March 29: Anchorage Daily News on legislators and fiscal plan:

Posted: Monday, April 02, 2001

Let's call them the ''Heads-Up Caucus.'' With any luck they could lead the way to fiscal responsibility in Juneau.

A dozen Republican legislators joined with Democrats this week in calling for a long-term state fiscal plan. They've noted what's become painfully obvious: Not much has happened on the issue this year. And with state elections coming up next year, broaching difficult subjects like taxes and revenues will get harder, not easier.

''We're frustrated at the lack of movement and any type of discussion regarding a fiscal plan,'' said Rep. Andrew Halcro, R-Anchorage, who has emerged as a leader in the Legislature on the subject.

Estimates remain at about $500 million for the amount we'll draw from the Constitutional Budget Reserve to balance next year's budget. The same estimates show we'll likely deplete the reserve and face a billion-dollar gap in September 2005. At that point, both tax hikes and service cuts will hammer us, big time, if we haven't had the foresight to fix the problem already.

All this comes at the end of five years of determined budget-cutting in the Legislature, as well as growing public dissatisfaction with both service levels and the general fiscal predicament. It wouldn't be smart to cut more, and it wouldn't be prudent to continue on the same course.

What we need is a long-term plan that balances some combination of the following: broad-based taxes, so that everybody pays something for what we get; some use of the Alaska Permanent Fund earnings reserve (earnings left over AFTER inflation-proofing and dividends); a cap on growth of the Permanent Fund dividend; a restructuring of oil and gas taxes to tap the most profitable state-owned resources and encourage further production, and a triggering mechanism that would make sure a rational fiscal plan kicked in when the CBR was drawn down too far. The principle is simple: Everybody gives up a little bit now to provide for a better future. All of it is manageable and relatively painless if we do it soon.

Business and civic leaders increasingly identify the state's structural fiscal imbalance as a drag on growth and opportunity -- because budget pressure becomes an excuse for not doing things that need doing, and because new businesses or families thinking of investing in Alaska are deterred by the uncertainty of the future.

Virtually everyone in Juneau knows the facts on the ground. High-level expert panels have been advocating the same basic elements to a solution for the past decade. The sensible legislative debate now would be about how much of which elements to employ.

The difficulty in getting there is that leaders aren't leading and the public isn't following.

What's needed is a lot of serious public dialogue that changes the sense of responsibility on all sides. Alaskans are not shirkers. They will fix this problem when they truly feel a part of it.

That's why the ''Heads-Up Caucus'' of Rep. Halcro and others -- notably Rep. Carl Moses, D-Unalaska, Rep. Bill Hudson, R-Juneau, and, for his part, Gov. Tony Knowles -- have pressed the issue again this year. That's also why they are so frustrated that three-quarters of the legislative session has passed without hearings or serious debate.

But that's the job. That's the meaning of leadership in Alaska. Fixing the fiscal problem -- so that it's no longer the excuse for what we do or don't do as a statewide community -- is job one in the Alaska Legislature. Fixing it sooner, while we have time and resources, will be easier than fixing it later when we've run out of both.



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