Candidates forum takes up issue of permanent fund

Posted: Wednesday, May 17, 2000

Candidates for all three Kenai Peninsula state House seats were grilled by the Save Your Dividend committee Monday night over issues near and dear to the group.

Those, or rather, that, issue is protecting the Alaska Permanent Fund Dividend. Some questions were tossed in about how candidates would balance the budget if they made it to Juneau.

Nestled in the back room of the Kings Inn, a panel of seven SYD members asked the seven candidates who showed up what the "No" vote in the Sept. 14 special election about using earnings from the permanent fund to help pay for government meant to them.

"I understood it to have several meanings," said District 9 Rep. Hal Smalley, D-Kenai. "Some people just didn't like it, some didn't like the idea there was no cap on spending, some wanted some added revenue streams, and some didn't want to touch the permanent fund dividend or the principal."

"'No' was clear to me," said Dale Wunderlich, a Republican from Homer running for the House District 7 seat being vacated by Gail Phillips, R-Homer. "There should be no use of the dividend to fund government without a vote of the people. What I got out of 'no' was we need to reduce government."

Reducing government was the other hot-button issue of the night. Grace Merkes of Sterling, running for the District 8 seat being vacated by Gary Davis, R-Soldotna, said eliminating the state's Power Cost Equalization program for rural communities is a way to save money, as is forcing local communities to support their own museums and libraries.

"I love the arts, too, but can we afford it?" asked Merkes, now a Republican after a lifetime of being a Democrat. "We need to spend money on roads, schools and public safety and not spend so much money on social services."

The state Division of Family and Youth Services specifically was targeted by Merkes.

"If DFYS thinks there's abuse happening, they must investigate it," she said. "If ... they only investigate if there is proof that abuse or neglect happens, if there is physical evidence, then there will be less reports."

Other candidates suggested other ways to make cuts in the state budget. Carolyn Reynolds, a Republican from Soldotna also running from House District 8, said reducing supervisors in state departments could save a lot of money.

"Right now there is one supervisor for every five employees," she said. "If we cut that to one supervisor for every 75 employees, we will save billions."

There was a specific question regarding two bills -- House Joint Resolution 49 and Senate Joint Resolution 35 -- that didn't get very far in Juneau this session. Both would protect the dividend by making the annual check a constitutionally protected mandate.

Soldotna Mayor Ken Lancaster, another Republican contender for the District 8 seat, said he would support the resolutions.

Smalley said he could not support them in their current form, because there is the possibility that the IRS would take $9 billion off the top if the resolutions are passed.

"That's when (the resolutions) became stalled," he said. "They will be reintroduced next year, and there will be a lot of research over the summer."

Ed Martin Sr., who helped spearhead the Vote No campaign, was not satisfied with Smalley's answer, and despite his colleagues telling him Smalley was trying to answer the question, Martin badgered the representative into giving him a yes or no answer.

"Would you support them?" Martin asked.

"As they are written, no," Smalley responded.

Before he could get out another word, Martin cut Smalley off again, and moved to another candidate.

Pete Sprague of Soldotna, the only other Democratic candidate, said the resolutions have problems as they are now.

"Locking up the dividend is not a viable alternative," he said.

Linda Reynolds, sister of Carolyn and a K-Beach resident who is running for the District 9 seat held by Smalley, said she would absolutely support the resolutions.

"They should lock it up. We were threatened," she said about the plan last year to use excess permanent fund earnings to fund state government.

Missing from the forum were three candidates. District 9 contender Mike Chenault of Nikiski, a Kenai Peninsula Borough School Board member, was at the school board meeting. Homer's Drew Scalzi and Cooper Landing's Larry Smith also were missing. They are vying for the District 7 and 8 seats, respectively.

Forum organizer Bill Parrish said the Save Your Dividend committee will not make endorsements until after the June 1 filing deadline, probably at their June 5 meeting.

"If there's anybody we haven't talked to, we want to give them an opportunity to give us their views on things," Parrish said.

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