It was tax day.<\/p>\n
On April 15, the Alaska House of Representatives voted 22-17 to impose Alaska\u2019s first income tax in 37 years.<\/p>\n
Juneau\u2019s two Representatives, Democrats Sam Kito III and Justin Parish, voted yes.<\/p>\n
House Bill 115 heads to a reluctant Senate, and its legislative future is uncertain. Nevertheless, lawmakers on Saturday acknowledged their action was unprecedented in Alaska\u2019s modern history.<\/p>\n
Speaker of the House Bryce Edgmon, D-Dillingham, called it \u201ca very extraordinary day in Alaska\u2019s history.\u201d<\/p>\n
\u201cI think this is one of the most important votes that I or the other members will ever cast,\u201d said Rep. Jonathan Kreiss-Tomkins, D-Sitka.<\/p>\n
Seventeen Democrats, three Republicans and two independents voted yes. Seventeen Republicans voted no, and Rep. Mark Neuman, R-Big Lake was excused absent.<\/p>\n
After the vote, Senate President Pete Kelly, R-Fairbanks, released a prepared statement calling the tax \u201cabsurd on its face\u201d and added, \u201cAs I\u2019ve said many times, the only thing standing between Alaskans and an income tax is the Senate.\u201d<\/p>\n
If HB 115 is approved by the Senate and signed by Gov. Bill Walker, single Alaskans making between $14,300 and $50,000 per year will pay 2.5 percent of their adjusted gross income to the state. Alaskans making more money will pay a higher rate.<\/p>\n
A single Alaskan making $50,000 per year will pay $992.50. Someone making $100,000 per year will pay $2,992.50.<\/p>\n
A couple earning $100,000 per year will pay $1,985. A couple earning $200,000 per year will pay $5,985.<\/p>\n
Since 2012, lawmakers have cut more than 44 percent from the state\u2019s overall budget, according to figures from the nonpartisan Legislative Finance Division. Despite those cuts, the state still faces a $2.8 billion annual deficit, brought about by depressed oil prices.<\/p>\n
The coalition majority in the House has introduced a four-part plan to erase that deficit by 2020. The parts (or \u201cpillars,\u201d to use the majority\u2019s jargon) include cuts to the operating budget, cuts to state subsidies for oil and gas drilling, spending from the earnings of the Alaska Permanent Fund, and some kind of \u201cbroad-based tax,\u201d jargon that this year means an income tax.<\/p>\n
The tax is expected to generate only $687 million to pay down the deficit \u2014 and that not until fiscal year 2020 \u2014 but supporters said it is necessary to balance the burden of fixing the problem.<\/p>\n
\u201cHB 115 will balance and spread the impact equitably,\u201d said Rep. Paul Seaton, R-Homer and a coalition member of the Alaska House Finance Committee. \u201cThis will complete the comprehensive, sustainable fiscal plan that so many Alaskans have asked us to do.\u201d<\/p>\n
Speaking on the floor, Rep. Andy Josephson, D-Anchorage, said passing the tax is necessary to pass other components of the deficit-fighting plan.<\/p>\n
\u201cA number of my colleagues are not going to support a dividend-only cut. They want a balanced plan. A balanced plan. And I can\u2019t blame them,\u201d he said.<\/p>\n
Rep. Justin Parish, D-Juneau, said no one likes the idea of a tax, but he\u2019s willing to support one to avoid greater budget cuts that will harm Alaskans. One in three Juneau jobs are funded directly by state or local government, according to figures from the Juneau Economic Development Council.<\/p>\n
Parish\u2019s voice broke as he spoke about how some students in the Juneau School District don\u2019t get enough to eat.<\/p>\n
\u201cAt this point, cuts are our most damaging option economically and \u2014 oh my goodness, there\u2019s no comparison \u2014 morally,\u201d Parish said.<\/p>\n
Members of the House Republican Minority constituted all 17 \u201cno\u201d votes Saturday, and most said they had no interest in raising taxes when Alaska is in a recession.<\/p>\n
That recession, like the state\u2019s deficit, has been driven by falling oil prices.<\/p>\n
\u201cI think ultimately this is going to lead to a smaller economy for the state of Alaska, and I don\u2019t think a smaller economy is good for anybody,\u201d said Rep. Dan Saddler, R-Eagle River.<\/p>\n
Rep. David Eastman, R-Wasilla, said he was wearing black in honor of the day.<\/p>\n
Rep. Lora Reinbold, R-Eagle River, added that she does not feel that state government has been sufficiently cut.<\/p>\n
\u201cWe have not cut to the bone. \u2026 There is so much to still cut,\u201d she said.<\/p>\n
Rep. Lance Pruitt, R-Anchorage, was among those who pointed to the irony of passing the tax bill on federal tax day (the deadline is officially Monday, because tax day falls on a weekend this year).<\/p>\n
\u201cI find it also ironic that it\u2019s the same day the Titanic went down,\u201d Pruitt said.<\/p>\n
According to a statewide poll conducted by the Alaska Chamber of Commerce at the end of February and start of March, a majority of Alaskans remain opposed to an income tax.<\/p>\n
The sole region of the state to support the tax is Southeast Alaska, where the poll found 51 percent of residents support the idea.<\/p>\n
Outside the Capitol on Saturday morning, as legislators prepared to vote, a small group of protesters had gathered to request President Donald Trump release copies of his income tax statement.<\/p>\n
Among them was Marian Call of Juneau, who said she wished she\u2019d organized a \u201cplease tax me\u201d rally instead.<\/p>\n
Call pointed out that Alaska\u2019s state government is still majority-funded by oil revenue, and she feels that an income tax would force state government to become more accountable to ordinary Alaskans.<\/p>\n
\u201cWhoever pays the bills owns the house, and I want to own the House,\u201d she said as she aimed a thumb at the Capitol.<\/p>\n
<\/p>\n
<\/p>\n
\u2022 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":"
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