"I am today calling a
special session of the Legislature to meet in Juneau on June
22, 2004.
"I am calling it here
in Fairbanks at Signers' Hall to remind Alaskans of the tremendous
contribution made by the 55 men and women of the Conference of
Alaskans to bring our attention to the need to address the state's
fiscal stability.
"The purpose of the special
session is to fix the state's long-term fiscal problem while
oil prices are high and we have the luxury of not being in an
economic crisis.
"A solution will assure
the state's ability to maintain essential public services like
education, health care, roads and public safety.
"I want to emphasize the
fiscal fix is designed not only to protect essential public services,
but also to protect your dividend. My first principle for a plan
is that it must protect both the Permanent Fund and the dividend.
"As many of you may know,
the Legislature already has the authority to spend every nickel
of the $4 billion dollars currently in the Permanent Fund's earnings
reserve account.
"The endowment concept
for management of the Permanent Fund, which the House has already
passed, would constitutionally limit the amount the Legislature
could spend to no more the 5% of the value of the Fund.
"This limitation would
stabilize the Fund and make the annual dividend more predictable
going forward.
"There are other ways
to protect the dividend that I am prepared to support so long
as a reasonable portion of the Fund's earnings are available
to maintain essential public services like education.
"Let me explain why I
believe education funding is so important. I have heard from
many educators and parents who believe their schools do not have
the financial resources to adequately meet the demands of educating
their children. That's why I supported the $82 million increase
in the foundation formula for the next school year. The only
way to continue this level of education funding in the future
is to identify new revenues to pay for it, such as some of the
Permanent Fund's earnings. What better way is there to invest
in our future?
"Another principle for
a plan that I will support is funding for safe and strong communities.
The House-passed package included a 5% community dividend, which
would allow communities to pay for needed services or roll back
local taxes.
"We have reduced spending
by more than $245 million over the last two sessions of the Legislature.
I have directed my fiscal team to continue these efforts to ensure
that we have an effective, efficient state government that delivers
results for Alaskans.
"The third principle on
which a fiscal package must be based is a real spending limit
that will force government to prioritize and be more efficient.
I will not let public funds be wasted by building a bloated bureaucracy.
"The last but most important
principle is a responsibility that I have placed at the forefront
of my administration-to grow the economy by developing Alaska's
natural resource wealth-just as Congress intended when Alaska
was granted Statehood.
"Through revenue earned
from natural resource development we can grow the Permanent Fund
and to provide jobs for our kids. This is our highest responsibility.
For example, just today we were present for the opening of the
Pogo mine, which will provide over 300 jobs when operating. We
signed legislation to extend the Alaska Railroad. This is the
first extension since 1923.
"The proclamation, which
I am issuing today, will include a spending limit, an endowment
concept for the Permanent Fund's management, and legislation
to split the endowment payout among the dividend, funding for
communities and education.
"While the proclamation
will also allow bond packages for needed transportation infrastructure,
like a fix for the Anchorage traffic congestion problem and meet
University needs, I will only approve these packages if they
are part of the fiscal fix. We cannot afford to jeopardize the
state's credit rating by approving a bond package if we do not
have a fiscal solution.
"The call will also include
a tobacco tax, which is essential to help reduce teen smoking,
and the overwhelming costs of tobacco related illness. This is
unfinished business. As you recall, time ran out before the Legislature
could pass it.
"Finally, the proclamation
will include a workers' compensation bill. This is important
to small businesses in Alaska, which are relying on us to find
ways to reduce the escalating insurance costs.
"I would like to conclude
by pointing out how high the expectations of Alaskans are that
the Legislature will enact a solution to the state's long-term
fiscal problem and do it now."
