Veto fight brews

Bagley nixes clarification of priorities

Posted: Tuesday, March 26, 2002

Borough Mayor Dale Bagley has vetoed a resolution of the Kenai Peninsula Borough Assembly that urged the Alaska Legislature to adopt a long-range fiscal plan, because it didn't call for spending cuts and ignored the potential positive impact of major projects like drilling in the Arctic National Wildlife Refuge and construction of a natural gas pipeline.

Bagley issued his formal veto notice in a letter to the assembly last Wednesday. A veto override could come at the April 2 meeting.

Approved March 12 by a 6-2 vote, Resolution 2002-030 was meant "to clarify" the assembly's legislative priorities for the benefit of borough lobbyist Mark Higgins, according to assembly member Bill Popp of Kenai.

Supporters said it put the borough on record as recognizing that cuts alone would not solve the state's growing gap between revenues and expenditures.

However, the resolution didn't specifically back any particular gap-bridging mechanism. Rather, it called on lawmakers to adopt a fair and sustainable plan that would provide financial stability and maximize return on investments.

Bagley said that lack of specificity was among the reasons he vetoed the assembly's message to the Legislature.

"The first problem is that nowhere in the resolution is there any language dealing with cuts to state government," Bagley said. "The state government we have is too large for our current population."

Suggestions that the fiscal gap be closed with taxes and the earnings of the Alaska Permanent Fund are premature. Alaskans want government cut first, he said. Voters were clear about that in 1999 when they voted overwhelmingly against capping the Permanent Fund Dividend, he said.

Today, there is a push to adopt a long-range fiscal plan, a "seemingly harmless concept" about which many know too little, Bagley said.

"Not everyone understands what the term 'long-range fiscal plan' means," he said. Proponents don't tell people that capping the dividend and raising taxes would be considered, he said.

Many Alaska House members, however, have said repeatedly since at least the end of the last session that all ideas for closing the fiscal gap would be on the table this year -- cuts, taxes and the fund earnings.

Assembly President Tim Navarre of Kenai promised a veto override attempt at the April 2 meeting. He'll need six votes.

"I believe the six votes that voted for the resolution are fairly strong in their positions and think it is important enough to ask the Legislature to make a decision today" on a fiscal plan, he said.

As for any lack of specificity in the resolution's language, Navarre said it wasn't necessary to spell out cuts or potential revenue streams in the text of the resolution.

Contrary to Bagley's point of view, discussion of a long-range plan has always centered on the need to consider multiple options to close the fiscal gap, including revenues as well as cutting state government spending, he said.

Bagley is wrong if he thinks the public is not getting the straight dope on what a fiscal plan might entail, Navarre said.

"He's reading something into it (the resolution) as if we were saying you can't cut government," Navarre said. "That's not what we're saying at all."

Bagley responded saying he's been to Alaska Municipal League meetings, and he rarely hears people there talking about cutting government.

"They talk about taxes and using the dividend," he said. "They don't want to cut government."

Navarre said Alaskans never voted specifically on a measure capping the permanent fund dividend. In September 1999, voters did go to the polls and turned down an advisory measure that proposed using the fund earnings to fund government.

It would have required limiting the divided to $1,700 in 1999 and 2000, and cutting it to $1,340 in 2001 after which it would grow again.

But that idea was part of a larger package calling for a balanced budget plan that required the state government to commit to a long-range fiscal plan, reduce spending, fund essential services from fund earnings only after dividends were paid, and leave the corpus of the fund untouched and inflation-proofed.

Lack of information doomed the measure at the polls,Navarre said.

"I disagree with that assessment," Bagley said. "I believe the majority voted no because they did not want to see the dividend capped."

As for ANWR and the natural gas pipeline, it is fine to look ahead at what might be, but revenues from those projects are still at least 10 years down the road, Navarre said. One can't rely on future opportunities while ignoring problems today, he said.

Different people simply see things differently, Bagley said.

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