'Stars aligned' for GOP session in Alaska

Posted: Sunday, May 25, 2003

JUNEAU (AP) Republican Gov. Frank Murkowski was sworn into office in December with a pro-business agenda and to the accolades of GOP lawmakers who said after nearly a decade ''the stars are aligned.''

As midnight faded on the 2003 session and legislators packed up and went home, observers say the Republicans were right.

''I doubt if they won any friends this time because they probably did make everyone mad,'' said Dave Dittman, a pollster and longtime political observer. ''But I think, by and large, they did what they said they were going to do.''

Lawmakers approved oil exploration incentives, rolled back provisions of the state's minimum wage, cut spending and raised the stakes for environmental groups that file lawsuits to block projects.

They also took on tort reform to lessen the threat of lawsuits on a number of businesses, doubled campaign contribution limits and changed the state's lobbying law.

The Legislature said 'no' to a proposed 3 percent statewide sales tax and dismissed prospects of an income tax out of hand but approved a number of smaller taxes and fee increases.

After battling with Democrat Gov. Tony Knowles for the past eight years, the climate change around the halls of the capitol was unmistakable for GOP lawmakers.

House Speaker Pete Kott, R-Eagle River, called it a ''breath of fresh air.'' Democrats call it an ill-wind that will hurt working Alaskans.

''We saw Murkowski taxes, deep cuts to education and in many cases a rubber stamp Republican Legislature for those very negative proposals,'' Senate Minority Leader Johnny Ellis, D-Anchorage, told reporters after the session.

But in any case, here's what was accomplished:

Education. Murkowski proposed cuts to education and no change in the state's foundation formula. Lawmakers met him halfway, slashing $21 million in state support for K-12 education but increasing the per-pupil spending by $159.

Social Services. Murkowski wanted major changes in that area to take advantage of more federal support. Legislators cut social services by $4.6 million and changed the eligibility for several programs.

Oil and Gas. Lawmakers quickly approved a bill to allow the governor to begin negotiations with major oil producers over a natural gas pipeline. They also approved a severance tax credit of up to 40 percent of the cost of oil exploration wells. State officials estimate it's a $50 million tax break.

Campaign finance. Lawmakers doubled campaign contribution limits to $1,000 per individual and restructured the state's lobbying law to exempt more people from restrictions on giving.

Tort reform. Lawmakers dramatically changed the state's public interest litigant rules to require losing parties to also pay attorney fees. They also exempted a host of businesses from some liability such as home inspectors, real estate agents and recreational tour operators.

Permanent Fund. Lawmakers for the first time rolled back the amount of oil money going into the principal of the fund to divert much-needed $45 million into state coffers. Republicans also broached the prospect of using some permanent fund earnings for state government, but did not act on it.

Business. A year after the Legislature increased the state's minimum wage to $7.15 an hour to prevent a citizens initiative from going on the ballot, lawmakers rolled back other provisions of the law. They repealed an automatic inflation increase to the wage, which was part of the ballot measure.

Taxes. Lawmakers rejected a number of taxes proposed by Murkowski and did not act on a 3 percent sales tax that he supported. They did, however, increase several fees and impose a tax on tires, studded tires and car rentals.

Republican lawmakers disagreed with Murkowski on the need for a statewide sales tax to help fund state government, but it wasn't unanimous. A number of GOP lawmakers had vowed to vote for it if it went to the floor.

Dittman said the disagreement is reflected in polling that he's conducted on the state's fiscal woes. Since the 1980s, Alaskans have agreed that spending cuts are the solution to the state's budget woes and not taxes. But in recent years the margin of support for cuts is narrowing, Dittman said.

Murkowski plans to sever about $130 million from state spending to reach his target of preserving the state's dwindling reserve account. And he promised more cuts are in the works next year.

A slew of bills introduced this session will resurface when the Legislature returns in January. Kott has already said lawmakers will likely revisit the sales tax issue then.

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