Legislature careens toward end-game; fiscal structure key issue

The Legislature is careening toward an end- game of sorts, and it could happen fast. The state House got the operating budget to the Senate last week after delays – but now oil taxes have emerged as a factor. The House Finance Committee dusted off a part of last year’s oil tax package and is reintroducing it as a bill, and possibly a condition in accepting the Senate’s fiscal reform package. What’s basically at issue is a structured use of Permanent Fund earnings and some provision for the dividend paid to citizens. The House says new revenues is needed to make this work, hence the oil tax proposal.

The budget passed to the Senate includes a 5.25 per-cent-of-market value, or POMV, draw on Fund earnings and a $1,600 dividend, which is higher than the Senate would have. The Senate agreed last year to a POMV in a bill sent to the House. There is no disagreement on a POMV structure to draw on Fund earnings for a long- term scale plan. The uncertainty is what else is involved in the negotiations, the dividend and now oil taxes. This was essentially the same ght that strung out the Legislative session last year. The budget passed by the House is up 5 percent up, about $100 million, from last year. The increase is mainly driven by higher health care costs, mainly state-funded Medicaid.