Gov. Bill Walker and his top aides tried to make the case for enacting a new tax to a group of business and political leaders Friday.
The state must figure out a more sustainable way to pay for services, Walker said.
He spoke at a breakfast hosted by the nonpartisan think tank Commonwealth North in Anchorage.
“It’s not fun to roll out stuff involving the word – I don’t know how many ways you can disguise the word tax – but we just say it the way it is. It’s a tax,” Walker said. “We’re at the point where we can no longer be the only state in the nation that doesn’t have a broad-based tax.”
Walker has proposed a tax of 1.5 percent on wages and self-employment income. There would be a limit. No one would pay more than twice what they receive in an Alaska Permanent Fund dividend.
Revenue Commissioner Sheldon Fisher said the tax would help stabilize the state’s economy. It would raise an estimated $320 million.
Fisher said that while there are more opportunities to reduce the cost of government, the state has already made deep cuts.
“When we talk about rightsizing government – when people talk about it – my argument is going to be that we need to be talking about the programs we have,” Fisher said. “It’s easy to kind of say, you know, ‘State government is bloated, the departments are bloated, we know we can – they can do this more efficiently.’”
Walker’s chief of staff Scott Kendall said the lack of a broad-based tax creates what he called the “Alaska disconnect.”
He said that’s when growth in military or private-sector jobs lead to higher government costs without providing revenue to pay for the costs.
“The F-35s coming to Fairbanks – phenomenal for Fairbanks, phenomenal for North Pole – at the end of the day will actually cost the state money: more public safety, more schools for kids, more wear and tear on the roads,” Fisher said. “That’s the Alaska disconnect.”
Kendall said industries – including the oil industry – will wonder whether they will have to bear the burden until the state has taxes that rise with growth.
A special session on the tax bill and a second measure to increase jail times for offenses is scheduled for Oct. 23 in Juneau. Walker could add more items to the special session agenda.
- The Juneau Assembly declined to pass a broaden sales tax exemption for seniors. Opposition from businesses prodded elected officials to refer the initiative back to committee.
- Fines for pet owners whose for critters scooped up by animal control officers have gone up. The fees hadn't been adjusted for nearly 17 years.
- Local education officials are applying for state money to replace and repair leaky roofs at several Juneau schools. About $5 million is coming in over the next five years earmarked for school maintenance from sales tax money that voters approved in the Oct. 3 election.
- "They’re calling it GTA, grand theft Anchorage, right now," said Rep. Lora Reinbold, who says she wants to repeal Senate Bill 91. "It’s outrageous, what’s going on in the city that I love.”