Murkowski's staff makes plea for sales tax

Posted: Sunday, May 18, 2003

JUNEAU (AP) With legislative support for a statewide sales tax flagging and time growing short late Saturday night, the Murkowski administration appealed to lawmakers to spare millions in state projects from his veto pen.

The administration staring at a gaping hole in its budget and an even more bleak budget future assembled lawmakers in a large conference room and laid out what would happen if the tax measure dies. And it was a bombshell.

Gov. Frank Murkowski will cut $47 million in construction projects and eliminate millions from education, senior services, tourism, fishing and parks.

In all, the governor plans to use his veto powers to cut $188 million from a $2.2 billion budget as part of what his top advisers called ''Plan B.''

The appeal from Murkowski chief of staff Jim Clark went unheeded as lawmakers adjourned early Sunday without voting on the sales tax measure. Afterward, House Speaker Pete Kott, R-Eagle River, declared the measure dead.

''I think we've pretty much made a statement that we support him in Plan B, if you will,'' Kott said. ''You can tell when he's bluffing and I don't believe it is a bluff.''

Kott said the cuts will reinforce to the Alaska public which hasn't paid a statewide tax in three decades that the state is in difficult fiscal straits.

The governor himself was not there. Murkowski is in Seattle preparing for medical treatment for a blocked artery. In his absence, chief of staff Clark held an unprecedented ''open caucus'' in a state capital committee room.

House and Senate Republicans, who control the Legislature, squeezed into the room with minority Democrats and numerous aides, lobbyists, political watchers and journalists.

Clark told lawmakers that the sales tax proposal, which up to this point lacks support in both chambers, is a critical part of Murkowski's budget balancing act.

With oil revenues lagging and future prices looking dim, the governor has called on lawmakers to spend less and take no more than $400 million from the state's budget reserve.

Neither the House nor the Senate could meet the goal that the Republican governor laid out and lawmakers must consider ways to trim millions from an already Spartan spending plan.

Republicans in the Legislature many of whom won election this year on the coattails of a ''no tax'' GOP theme also failed to approve many of Murkowski's tax increases.

Now with less than five days remaining this session and support for the sales tax proposal flagging, Clark reiterated how much the state needs the $300 million in revenues it would create.

In the first year, the sales tax would bring in about $163 million and breathe another seven years of life into the state's $1.9 billion Constitutional Budget Reserve, which would have been drawn to zero in three years without the governor's tax proposals.

Cheryl Frasca, director of the Office of Management and Budget and Murkowski's chief budget architect, used an overhead projector to show what the administration called Plan B.

It means deep cuts in this year's budget that will spare few politically sacred areas and yawing shortfalls in future years that will eventually leave the state $1 billion in the hole with no reserves to draw upon.

Murkowski officials made it clear that if the Legislature does not deliver on the sales tax proposal, he will impose the deep cuts after they go home next Wednesday.

Lawmakers listened in awed silence as the governor's chief adviser laid out the consequences in a straight-forward, calm fashion. Afterward, he asked for questions. Republicans, who hold the fate of the tax measure in their hands, were silent.

Legislative leaders have been unable to muster the needed votes to approve the sales tax proposal as it faced a deadline Saturday. Without approve in the House, the measure looked unlikely to make it to the governor's desk before the May 21 adjournment.

Senate Majority Leader Ben Stevens, R-Anchorage, said the lines appeared to have been drawn among GOP lawmakers there and few were undecided.

''We don't have the votes in the caucus,'' Stevens said.

House leaders also lacked the lawmakers willing to cast a ''yes'' vote Sunday.

''I don't know what we're going to do. We're down to the basics right now,'' said Rep. Bill Williams, R-Saxman, who has been around for past budget crisis. ''We're going to hurt everybody.''



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