Two candidates for Alaska’s governorship appeared at the Kenai Chamber of Commerce luncheon Wednesday and had state-provided services on their minds.
Democratic candidate and former Gov. Tony Knowles and Independent candidate and former legislator Andrew Halcro each outlined their goals by highlighting the importance of municipal revenue sharing and long-term state financial planning.
Both said municipal revenue sharing essentially pitching in state funds to help localities pay for services and infrastructure must be a part of the state’s budget picture.
One key element of providing stability in essential services is to properly manage the building of the proposed natural gas pipeline from the North Slope to the Lower 48, Knowles said.
“People have asked me, ‘What possessed you to come back?’” Knowles said in his opening remarks. “I know that the decisions that will be made over the next few years can have a positive effect on Alaskans for the next 50 years if they are made right.”
Knowles said the state deserves its fair share of oil and gas revenues and a stake in the proposed pipeline, but that the management of those revenues will define quality of life for Alaskans for years to come.
“If we can use fiscal discipline, we can use those surpluses for the most important part of our future, and that is education,” he said.
Halcro said Alaska needs strong leadership in regards to fiscal discipline, and that it will take more than oil and gas to structure a sound fiscal policy.
“There is no commodity in the state that will take the place of oil and gas in the short term,” he said.
Halcro proposes using the interest earnings from the permanent fund which accrue separately from the permanent fund dividend to ease the burden of price swings in oil and gas and continue to fund revenue sharing.
“What we do has to be sustainable,” he said.
Both candidates said the shutdown of BP’s Prudhoe Bay operations, while it will have an impact on state coffers, should not force the implementation of a state income tax to cover those services.
“I agree that today is not the time for a broad-based tax, but now is the time for long-range fiscal planning,” Halcro said.
Knowles also said a state income tax is not likely to be implemented by his administration.
“We have enough revenues from our natural resources that we don’t need to look for more revenues and throw services off,” Knowles said, noting that long-term planning and belt-tightening can help accomplish that goal.
Knowles, however, does not support Ballot Measure 2, which would impose a $50 per person, per trip tax on cruise ship passengers visiting Alaska.
While in office, Knowles proposed a head tax on cruise ship passengers, but said the measure, which will appear on the Aug. 22 primary ballot, is too poorly written to stand up in court. In addition to the head tax, Ballot Measure 2 would put environmental officers aboard cruise ships and require they disclose business dealings with vendors on shore.
“Initiatives can get complicated, and this one is an incubator for lawsuits,” Knowles said.
Halcro, who operates a rental car business that caters to tourists, does support the proposition, saying, “This is an industry that has grown four times over the past five years that contributes nothing to the cost of state government.”
He said his customers pay a premium to contribute to Alaska’s economy.
“My customers pay 10 percent. I don’t think the proposition is complex at all.”
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