Morning Headlamp — House Majority Introduces Income Tax, Cuts to Permanent Fund Dividend

Days after introducing a plan to increase production taxes on Alaska’s oil industry, the Alaska House Majority unveiled a plan to close the remainder of the multi-billion dollar deficit by implementing a state income tax and tapping into Permanent Fund earnings. H.B. 115 would require Alaskans to pay a state income tax equal to 15 percent of their federal liability and make it so that 4.75 percent of the overall Permanent Fund’s $56 billion value is drawn annually from the earnings reserve account and put into the general fund. Two-thirds of the draw would go to government operations, and one-third would be spent paying dividends to Alaskans.

Headlamp would encourage the House Majority to remember what happened last session when legislators tried to implement taxes before they made a legitimate effort to reduce the size and scope of state government. GRIDLOCK. How does the Majority even know the size of the “gap” they have to fill if they haven’t completed the operating and capital budgets yet?   

Alaskans are near the midpoint of their window to apply for 2017 Permanent Fund dividends. Last year, more than 643,000 Alaskans received $1,022 dividends, reduced from an original total of $2,052 after Gov. Bill Walker vetoed part of the legislative transfer of money meant to pay for them. Walker said at the time that the move was necessary to preserve the future of the dividend, but was criticized by the state House’s Republican majority for taking “money from Alaskans’ pockets.”

Alaska lawmakers are examining their own budgets as they prepare to ask their constituents for a reduction in their Permanent Fund Dividend and to bear an income tax. Lawmakers have faced persistent questions about their own spending on travel and salaries, even as some legislators have called for steeper reductions to Gov. Bill Walker’s executive branch agencies amid the state’s budget crisis. House Rules chair Gabrielle LeDoux initially proclaimed a limitation on staff and salaries, however, many in the majority, including Rep. LeDoux have ignored those limitations.


First Reads

House Democrats introduce income tax, plan to tap Permanent Fund earnings to close deficit
KTUU, Austin Baird, February 10, 2017

Haven’t applied for your Permanent Fund dividend yet? Get it done, state says.
Alaska Dispatch News, Chris Klint, February 13, 2017

Alaska lawmakers eye their own budget for reductions
Alaska Dispatch News, Nathaniel Herz, February 13, 2017

Deficit-cutting plan from House majority uses income tax, Permanent Fund earnings
Alaska Dispatch News, Nathaniel Herz, February 12, 2017