Over the last several months I have been involved in crafting a long-term budget plan called the All-Alaskan Plan. This plan has raised some concerns among a number of Kodiak residents about the Permanent Fund Dividend Program (PFD). This plan is one of many concepts that have been laid on the table over the last couple of years. Again, this is only a concept that will be considered as the Legislature ponders what to do about long-term budget planning for this state.

Over the next two weeks the finance committees of both the House and the Senate will be looking at all of the plans, including the All-Alaskan Plan, and coming up with a compromise of all the plans and placing a plan before both bodies for consideration.

For the last seven years the Legislature has been balancing the budget by taking a draw on the Constitutional Budget Reserve, one of our savings accounts. This year the draw will be the biggest ever at $1.2 billion. If we take out the same amount next year or more, then that savings account will virtually be gone. The debate over a long-term plan will cover all aspects of revenues and what the size of expenditures should be. Almost every legislator I talk to has come to the realization that we need to get out off the roller coaster ride of budgeting based upon the price of oil.

Should we have an income tax or a statewide sales tax? Do we need to cap the PFD? If so, should we cap it at $1,200 or $1,000? This is only one of the areas that needs to be decided. A lot of people say, do not touch my PFD! Institute an income tax instead! I wish it were that easy. The Governor's plan calls for an income tax based upon 31% of the federal tax. When the Alaska income tax was abolished it was at 16% of the federal tax. The Governor's plan doubles what our income tax used to be and it would raise about $350 million. The financial deficit for the state's FY2000 budget is $1.2 billion and it is projected that this deficit will be $1.3 billion in FY2001. $350 million in income tax falls far short of where we need to be. It's going to take a number of different things to balance the budget.

When I was elected to this job back in November of 1994 I campaigned on the fact that I thought we should have never gotten rid of the income tax to start with. When the citizens pay for government out of their back pocket they will pay attention to how large that government is growing.

A recent report showed that from 1978 to 1998 the population of Alaska grew 47% while the size of government, taking inflation into consideration, grew 290%. This Legislature is doing all it can to reduce and keep the cost of government down. Over the last 4 years we cut $190 million out of the budget.

In short, we as legislators, realize that some hard choices have to be made. As of now, no decision has been made on the PFD, taxes or final budget cuts. We will be making these decisions in the next two weeks. Your input is very important to me. Please call, write or email me with your concerns.

Consolidation

SB 146

All commercial fishermen of Alaska should watch this bill as it starts to move through the Senate. This bill will double the cost of annual commercial fishing license fee for Alaskans from $30 to $60 and non-resident fees will go from $90 to $125. This bill would also change the percentage of crew license fees that go into the Fisherman's Fund. Check with Lorna at the LIO for information concerning when this bill is due up next in committee.

Seiners - Length

Representative Bill Williams of Saxman has introduced House Bill 160, an act dealing with the maximum length of salmon seine vessels. I am opposed to this piece of legislation. One of the reasons for lifting the size limits is so a harvester could get a large enough boat to be a catcher and also have processing capabilities on the same vessel. This would weaken the shore-based plants. Registration areas as they now stand could also be in jeopardy as harvesters would want to have the flexibility to go from one opening to the next to justify their investment. This bill was heard and held over in the fish committee because of the same concerns brought forward in testimony.

Visitor's

Marty Shuravloff and Linda Freed were in my office to confer recently on a myriad of issues.