The Alaska Senate on Friday voted 15-4 to kill an income tax proposed by the House, all but ensuring the Alaska\u2019s multibillion-dollar deficit will not be solved this year.<\/p>\n
Most of those in opposition said they refuse to raise taxes on Alaskans during a recession.<\/p>\n
\u201cThe Senate enthusiastically ended discussion, at least for this year, on the idea of penalizing them for having a job,\u201d Senate President Pete Kelly, R-Fairbanks, said after the vote. \u201cIt\u2019s not good for the economy, it\u2019s not good for Alaska, it\u2019s not good for our future. Most of all, it\u2019s not needed.\u201d<\/p>\n
Another senator, Sen.<\/span> <\/span>Shelley<\/span> <\/span>Hughes,<\/span> <\/span>R-Palmer,<\/span> <\/span>compared<\/span> <\/span>the<\/span> <\/span>state<\/span> <\/span>government\u2019s spending habits <\/span>to<\/span> <\/span>an<\/span> <\/span>opioid<\/span> <\/span>addict.<\/span><\/p>\n \u201cYou<\/span> <\/span>know<\/span> <\/span>how<\/span> <\/span>it<\/span> <\/span>works<\/span> <\/span>with<\/span> <\/span>an<\/span> <\/span>addiction:<\/span> <\/span>When<\/span> <\/span>someone<\/span> <\/span>has<\/span> <\/span>an<\/span> <\/span>addiction,<\/span> <\/span>they<\/span> <\/span>spend<\/span> <\/span>every<\/span> <\/span>waking<\/span> <\/span>moment,<\/span> <\/span>every<\/span> <\/span>cent,<\/span> <\/span>trying<\/span> <\/span>to<\/span> <\/span>feed<\/span> <\/span>that<\/span> <\/span>addiction,\u201d<\/span> <\/span>she<\/span> <\/span>said on the floor.<\/span><\/p>\n The income tax proposal was a critical part of the coalition House Majority\u2019s plan to erase Alaska\u2019s $2.7 billion annual deficit. The House had previously approved the income tax bill, House Bill 115, then sent it to the Senate for a vote.<\/p>\n The Alaska Department of Revenue has estimated that if fully implemented, HB 115 would have generated $687 million per year for state services. In addition to spending from the Alaska Permanent Fund\u2019s investment earnings, cuts to the state subsidy of oil and gas drilling, and modest budget cuts, the House\u2019s plan would have balanced the state budget by 2020.<\/p>\n That will no longer happen.<\/p>\n \u201cClearly, it\u2019s a setback,\u201d said Speaker of the House Bryce Edgmon, D-Dillingham, after the Senate vote.<\/p>\n Edgmon said it is possible that the Senate and House could agree on other ways to raise revenue, but \u201cthe devil\u2019s in the details, and I\u2019m not going to stand here and tell you what other options may be out there,\u201d he told reporters Friday.<\/p>\n Based on the limited public polling available, the income tax appears to remain an unpopular idea across the state. According to a late February poll conducted by the Alaska Chamber of Commerce, only in Southeast do a majority of residents support the concept. Support in rural Alaska was within the margin of error.<\/p>\n On Friday, 13 Republicans and two Democrats voted against the tax. Four Democrats voted for it. Sen. Bert Stedman, R-Sitka, was excused absent.<\/p>\n Sen. Hughes call the idea of an income tax \u201can attempt by the government, which is sadly addicted to spending, to grab money from others to feed that addiction.\u201d<\/p>\n \u201cI actually think it would be an insane action,\u201d she said of a \u2018yes\u2019 vote.<\/p>\n Four Senate Democrats did cast \u2018yes\u2019 votes.<\/p>\n One of those Democrats, Sen. Tom Begich, D-Anchorage, responded to Hughes\u2019 comment by saying that the true definition of insanity is repeating the same actions and expecting a different result.<\/p>\n Since 2012, the Alaska Legislature has cut the state\u2019s budget 44 percent. An increasing number of legislators and executive branch officials say they believe government is \u201cright-sized\u201d and that further cuts will be difficult.<\/p>\n Last year, the Alaska Senate passed a bill to cut the Permanent Fund Dividend and use a portion of the fund\u2019s investment earnings on government expenses. The House rejected that idea, saying it needed additional elements to balance the effects of a reduced dividend. The Senate again passed a bill this year to cut the dividend and use investment earnings for expenses. The House had suggested the income tax would be a way to ensure rich Alaskans share the burden with poorer Alaskans, who suffer disproportionate effects under a dividend cut.