After an entire regular session and more than half a special session gone with no deal on a state budget, Gov. Bill Walker met with legislative leaders Monday to roll out a compromise package.
Under the governor’s proposal, people who work in Alaska would pay a set amount each year based on their income.
But the House majority coalition met the package with a cool response. House Speaker Bryce Edgmon, D-Dillingham, said it doesn’t go far enough this year to solve the budget crisis.
“What we saw today being offered really is a scenario that finds the Legislature in an election year back in Juneau fighting intractable budget battles and having to make really tough choices,” he said. “What our coalition has been saying all along is, ‘We need to make those tough choices this year.’”
The concept, known as a “head tax,” is based on a proposal by Fairbanks Republican Sen. Click Bishop. But Walker wants to raise $100 million, twice what Bishop proposed. Under Bishop’s proposal, the tax would range from $50 for people who earn less than $20,000 to $500 for those paid more than $500,000.
Walker also called on lawmakers to pass the Senate version of an overhaul to the state’s oil tax credit system – with one change. Under that change, known as “ring fencing,” oil and gas companies would no longer be able reduce their taxes due on their revenue from one field by their costs to develop another.
Walker also endorsed the Senate version of a bill to draw money from the Permanent Fund to pay for the state government. It would set dividend checks at $1,000.
But Walker supported the House version of the state budget, which includes more spending than the Senate’s.
The governor’s compromise package would reduce the gap between what the state spends and what it raises by nearly 90 percent, from $2.5 billion to $300 million.
The state government will shut down on July 1 if lawmakers can’t reach a compromise.
This story has been updated with comment from House Speaker Bryce Edgmon.
