A: Well, we have met with the administration and have a little bit of a heads-up on some of the issues that are going to be confronting us this year. Of course, dealing with the budget and the governor's proposal trying to get greater efficiency is going to be one of the priorities.

... There's also a problem with the workers' comp system that is going to require a multi-phased fix. We want to move forward with any areas that are remaining dealing with permit streamlining so that we can hopefully jump-start the extractive resources here in the state. And of course the gas pipeline and any issues surrounding moving forward on a gas pipeline are going to be high on people's priority lists.

Senate leader: Senate President Gene Therriault confers with Senate Majority Leader Ben Stevens, right, on May 15, 2003, at the Capitol. This spring Therriault, of North Pole, is in his second year as Senate president. AL GRILLO/ THE ASSOCIATED PRESS

I think you are likely also to hear quite a bit of discussion, and I hope it's going to be a very controlled and reasoned policy discussion, on the POMV concept (see page 5 for discussion of POMV) that's been brought to us by the trustees. That, of course, has been advocated by the trustees appointed by a Democratic governor and the trustees appointed by a Republican governor. That's something that I think really warrants reasoned discussion by both sides of the aisle.

Q: Speaking of POMV, do you believe there is support in your caucus right now for adopting an endowment plan for the Alaska Permanent Fund?

A: I think not everybody in the Senate majority is unified on that issue. Some people just have questions and they have not had a forum to really get their questions out and answered. If it is just a purely clean management mechanism, I think that is what would get the most votes in the Senate majority. And of course, with only 12 votes we don't have the 14 that are required to actually pass the measure and put it on the ballot for the people in the state to take action on. So whatever happens, if anything happens on the Senate side, it will take a combination of majority and minority votes to pass it. ...

Q: You said it might have a better chance if it is purely a management mechanism. At this time are you supporting using some of the earnings of the permanent fund through this POMV structure to pay for some of state government and where does your caucus stand on that?

A: We have not met and discussed these things at length. I believe, though, a majority of the caucus members would say that the issue of whether we change the management mechanism and the payout mechanism is completely separate from what the Legislature does with the fund. So I think that the most support is there for just a pure question on the management structure, and the issue on how funds are utilized remains the same as it is today. All of the earnings of the permanent fund are available to the Legislature, and we have chosen to pay out a dividend, cover some costs of the permanent fund and that's all. And so I don't think that they are linking any change to that use to the change in the management structure.

Q: Do you think the Legislature will produce a long-range fiscal plan that includes a broad-based tax such as an income or sales tax this session?

A: I do not believe that an income or a sales tax will be passed this session. It is interesting when you say a long-range plan. My own personal belief is that we'll get to that solution incrementally, just like the problem was created incrementally. Quite often the people that use the buzzword of the long-range plan use it somewhat to hide behind. They don't then come out with specifics of exactly what they think all the components of that plan are. And of course the Legislature cannot pass one bill that is the magic silver bullet.

Q: What are thoughts so far on the governor's budget that was recently released. There are new taxes on cruise ship passengers, gambling, smoking, hotel lodging and guided tours. What parts of the plan are you and your caucus looking at very closely?

A: ... I think many of those issues are going to have a tough go in the Legislature. And my comments after the governor did put his budget out were that he's met his statutory obligation; now that the budget is in the legislative arena we'll run it through the committee process, and we'll find those areas where we can agree and we'll look at compromise on those areas where we disagree.

I need to personally look at the legal argument in the governor's switch - seemingly switch - in policy on the cruise ship taxation issue. I personally think there are still some legal concerns there that might not be surmountable. So if that's true, I'd rather not go down a path knowing that it just leads us into litigation that we're likely not going to win.

Q: In November many lawmakers are going to be running for re-election. Does this keep them from passing any substantial taxes this year?

A: It depends. What do you mean by substantial? Is a tax that raises $10 million substantial or a 2 percent tourism tax (which), depending on how you structured it, could raise $15 to $20 million? I think there will be some consideration on some of those things. The cruise ship tax that the governor has proposed could eventually - if the legal issues are resolved - it could be successful. Are those substantial? I would say that anything that raises millions of dollars is substantial. If you are talking about an income tax that raises a couple hundred million dollars, that's probably not going to be passed this year. Part of it is the upcoming elections and that dynamic. A part of it is just a philosophical difference of opinion on whether we are to the point that we need to have that kind of tax or not. There's a variety of things, so it's not all going to be driven by the upcoming election.

Q: There's the argument that increasing gambling in the state will lead to greater social ills such as increased alcoholism. Do you think those are realistic concerns and, if so, what will you do to deal with some of those side effects of gambling?

A: I think that's part of what drives the concern amongst members who are not supportive of gambling. And rather than have gambling and then say we'll deal with those side effects there are those of us that say perhaps we ought not do this because there are side effects that are more serious than the amount of revenue that's derived. I have spoken to legislators that have been to conferences out of state where they have talked to members of legislative bodies that have organized gambling and their advice to our members was don't do it. So I'm sure there will be a robust debate on the issues and on the side effects, whether they're real, what the costs really are and we'll see what the outcome is. ...

Q: The retirement benefits for the Public Employees' Retirement System and the Teachers' Retirement System are under-funded by $4.2 billion. What is the Legislature doing this session to deal with the situation?

A: Well, it's a long-term problem that's going to require a long-term fix, so the immediate issue is whether the funds are enough to pay out the immediate benefits for this year and the next couple of years. We'll probably have to increase our contribution rate in their laws in the amount of increase that can be made. Long-term, the commissioner of Administration has put together a working group between members of the PERS board and the TRS board to look at structural changes that could be made long-term that would help with the problem too.

I know there is some concern through the grapevine that putting together that task force has turned into "there's a plan afoot to eliminate retirement." And of course for current employees you can't eliminate retirement, and I can't imagine that even for future employees that the state's not going to have a retirement system, or the school districts. That's not going to happen. ...