Governor Puts Income Tax Back on the Table
September 28, 2017
Senate Bill 54 would give courts the ability to impose jail time for first-time Class C felonies or repeat theft offenses. This would act as a potential deterrent and encourage offenders suffering from addiction to seek treatment. The administration is proposing a payroll tax of 1.5 percent of wages earned by Alaskans and non-resident workers, capped at $2,200 or twice the previous year's permanent fund dividend amount-whichever is higher. For example, a person who earned $50,000 would pay $750 in payroll tax and receive a PFD. According to the administration the proposal is expected to generate between $300 million and $325 million - about 15 percent of which is projected to come from non-resident workers, who in 2015 earned more than $2.7 billion (PDF). Under this proposal, Alaskans would pay the lowest taxes on a nationwide basis. No other state currently has a cap for a maximum tax rate. Currently Alaskans pay no income tax. "My team and I have been meeting with majority and minority members of both the House and Senate for the past several months," Governor Walker said. "We have cut more than 44 percent from state spending over the past four years, and drawn more than $14 billion from savings. We will continue to find efficiencies. With the downturn in oil prices, however, it's clear that we must find a new source of revenue to pay for troopers, teachers, transportation and other essential services. We must end the uncertainty for a healthy economy." Sen. Pete Kelly, R-Fairbanks, President of the Alaska Senate said, “The Senate Majority welcomes additional discussion on the state’s fiscal problems, which we believe are best addressed by reducing government budgets and instituting a spending limit. We have asked the administration, before new taxes on working Alaskans are considered, to provide a budget for the coming fiscal year that includes reductions in spending, and a revised revenue forecast with responsible estimates of oil price and production. With this information in hand, the Senate will be able to accurately determine what, if any, actions must be taken to raise additional revenue from Alaskans. We want to make it clear that any ‘complete plan’ to address our fiscal problem cannot solely reach into Alaskans' pockets for more government money, but must include budget reductions. Government has to do its part.” Quoting a news release from the Governor, since 2014, the Walker-Mallott administration and the legislature have cut state spending by $1.7 billion, 29 percent. Representative Colleen Sullivan-Leonard (R-Wasilla) said he is concerned with Governor Walker's request for a fourth session is an effort by the Governor to push an income tax on hard working Alaskans. Sullivan-Leonard said, "Interesting to note that the Administration believes the income tax will bring in over $300 million dollars of revenue, when our House Republicans clearly identified reductions in state government to the tune of over $300 million. These were thoughtful reductions that were not even given fair discussion in committee or on the House Floor." Sullivan-Leonard said, "Now is not the time to impose new taxes, instead we should be reducing the size of government. My community continues to be challenged by the recession and are faced with a staggering 8.4% unemployment rate. This is after taking half of their PFD checks!" Sullivan-Leonard said he continues to request that any special session be held in Anchorage to facilitate meetings closer to the home of many legislators to decrease per diem and travel expenses. It is expensive to travel to Juneau and we don't need to spend money the state doesn't have. "In looking at revenue that may assist the challenges with public safety and SB 91," Sullivan-Leonard said, "it has been reported from the Division of Revenue that the taxes collected from cannabis sales have reached over $1.4 million dollars since October 2016. May 2017 showed a collection of $276,600, the highest recorded thus far for cannabis tax. That money should go directly into needs for Public Safety to fight the increase in drugs and crime in our communities.” House Republicans say they stand ready to address the issues impacting Alaskans across the state: crime and the economy. House Republicans say they will once again defend Alaskans against hurtful impacts from government overreach through taxation. “Call it what you want, a payroll tax, head tax, whatever - it’s an income tax and it’s not what Alaska needs,” said Republican Whip Mike Chenault (R-Nikiski). “The conversation cannot be turned into a plea for taking money from hardworking Alaskans.” “Our Coalition’s number one goal is to respond to the ongoing fiscal crisis and recession by developing and passing a comprehensive fiscal plan, as we did during the regular session. However, our commitment in the House is meaningless unless the Senate follows suit,” said Speaker of the House Bryce Edgmon (D-Dillingham)." Edgmon said, “We are cautiously optimistic that the demonstrated need for fiscal solutions will be recognized by the State Senate. If they work with us and we all work with the Governor, solutions can be found that will protect the economy and the thousands of jobs and livelihoods at risk from continued legislative inaction.” Regarding Senate Bill 54 Sen. Pete Kelly said, “The Senate Majority supports a special session in October to address crime. Alaskans have legitimate concerns about our laws holding offenders accountable. The Senate already passed the legislation, SB 54, toughening penalties for certain crimes. We offer our support to the House to do the same, and stand by to work out any differences. Alaskans should feel safe in their homes and communities, and it is incumbent upon the Legislature to do our part to ensure criminals face consequences." “The members of the Coalition are committed to protecting public safety and ensuring that the Alaska State Troopers and other law enforcement agencies have the tools and resources they need to protect Alaskans in their homes and businesses,” said Alaska House Majority Coalition Speaker Edgmon. “We will work cooperatively with the members of the State Senate and the House Minority Caucus on the proposed changes to Alaska’s criminal justice statutes called for in Senate Bill 54, which Governor Walker included on the call for the upcoming Special Session.” Alaska Senate Democratic Leader Berta Gardner (D-Anchorage) said, “In addition to fiscal matters, I was pleased to see that the Governor has added the polishing of the crime bill to our call. Safety of our people is of utmost priority, and that means having the sense to maintain those things which will make our state safer in the long run, and acknowledging the troubled spots that need to be fixed. We must keep cool heads and not throw out the baby with the bathwater. We all want the same thing in the end, and careful study, willingness to listen, and leaving politics out of it is the way to get there.” “I’m ready to send a message loud and clear to criminals: I refuse to tolerate their hurting and stealing from Alaskans,” said Republican Leader Charisse Millett (R-Anchorage). “Through town halls and one-on-one meetings, I’m gathering as much input as I can from my district, law enforcement and the Department of Law, before heading to Juneau next month. We will be ready to give officers and judges the tools they need to keep Alaskans safe.”
Reporting and Editing by Mary Kauffman, SitNews
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