Sen. Tom Wagoner, R-Kenai, told the Kenai Chamber of Commerce Wednesday that the state needs to continue searching for new sources of revenue while it works to downsize state spending.
Wagoner gave the chamber an overview of the recent legislative session. He said he was most pleased with three bills he helped steer through the Senate, particularly one which will allow Agrium's Kenai nitrogen products facility to know ahead of time what it will pay for natural gas.
"(Senate Bill 50) allows the commissioner of natural resources to negotiate the contracts with Agrium as to the price of this gas," he said.
Wagoner said he wants to clear up any "misinformation" about the bill. The bill isn't a corporate handout, he said, but simply a way that Agrium can better do business.
"They just wanted to know a fixed price for their gas," Wagoner said. "... There is no giveaway to Agrium."
Wagoner said the Legislature's challenge for next year will be to work at increasing its level of support for natural resource development.
"We can't allow the (trans-Alaska oil) pipeline to diminish to the point where we have to tax ourselves to death," he said.
He noted that he still does not support either a sales tax or income tax plan anyone has put forward.
"Right now I do not support a sales tax bill and I do not support an income tax bill," Wagoner said.
He said he won't support any sales tax plan that is not acceptable to local governments. Unless Soldotna Mayor Dave Carey, Kenai Mayor John Williams and Kenai Peninsula Borough Mayor Dale Bagley tell him they're behind any plan, he won't vote for it.
"When they come to me and say the bill is acceptable to us, then it is acceptable to me," he said.
As for the controversial cut of the longevity bonus program, Wagoner said he supported a plan which would have phased the program out after five years. However, such a plan died in the House of Representatives, and Wagoner said there is not enough support in the Legislature to make calling a special session on the matter worthwhile.
"The votes are not there to override the governor's veto," he said.
As for next year, Wagoner said the government likely will see more of the same situation it faced this year, and that cutting spending will be the key factor during the legislative session. However, he did note that Gov. Frank Murkow-ski will have a chance to submit a budget before the session gets under way, meaning any of the governor's planned cuts will be known ahead of time.
"He will be doing his cutting prior to the Legislature starting," Wagoner said.
What that will mean for Alaska residents is unknown. However, Wagoner said the Legislature likely will be forced to again examine taxes and a state lottery as possible sources of revenue.
"I think (the Legislature) will be forced to," he said.
The key to the budget solution, Wagoner concluded, will be to hold off spending down the state's draw on the constitutional budget reserve until new oil exploration and production can come on line, which likely won't be immediately.
"We are not going to see more revenues created by oil next year," he said.
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