JUNEAU, Alaska (AP) – A co-chair of the Alaska House Finance Committee said he would like to see a proposal to reinstitute a personal state income tax advanced for a floor vote. But it faces opposition in the Senate and Rep. Steve Thompson couldn’t say whether it would even clear the House.
Gov. Bill Walker has proposed an income tax as part of a broader plan to
confront an estimated $4 billion state budget deficit exacerbated by low oil prices. Key pieces of that plan including changes to Alaska’s oil and gas tax credit system and a structured, annual draw from the earnings of the Alaska Permanent Fund remained unsettled as lawmakers entered what was scheduled to be their last weekend in session.
Walker has said he sees spending cuts, restructuring of permanent fund earnings and the dividend program and new
revenues that include a broad-based tax as must-haves this year to set a path for a
sustainable, balanced budget. He has said his definition of a broad-based tax
would include an income or sales tax. A sales tax has not been proposed this session.
Thompson, a Fairbanks Republican and a House Finance co-chair, said the state is facing difficult times.
“We’ve got to throw it all out on the table and try to come up with something to slow down the draw on our savings,’’ he told reporters Thursday.
Walker also has proposed a series of tax increases. House Finance rolled versions of three of those affecting motor fuels, mining and fisheries taxes into one bill.
The income tax, as proposed by Walker, would raise an estimated $200 million in fiscal year 2018. It also would require adding staff to help administer the tax.
Walker wants things “that are not even on the possible list right now,’’ Senate Majority Leader John Coghill, R-North Pole, said. He cited the income tax as an example. Legislators are having a hard enough time coming to terms on issues like tax credits, he said.
If lawmakers plan to use the constitutional budget reserve to pay for costs not otherwise covered, 30 votes would be needed in the House, meaning support would be necessary from within the Democratic-led minority. The minority sees resolution on the credits issue as key.
Meanwhile Friday, the Legislature planned to consider for confirmation Walker’s appointees to boards and commissions and his pick for commissioner of the Department of Corrections.
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