Even as members of the Alaska Legislature promote a slow-and-steady approach to fixing Alaska\u2019s $4 billion annual deficit, Gov. Bill Walker said he wants to see fast action on the state\u2019s oil-driven financial woes.<\/p>\n
\u201cOur goal is that we get a sustainable budget by 2019,\u201d Walker said, but no plan being seriously considered by the Legislature meets that deadline.<\/p>\n
The governor held a 30-minute question-and-answer session Wednesday to provide his view on the latest actions taken by the Legislature.<\/p>\n
At the start of this year\u2019s Legislative session, Walker proposed a slate of bills including spending cuts and increased taxes, but his ideas met a lukewarm reception. <\/p>\n
On Tuesday, the 99th day of the Legislative session, lawmakers were not seriously considering any of the tax increases Walker proposed. None had received a hearing in almost two weeks.<\/p>\n
\u201cWe\u2019re not interested at this time on passing any new taxes,\u201d Senate President Kevin Meyer, R-Anchorage, said Monday.<\/p>\n
While taxes aren\u2019t on the Legislature\u2019s agenda, lawmakers aren\u2019t sitting idle. Walker has repeatedly said his plan for solving the deficit is \u201cwritten in pencil, not in pen,\u201d and legislators have taken advantage of that fact.<\/p>\n
Earlier this month, the Senate Finance Committee unveiled a plan built around a proposal to use some of the investment earnings of the Alaska Permanent Fund. The plan also incorporates cuts to state drilling subsidies, spending from the Alaska Permanent Fund, cuts to state government, and reforms to Medicaid and the criminal justice system.<\/p>\n
According to an analysis of that package, the state deficit would not go away (barring an unexpected spike in oil prices) but it would be reduced to the point that the state\u2019s savings would be enough to keep state government operating through at least 2050.<\/p>\n
\u201cWhatever happens, there will be some significant changes,\u201d Walker said.<\/p>\n
The key to a budget agreement, lawmakers have said, is House Bill 247, a proposal to reduce the state\u2019s subsidy for oil and gas drilling. If the state cuts subsidies for drillers, the popular belief is that wavering lawmakers will be more willing to vote for a Permanent Fund plan that reduces Alaskans\u2019 Permanent Fund Dividends in the course of funding government operations.<\/p>\n
A new version of HB 247 was released on Tuesday by the House Rules Committee.<\/p>\n
\u201cI like that there\u2019s some movement,\u201d Walker said of the proposal, but \u201cI\u2019m concerned about the balance on tax credits.\u201d<\/p>\n
As proposed by Walker, HB 247 would have been a net gain of $300 million per year for the state through tax increases and a reduction in the state subsidy.<\/p>\n
House lawmakers were alarmed by the bill\u2019s predicted impact on oil and gas operations within the state, and have gone back and forth on the bill. The latest measure promises savings similar to those offered by Walker\u2019s original bill, but it doesn\u2019t deliver those savings until 2020. Walker\u2019s bill would have brought them immediately.<\/p>\n
The new bill also changes the most contentious portion of the state\u2019s subsidy from a tax credit into a tax deduction. As a credit, the subsidy can be sold by new drillers to raise money before production starts. As a deduction, it can only be used once the driller starts producing oil and must pay production taxes.<\/p>\n
\u201cIt really creates a situation where someone who has current production can take advantage of it much more immediately,\u201d Revenue Commissioner Randall Hoffbeck said.<\/p>\n
Walker said he\u2019ll have to \u201cwait and see\u201d as to whether the new version of HB 247 works for him. \u201cIt all has to fit into the plan,\u201d he said. \u201cAny level of savings we don\u2019t achieve there, we\u2019ll have to find somewhere else.\u201d<\/p>\n
Walker has long said the state\u2019s principal problem is not the deficit itself but the uncertainty it brings. Until the deficit is resolved, he said, Alaskans and Outside investors will be concerned about what the state might do instead of dealing with what it has done.<\/p>\n
\u2022 Contact reporter James Brooks at james.k.brooks@juneauempire.com.<\/p>\n","protected":false},"excerpt":{"rendered":"
Even as members of the Alaska Legislature promote a slow-and-steady approach to fixing Alaska\u2019s $4 billion annual deficit, Gov. Bill Walker said he wants to see fast action on the state\u2019s oil-driven financial woes. \u201cOur goal is that we get a sustainable budget by 2019,\u201d Walker said, but no plan being seriously considered by the […]<\/p>\n","protected":false},"author":426,"featured_media":25128,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[230],"yst_prominent_words":[],"class_list":["post-25127","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-state-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/25127","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=25127"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/25127\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media\/25128"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=25127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=25127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=25127"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=25127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}