House committee overhauls tax measures

Posted: Friday, March 28, 2003

JUNEAU (AP) The House Transportation Committee overhauled two proposals by Gov. Frank Murkowski to raise taxes on Alaska motorists during a hearing Thursday.

A spokesman for the governor said the measures may now need a jump start.

Murkowski's proposal to impose a $10 fee on new studded tires sold in the state was amended by the committee to instead impose a $2 fee on all new tire sales.

The committee also engineered a plan to make Murkowski's 12 cent per gallon motor fuel increase hinge on a vote of the people in 2004.

Both measures were sent on to the budget-writing House Finance Committee on Thursday to await an uncertain fate.

Murkowski had not seen the changes late Thursday, but I don't think he would be happy with the turn of the worm,'' said press secretary John Manly.

House Transportation co-chair Beverly Masek, R-Willow, proposed an amendment to House Bill 156, which increases the state's 8 cent per gallon motor fuel tax.

The amendment requires funds raised by the tax hike go into a highway repair fund, which would violate the state constitution's prohibition on earmarking funds.

Masek plans to introduce a resolution to ask voters in the 2004 election to repeal the portion of the constitution barring dedicated funds on Friday, a spokesman said.

Under the amendment offered by Masek, if voters reject the constitutional amendment then the motor fuel tax increase would not take effect.

Murkowski had counted on the 150 percent increase in the state's gasoline tax to raise up to $41 million annually. But if the amended version survives the Legislature, it could endanger revenues needed to balance the state budget, Manly said.

Not only does it put it off for another year at least, it puts it off perhaps forever,'' Manly said.

House Transportation Committee members gave it a mixed endorsement with Masek casting the lone do pass'' recommendation.

Reps. Hugh Bud'' Fate, R-Fairbanks; Vic Kohring, R-Wasilla; and Mary Kapsner, D-Bethel, recommended the measure not pass. Reps. Dan Ogg, R-Kodiak, and Jim Holm, R-Fairbanks, gave no recommendation.

Holm, who also serves as committee co-chair, proposed the amendment to House Bill 173, which would have imposed a $10 studded tire fee. He said the $2 fee on new tires would raise about $2.5 million.

Murkowski had intended the studded tire fee to raise about $2 million to offset the cost of repairing roads which state transportation officials contend were damaged by such tires.

During earlier hearings, tire dealers had testified against the measure and some had maintained state officials overstate the damage done by studded tires.

Holm and Ogg recommended the measure pass, with Fate and Masek giving it no recommendation. Kapsner and Kohring recommended the measure not pass.

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