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Governor's plan will allow him to raises taxes, avoid fallout

Posted: Tuesday, May 11, 2004

I believe Gov. Frank Murkowski came to the personal realization a long time ago that Alaska has built up such a monstrous governmental bureaucracy that it would be much too politically painful to attempt to decrease it by reducing state spending. Too many friends and loyal political allies would be put out of work and that would take a heavy toll on both the governor and his political party.

I believe the option of dramatically reducing state spending was removed from the governor's table of solutions at the beginning of his fiscal problem solving. Once a dramatic state spending cut was removed, the next most logical fiscal solution was to increase the amount of taxes the state collected.

The governor understands that any representative, and his party, who "requests" to raise taxes will pay for it at the polls, therefore causing the same negative political fallout as reducing state spending.

The next most logical revenue source was the permanent fund dividend. The governor knew that if he attempted to take away even part of the dividend checks, there also would be a large political price to pay.

The governor needed a backdoor solution which would allow him to not really appear to select any of these negative fiscal solutions but still allow him to fund most of the existing governmental bureaucracy.

The governor's solution to allow a statewide vote to use part of the permanent fund dividend to pay for state overspending is such a backdoor solution. It appears that the governor knows that voters will refuse to give up their dividends. Once the public votes down the taking of their dividends, the governor then no doubt intends to inform the voters that he is therefore forced to attempt large scale state tax increases to pay for state essentials.

It appears that the governor has calculated that by getting the voters to eliminate the permanent fund issue for him, that vote will give him just enough detachment from the resulting tax increases, that he can still politically survive.

This appears to be a well constructed and elaborate plan by the governor's office as it would allow him to appear to wash his hands of the resulting tax increases. This plan appears to give the governor everything he needs -- an appropriate distance between himself and the resulting taxes while at the same time allowing him to retain most of his political support.

Don Johnson

Soldotna



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