Governor, House and Senate Majorities and Minorities Agree
Public Advisory Vote Scheduled for September 14
Juneau -- The Alaska Legislature adjourned its Special Session Tuesday after both the House and the Senate approved a resolution calling for a public advisory vote on a proposed long-range fiscal plan for the state. The Senate vote on House Bill 1001 was 12-7, the House vote to concur with Senate changes was 31-5. Both bodies also approved a bill proposing ballot language for that election. The Senate vote on Senate Concurrent Resolution 102 was 12-7, the House vote was 31-5.
The bipartisan vote in both chambers indicates that, if voters support the proposal to use a portion of the earnings of the Permanent Fund for essential state services while guaranteeing a dividend to eligible Alaskans, legislation will be introduced to put the long-range fiscal plan into effect.
"The bipartisan support for this plan that balances the budget and protects the dividend program is a positive step for Alaska and puts us on the way toward a sound financial future," said Gov. Tony Knowles. "It took a lot of hard work to reach this agreement and I appreciate the efforts made by supporters in both houses of the Legislature. Continuing this level of bipartisan cooperation will be important as we seek the support of the Alaska people in approving this responsible plan for Alaska's future."
"We are at a significant juncture in our state's history," said Senate President Drue Pearce. "Together, the Senate, House and administration have developed a realistic, workable, long-range plan that can be used to close the state's ongoing $1 billion fiscal gap. The Senate Finance Committee had 36 meetings at which our fiscal gap was discussed. We worked with financial experts and with our constituents. We think the long-range plan we are asking Alaskans to judge offers the best solution for Alaska's economic security. On September 14, each and every Alaskan can have their say in shaping our state's economic future."
"We are taking this step because doing nothing is not a responsible option; Alaska faces serious fiscal problems that will get worse if we do not act," said Speaker of the House Brian Porter. "This plan will secure our dividends and the dividends of generations to come. It will not become law without a public vote and it requires no personal income tax. I'm confident that as the voting public comes to understand it, they will realize it is, in fact the proper responsible course for Alaska."
The proposed plan would consolidate the State's Constitutional Budget Reserve (CBR) and Earnings Reserve Account into a new account, called the Alaska Income Account. 5.88% of the Permanent Fund's annual earnings would be placed into this account annually, with 50% of those deposits, averaged over five years, going toward dividends.
In 1999 and 2000, the dividend will be guaranteed at a minimum of $1700. The following year, it is anticipated that the dividend will be approximately $1340 and will continue to grow with the value of the Permanent Fund itself. In addition, when the balance of the Alaska Income Account exceeds 40% of the combined total of the Permanent Fund principle and the Alaska Income Account, the excess will be deposited into the principal of the Permanent Fund.
No income tax is required for this plan. The balanced budget plan will be enacted by the Legislature only after - and only if - voters approve it in the September 14 advisory vote.
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