Legislators hit the road to discuss fiscal future

Posted: Tuesday, June 24, 2003

ANCHORAGE (AP) A pair of legislative committees will travel across the state to talk to Alaskans about how to pay for state government and other fiscal matters.

Members of the House Special Committee on Ways and Means, which authored the state sales tax plan that died in the House last session, plan to visit about 20 Alaska communities.

''The issue deserves to be presented in the communities to give as many people as possible the ability to provide direction and personal input to us,'' said committee Co-chairman Mike Hawker, R-Anchorage.

Hearings likely will run from late July to October.

The Senate Judiciary Committee is starting hearings on a proposal to convert the Alaska Permanent Fund into an endowment model that would annually make available a percentage of its value for dividends and services. The first hearing is Thursday in Fairbanks.

Using a slice of the fund payout for state services is a linchpin of the plan drawn up by leaders of the Special Committee on Ways and Means. Other parts of the plan include a constitutional amendment to put a limit on state spending and a broad-based state tax, likely a sales tax.

Hawker, the committee co-chair, said the idea is to make the tax part of the plan small. This summer he is working to fine-tune the 3 percent sales tax plan that died last session but is expected to be back next year.

He said the alternative of an income tax will be brought up at hearings. But in the Legislature, an income tax is ''dead on arrival,'' he said.

The urgency to find a solution to the state's huge and recurring budget shortfall is driven by the forecast that the state budget reserve will be drained in just three years or so. Lawmakers such as Hawker want to keep some of the reserve alive as a cushion against swings in oil prices.

Hawker said that he is open to people who want no taxes or use of the permanent fund to help with the state's budget shortfall.

But that means cutting a third of state spending, he said, and in some cases giving up matching federal dollars.

''We would really be looking at taking a couple billion dollars out of the state's economy,'' Hawker said.

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