to bring long-term

stability to the state's finances. This is to provide the conferees, as well as all Alaskans, a status report on where we are today.

When I called for the conference in my January State of the State speech, I also called the Legislature into special session on March 1. I did this to ensure the Legislature would take the conference's recommendations seriously. I later agreed to withdraw the special session call after legislative leaders assured me they would take up the recommendations in a serious fashion in mid-March. I'm pleased to report that this is being done.

Both the House and Senate Finance committees currently are working hard on various elements of a fiscal program. Proposals include new revenue measures, spending limits and how permanent fund income could be used to help pay for state services as well as dividends.

Last week the Senate Finance Committee devoted its full attention to these issues. To emphasize the importance of these issues to the state, I testified before the committee to urge a resolution of these issues before this session ends.

The committee also heard a report from Conference of Alaskans Chair Mike Burns on the conference and its resolutions. First National Bank Alaska President Dan Cuddy offered comments on the need to close the fiscal gap in order to bring certainty to the state's economy so the private sector can invest with increased confidence in Alaska. Individual senators discussed legislative proposals and other ideas on the role the permanent fund could play in protecting essential public services while continuing to pay dividends. Alaskans from around the state offered public testimony on their own ideas and the need for action this session.

On the House side, the House Special Committee on Ways and Means has done a great deal of work over the year, working through a number of revenue proposals. The effort is proving very helpful as the House enters the final stretch.

Several committees are moving pending legislation. The House leadership's plan is to get all potential legislation to the Finance Committee where a final package can be ironed out.

While it's beneficial to have these discussions taking place, in the end the only thing that will matter is what gets passed. Alaska's fiscal future is not a partisan issue. It will take Republicans and Democrats working together to come up with the best resolution.

If it is decided that a solution requires amending the state's Constitution, a two-thirds vote in each house will be needed to place an amendment before voters this November. The House leadership is optimistic that a package can get the necessary votes to pass this session. We will need the same support in the Senate. I urge Alaskans to follow the debate closely and let your legislators know how important it is to get a solution for Alaska's fiscal future during this session.

I continue to insist that action be taken this session. Some are suggesting that it isn't necessary to act this session because oil prices are high. That would be unwise because the reality is that in spite of record high oil prices, the state still is spending more than its income.

The time has come to finally answer the question that has been plaguing Alaska's finances for more than a decade. Alaskans expect the Legislature to take action this year no matter how politically difficult it may be.

Alaskans deserve no less. Let your legislators know that you expect them to take responsibility for making the right decisions for Alaska's tomorrow.

Gov. Frank Murkowski is a Republican who was elected governor in 2002.

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