<\/p>\n The tax rejected by the Senate on Friday would have been a progressive one, rising as a person earned more money. A single Alaskan earning $50,000 per year would have paid $992.50. That same Alaskan, earning $200,000 per year, would have paid $7,992.50.<\/p>\n A couple with two children, earning $50,000 per year, would have paid $210. The same couple earning $200,000 would have paid $5,145.<\/p>\n All figures are from the income tax calculator created by the Alaska Senate Majority.<\/p>\n Sixteen percent of the tax\u2019s revenue would have come from nonresidents, according to the Department of Revenue. More than 44 percent of the tax\u2019s revenue would have been paid by individuals and couples earning $200,000 or more per year, according to Ken Alper, director of the department\u2019s tax division. Only 25,712 Alaskans \u2500 about 3 and a half percent of the state\u2019s population \u2500 earn that much, according to the Department of Revenue.<\/p>\n Gov. Bill Walker has repeatedly said he supports a comprehensive fix for the deficit, regardless of its form.<\/p>\n \u201cI\u2019m disappointed with the Senate\u2019s vote this afternoon, but we\u2019ll continue working with both bodies to fix Alaska\u2019s fiscal crisis,\u201d he said in a prepared statement released after the vote.<\/p>\n In the House, members of the Republican minority watched the vote from the Senate gallery and acclaimed the final tally, calling it the best vote of the year.<\/p>\n Among members of the House majority, the reaction was different.<\/p>\n \u201cOf all the options available to us, the do-nothing plan is the worst,\u201d said Rep. Justin Parish, D-Juneau.<\/p>\n \u201cActually, this isn\u2019t the do-nothing plan,\u201d he added after a moment. \u201cIt\u2019s the spend-and-pray plan.\u201d<\/p>\n The Legislature\u2019s constitutional end is Wednesday, and with no end in sight to the debate over the deficit and budget, Edgmon said an extension is \u201cinevitable.\u201d<\/p>\n HOW THEY VOTED<\/span><\/p>\n YES<\/strong><\/p>\n \u2022 Sen. Tom Begich, D-Anchorage<\/p>\n \u2022 Sen. Dennis Egan, D-Juneau<\/p>\n \u2022 Sen. Berta Gardner, D-Anchorage<\/p>\n \u2022 Sen. Donny Olson, D-Nome<\/p>\n NO<\/strong><\/p>\n \u2022 Sen. Click Bishop, R-Fairbanks<\/p>\n \u2022 Sen. John Coghill, R-North Pole<\/p>\n \u2022 Sen. Mia Costello, R-Anchorage<\/p>\n \u2022 Sen. Mike Dunleavy, R-Wasilla<\/p>\n \u2022 Sen. Cathy Giessel, R-Anchorage<\/p>\n \u2022 Sen. Lyman Hoffman, D-Nome<\/p>\n \u2022 Sen. Shelly Hughes, R-Palmer<\/p>\n \u2022 Sen. Pete Kelly, R-Fairbanks<\/p>\n \u2022 Sen. Anna MacKinnon, R-Anchorage<\/p>\n \u2022 Sen. Kevin Meyer, R-Anchorage<\/p>\n \u2022 Sen. Peter Micciche, R-Soldotna<\/p>\n \u2022 Sen. Gary Stevens, R-Kodiak<\/p>\n \u2022 Sen. Natasha Von Imhof, R-Anchorage<\/p>\n \u2022 Sen. Bill Wielechowski, D-Anchorage<\/p>\n \u2022 Sen. David Wilson, R-Wasilla<\/p>\n ABSENT<\/strong><\/p>\n \u2022 Sen. Bert Stedman, R-Sitka<\/p>\n <\/p>\n <\/p>\n Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 419-7732.<\/b><\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The Alaska Senate on Friday voted 15-4 to kill an income tax proposed by the House, all but ensuring the Alaska\u2019s multibillion-dollar deficit will not be solved this year. Most of those in opposition said they refuse to raise taxes on Alaskans during a recession. \u201cThe Senate enthusiastically ended discussion, at least for this year, […]<\/p>\n","protected":false},"author":426,"featured_media":13244,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[34,95],"yst_prominent_words":[],"class_list":["post-13243","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-alaska-legislature","tag-alaska-state-budget"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/13243","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/426"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=13243"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/13243\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/13244"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=13243"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=13243"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=13243"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=13243"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n
\n