House takes step toward POMV

Posted: Tuesday, April 27, 2004

JUNEAU House lawmakers on Monday took the first step toward tapping a portion of the $27.9 billion Alaska Permanent Fund to close the state's chronic budget shortfalls.

The vote came hours after Gov. Frank Murkowski delivered a rare speech from the House floor, where support for the plan was wavering, asking lawmakers to end gridlock and put the measure before voters in November.

The GOP-controlled House delivered just enough votes, 27-13, to send the measure over to the state Senate, where it faces an uncertain future.

"They have to go through the same things we did," said House Speaker Pete Kott, R-Eagle River, after four hours of debate.

Murkowski has been trying to win legislative approval of a spending cap and a ballot measure asking voters for permission to use a portion of the permanent fund.

In a speech to the House, the Republican governor recounted the state's money woes and told lawmakers: "I need your help."

Dwindling oil revenue has forced the state to dip into its $2 billion Constitutional Budget Reserve in 11 of the last 13 years despite spending cuts.

The constitutional amendment would limit the amount that can be taken from the permanent fund, Alaska's oil wealth savings account, to 5 percent of its five-year average.

But a bill accompanying the amendment calls for the $1.3 billion available under the new formula to be split evenly between education and the annual dividends that go to Alaska residents.

Alaska could have a balanced budget in two years if voters approve the spending cap and so-called "percent of market value" amendment, Murkowski said.

House lawmakers adjourned before taking action on the bill, but not before clearing the tougher political hurdle of mustering the two-thirds vote for the amendment.

Among the Democrats supporting the amendment were four from Bush Alaska districts where the permanent fund dividend can be a large portion of residents' annual income.

Reps. Reggie Joule, D-Kotzebue; Mary Kapsner, D-Bethel; Albert Kookesh, D-Angoon; and Carl Moses, D-Unalaska, voted yes.

Joule said he supported the measure to stave off deeper budget cuts that could result if lawmakers take no action this year.

"I've seen what some of the cuts we've made can do to rural Alaska," Joule said.

For much of the session, many Democrats have been deeply entrenched in their opposition to Murkowski's proposal to use a portion of the permanent fund to close the state's budget shortfall.

"What we are doing is putting the greatest burden on those least able to pay, and asking those most able to pay to take a vacation from really helping very much," said Rep. Les Gara, D-Anchorage, who voted against the measure.

Also voting against the measure were House Minority Leader Ethan Berkowitz, D-Anchorage, and Reps. Harry Crawford, D-Anchorage; Eric Croft, D-Anchorage; Max Gruenberg, D-Anchorage; and Beth Kerttula, D-Juneau.

They joined with a number of hardline Republicans including Reps. Mike Chenault, R-Nikiski; Nancy Dahlstrom, R-Eagle River; Beverly Masek, R-Willow; Kevin Meyer, R-Anchorage; Bill Stoltze, R-Chugiak; and Kelly Wolf, R-Kenai.

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