Governor's either/or budget solution will require an 'and'

Frontiersman editorial board

While Gov. Frank Murkowski visited with Frontiersman reporters on Wednesday, he received the news that HB 298 had made it through the House -- by the skin of its teeth -- and was on the way to the Senate, where the Governor said he expects an even cooler reception.

The bill is essentially the governor's request to place an item on the November ballot that would allow Alaskan voters to decide whether to switch permanent fund management to the governor's percent-of-market-value model, and to change the way the fund is dispersed -- including a spending cap and inflation proofing.

In a hand-out prepared by the administration, two options to solve the state's fiscal crisis are listed. One is the governor's plan mentioned above, and the other is "Taxes." The hand-out then says, "Let Alaskans decide which of the two options they want …"

There are two problems with the administration's argument. The first is that the governor seems to simplify the argument to an either/or scenario, asking voters to accept that the state's budget woes can be solved either by changing the way the state manages and uses the permanent fund, or by raising taxes. In fact, one of the reasons HB 298 is receiving a cool reception (from people on both sides of the aisle) is that many Alaskans believe the POMV formula should only be a part of the solution, and that increased revenues -- perhaps in the form of taxes -- also have to be applied. The governor's argument does not allow for such a solution, and it will likely garner little support from Democrats as a result.

The second problem is that the governor says he wants Alaskans to decide between the two options, but the bill only allows voters to give a thumbs-up or thumbs-down to the POMV solution. The message being, "If you don't support POMV as the solution, then you must support taxes as the solution." It places voters in a tough spot, because it allows them no real options. It's like a doctor telling his patient, "You can respond to your headache by taking aspirin, or by taking a nap, but you can't do both, and you certainly can't try anything else."

The governor has one more surprise, though. He said that even if his plan is approved, the state's coffers still would fall about $120 million short of a balanced budget. He assures us, however, he can address and overcome that shortfall with a cigarette tax and a tax on tourists. So much for either/or. The question, it seems, is not whether you want taxes, it's which taxes do you prefer?