A: At this point I can say that the priorities of the caucus are going to be around education. We're going to do as much as we can for K-12 education and the university. I think the issue that's out there for it that's important is developing our resources, which has always been something that's been talked about, but I think we're serious about it this time as we proceed ahead with the potential opportunity to develop that gas pipeline. From our standpoint this is the year. If it doesn't happen we've missed the golden goose. ... We're talking about people resources. We believe we have a good Alaska citizenry that we have to make sure is well-trained for whatever is coming our way in the near future, whether it's a gas pipeline, whether it's fiber optics or anything else of that nature. That's again getting back to working with the university to make sure we have that well-trained workforce.

Q: Do you believe there is support in your caucus for adopting the Percent of Market Value endowment plan for the Alaska Permanent Fund and using some of the earnings, which are used to pay dividends, for state government?

Head of the House: Rep. Pete Kott speaks to the media in January 2003 at the Capitol during a press conference held by the Legislature's Republican majority. Kott, from Eagle River, is speaker of the House. MICHAEL PENN/THE JUNEAU EMPIRE

A: I certainly believe that the permanent fund dividend program should be part of the solution to the fiscal gap. We've had Rep. (Mike) Hawker with Ways and Means take his dog and pony show on the road to support the Percent of Market Value, which I think is the way to go. Without that we're going to have to do something real drastic and, hopefully, at the end of this session we can have something on the table or at least if not for our consideration, then for voters' consideration.

... I think a fifty-fifty split (between dividends and government) is the way to go. ... The state's revenue from all the variety of revenue sources amounts to about $1.78 billion, and if we were to have the POMV in place this year, we'd have about $600 million. Between the two of them we've got $2.3 billion, just about what the budget was last year. ... If, in fact, you have POMV in place and you say OK, this year's spending is going to be based on what we received last year from all other revenue sources, plus whatever it was we got from our 50 percent of the POMV. Next year that's your budget. You can't exceed it.

Q: Republicans last year moved money out of the earnings reserve of the Alaska Permanent Fund enabling them to tap into the Constitutional Budget Reserve without the votes from Democrats. It will now take a three-quarters majority vote to return the money to the account. How will this affect the session?

A: I heard back in October that there was a genuine potential that we were going to have to go back in for the three-quarters vote. ... I think that still holds true today and we're prepared to discuss the issue with the minority. Rep. (Ethan) Berkowitz has been very up front with me on what it would take. He's got some ideas and we haven't had an opportunity yet to discuss those ideas. ... It just amounts to whatever it is that they want to hold out for. Hopefully, we can minimize as much as possible any increases in the budget. If it's an override vote (on the Longevity Bonus), I'm not willing to go there.

... I'd like to see that vote done earlier rather than later. I think you could get by doing it at the end of the session but then you're going to be looking at two three-quarter votes probably at the same time and that muddies up things tremendously.

Floor farewell: Speaker of the House Pete Kott, left, says goodbye to Rep. Cheryll Heinze, an Anchorage Republican, on May 22, 2003, at the Capitol after the House adjourned for the last time in 2003. AL GRILLO/ THE ASSOCIATED PRESS

Q: Does your caucus support any of the legalized gambling measures proposed last session such as a statewide lottery or video poker machines?

A: There are a lot of ideas out there floating and one of them is the lottery. I was the one that introduced that lottery bill, and I thought it was a good bill. I still am in support of a lottery bill. The electronic gaming machines, I could be sold on those under the right circumstances. I'd have to see some oversight by the commission. Beyond that there's two other proposals that are out there that are worthy of discussion because they will generate some high income for the state as well as put Alaskans to work. ... One is a full-fledged casino. There's been talk about utilizing the fish plant there that the state owns in Anchorage. ... The other idea that is out there - I've been talking to an individual from Florida - is off track betting. ... They are like banks. You wouldn't know it from a bank unless you walked in and saw the tickets probably torn up on the floor and probably bars in front of the tellers where you make your bet. There is, I guess, a conglomerate that's willing to bring hundreds of millions of dollars to the state to invest in something of that nature. ... You could have horse races, you could have jai alai, you could have dogs from Florida, betting on horses in California and just looking at the futures market. I mean you could have that galley going on at the same time.

Q: If we do legalize some of these gaming options, what do you plan to do to prevent the social ills associated with gambling?

A: Obviously, there are some effects to almost anything you do, negative effects. The social ills associated with gaming are probably no different than those ills associated with pull tabs. We don't do anything right now with pull tabs, so we've still got the folks out there spending more than they should be spending. But it really boils down to personal responsibility. But I would be certainly willing to put a percentage into a pool that would address those kind of concerns and deal with the people who have the problem to get the corrective action taken for them.

Q: Gov. Frank Murkowski has proposed new taxes on cruise ship passengers, cruise ship gambling, smoking, hotel lodging, guided tours and pull-tab gambling. Which, if any, of these have a chance of making it through the Legislature this session?

A: Well, you know it's hard to say. There may be a potential for one of those to make it through, maybe all of them. But I can state that I won't be supporting all of them. When you talk about a cigarette tax, I'm not willing to go through that fight again. I fought it seven or eight years ago, and we already raised the price of cigarettes to a buck a pack and we were No. 1 in the nation, and I'm not going to go back there. The cruise ship head tax, I still think we have some constitutional problems with it. We did have a cruise ship bill that has been in committee and hasn't moved for all of last session, so I don't think that one has a lot of legs. Although, times have changed and maybe members of the caucus would be more amenable to moving forward with something of that nature.

Q: In November many lawmakers will be running for re-election. Will this keep them from passing new taxes this year?

A: We're all in it together but we all have to go back and pass the red-face test in our own districts this time around. It's an election year for everyone and I'm sure that's going to be on the mind of most people when they press that green or red button. They are going to have to be able to substantiate to their constituency why they did it. It may be a little bit different this year from an individual standpoint just because of elections being part of the political process.

There may be a statewide tourism self-imposed tax that I haven't seen the mechanics of it yet. But I think Sen. Therriault is introducing it. It may overshadow any kind of a bed tax that could be proposed. I'm not sure if you want to tack on a tax on a tax. If Therriault's idea goes forward, I don't think you want to come up with another one and hit the same group again.

Q: We are coming up to an election this year and lawmakers are going to want to take back projects to their communities. How do we fund capital projects this year?

A: I know the governor has a plan for funding through the bonding mechanism. We haven't seen the numbers and we haven't seen the details of his plan, but clearly we are going to have to find out what's going to be done before we even think about capital projects. Until we understand clearly how much money there is there's no point in even proceeding ahead with a capital project. ...