Public testimony was split Friday on a bill that would introduce an income tax and use money from Permanent Fund earnings to pay for state government.
Homer resident Julia Person supported House Bill 115.
The measure would create a state income tax that’s 15 percent of federal tax liability and set Permanent Fund dividends at roughly $1,100.
“Living in Homer, a see a lot of people who make a lot of money here in Homer, seasonal workers – and yet other than the sales tax, they don’t participate in supporting our infrastructure, but they utilize it,” Person said.
Roughly 80 residents signed up to testify on the bill.
Martin Stepetin of Juneau told the House Finance Committee he also supports the bill. He would like to see more protection for the Permanent Fund.
“We have a situation right now where business in Alaska is holding their breath,” Stepetin said. “People don’t want to spend money because nobody knows what’s going to happen. So we need to do something here in this building to get it done.”
But Palmer resident Shannon Connelly said the bill would steal from the Permanent Fund and residents’ pockets.
“You’ve created a spending monster and now that the oil prices are down, you refuse to decrease your spending. Instead, you expect the working citizens of this state to pay for your incompetence,” Connelly said. “If I budgeted as you do, I would be in jail.
Fairbanks resident Barbara Haney agreed the Legislature hasn’t been disciplined in its spending.
“I mean, I don’t know,” Haney said. “You guys legalized marijuana, because there was supposed to be all of this revenue, which apparently has not come to fruition. Maybe you guys are smoking it, because I look at this bill, it’s not even going to catch a dent in any of the fiscal problems.”
Marijuana sales began in October, and roughly $236,000 were collected in the first three months. The state has a $2.7 billion gap between spending and the amount of revenue raised in oil royalties, taxes and fees.
The Senate has discussed two other bills that would draw money from the Permanent Fund to pay for the budget. These bills don’t include an income tax.
