Fiscal plan meetings resume on Saturday with no headway

Posted: Sunday, April 28, 2002

JUNEAU (AP) -- Several House lawmakers emerged from a meeting Saturday with Gov. Tony Knowles with no resolution on breaking the impasse over tax proposals aimed at the state's deficit.

Democrats don't have support to back a GOP sales tax plan and it's unclear how a compromise income tax would fare before Majority Republicans, lawmakers said.

But Knowles said the group of 12 House members will continue to work to find a solution to begin closing a deficit expected to reach $963 million next year.

''I think we're building the basis for bipartisan support of a plan that will significantly reduce the fiscal gap,'' Knowles said. ''But clearly there's got to be leadership on both sides that are supportive.''

House Speaker Brian Porter and Rep. Eldon Mulder, both Republicans from Anchorage, did not attend Saturday's hour-long meeting. An aide to Porter said he was ill.

Mulder, the influential co-chair of the House Finance Committee, could not be reached for comment Saturday.

Knowles began meeting with lawmakers last week after the two sides reached a dead end on competing tax plans.

House members have been at odds over several revenue-raising proposals aimed at closing a chronic budget shortfall and breaking the state's dependence on oil income for state government.

Earlier, the House rejected an income tax proposal supported by Democrats and some moderate Republicans. A GOP plan to impose a 3 percent statewide sales tax has been unable to win the necessary 15 Republicans to bring it to the floor.

A compromise income tax proposal offered by Rep. John Davies, D-Fairbanks, spurred negotiations.

The latest income tax proposal would raise at least $185 million and require anyone who files a federal income tax return to pay a state tax.

But it would take a lower percentage of income from wealthy Alaskans than from the low- and middle-class.

Many Republicans had argued that previous income tax proposals were unfair in that they penalized the rich and exempted many Alaskans from paying any taxes.

Rep. Jim Whitaker, R-Fairbanks, said the Davies plan has received favorable comments among other Republicans. But it's unclear how many lawmakers would back the plan.

''I know there is seemingly significant support for it, whether or not there is enough support to have it go to the floor and pass I don't know,'' said Whitaker, who attended Saturday's meeting.

Also at the meeting were Reps. Bill Hudson, R-Juneau; Ken Lancaster, R-Soldotna; Ethan Berkowitz, D-Anchorage; Eric Croft, D-Anchorage; Gretchen Guess, D-Anchorage; Beth Kerttula, D-Juneau; Mary Kapsner, D-Bethel; and Davies.

The state Department of Revenue estimates Alaska will have a $826.7 million budget shortfall in July that will grow to $963.4 million by fiscal 2003.

Past shortfalls have been filled with the state's $2.4 billion Constitutional Budget Reserve. But that fund is expected to be drained by 2004, the state Department of Revenue said.

Alaska counts on oil revenues for about 80 percent of state government's revenue stream. But oil production has been on the decline, falling to about half of its 2 million barrels per day peak in 1988.

Subscribe to Peninsula Clarion

Trending this week:


© 2018. All Rights Reserved. | Contact Us