Most Alaskans recognize we have a "fiscal gap" problem - where our expenditures exceed our revenues. In business, we call it a "cash flow" problem. Governor Murkowski has proposed increasing our resource development as one of several ways to bridge this gap. I support his philosophy, but I'm concerned about the time it will take to accomplish.

I also don't like TAXES - taxes hurt the economy and pick the pocket of the average citizen. Taxes should be a last resort.

There has been a lot of publicity surrounding my House Bill 11 - Deposits to the Permanent Fund. This bill, which I have introduced before, passed the House in 1999 and 2001. This is not some devious plot to steal money from the Permanent Fund.

The Constitutional Amendment establishing the Permanent Fund states:

At least twenty-five percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue sharing payments and bonuses received by the state shall be placed in a permanent fund. (emphasis added)

In 1980, when the State's general fund was $4.1 billion (versus today's $2.5 billion) the Legislature, wisely, increased the percent of deposits to the Permanent Fund to fifty percent for all new leases, etc., after February 1980. This means that Prudhoe Bay and Kuparuk are contributing at 25% and declining in production. All new fields, such as North Star, Alpine, Meltwater, Liberty, Tarn, etc., as well as ANWR and NPRA, will contribute at 50% without a bill like HB 11. In other words, we are replacing 25% deposits with 50% deposits to the Permanent Fund corpus when new production starts. With production from the old fields declining at about a 10% rate, we are behind the financial curve because of this current law even if we were replacing old oil, barrel for barrel, with new oil (we are getting close: remember "no decline after '99"). As we produce an equal amount of oil, we have less money going to the general fund -- we go backwards.

Without HB 11, and when the Governor is successful with new development, we still will be cash flow short. For example, ANWR revenues could go 50% to the feds, 25% to the Permanent Fund, and 25% to the general fund without this legislation. Remember, the issue is what do we do when our Constitutional Budget Reserve is zero? We either have to use Permanent Fund earnings or tax Alaskans. HB 11 is like discovering a new oil field the size of North Star and is a small step in a plan to AVOID taxes.

House Bill 11 remains a good idea. It has minimal impact on the Permanent Fund Dividend, none, zero, zip until 2010 when the dividend could go down by $10 more or less. On the other hand, if we do nothing to close the fiscal gap, taxes are a great reality. I do not support taxes and want to do anything I can to avoid putting in place an income tax, sales tax, or any other tax.

Let me know your ideas: by mail: Representative Norman Rokeberg, State Capitol, Juneau, AK 99801-1182, telephone: 907-465-4968; fax: 907-465-2040; and e-mail:

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