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Alaska Gov. Walker's tax bills languish as House, Senate push budgets forward

  • Author: Nathaniel Herz
  • Updated: September 28, 2016
  • Published March 14, 2016

JUNEAU — Alaska legislative leaders said they'd get down to the tough business of raising money to close the state's $3.8 billion deficit after they passed an operating budget.

But now that both chambers have done just that, House and Senate committee schedules this week show lawmakers taking up just two of the 10 revenue-producing bills proposed by Gov. Bill Walker.

The House passed its operating budget in a marathon session that ended early Friday morning, while the Senate's budget vote took place Monday afternoon.

Republican legislative leaders like Sen. Pete Kelly, R-Fairbanks and co-chair of the Senate Finance Committee, said they needed to "clear the decks" by passing a reduced operating budget before giving serious consideration to Walker's 10 pieces of legislation, which include a personal income tax bill and tax increases on industries and consumption.

But in the Senate, just one of Walker's bills is getting a hearing this week. That's Senate Bill 128, to restructure the $52 billion Alaska Permanent Fund to help pay for state government, which reduces residents' dividends in the process.

Its companion, House Bill 245, is also getting a hearing in the House Finance Committee — but not until Friday. The only other of Walker's bills scheduled for a hearing this week is his legislation to increase oil taxes and scale back the state's $500 million oil and gas tax credit program.

That measure is scheduled for four hearings in the House Resources Committee this week, though none in the Senate.

Even as lawmakers are scheduled to hold information sessions this week on driverless cars and drones, and hearings on bills to create a civics education task force and to designate a Post-Traumatic Stress Injury Awareness Day, no action is scheduled on Walker's eight other bills, like the income tax and tax increases on commercial fisheries, alcohol and motor fuel.

Walker, in an interview Monday, praised what he said was lawmakers' "phenomenal" progress on the operating budget. But he added that a full fiscal plan would require more than just an operating budget, plus new revenues from his Permanent Fund and oil-tax legislation.

"That's not a plan — those are pieces to a plan," Walker said. "I need a whole plan, so we can tell Alaska and we can tell the world we've fixed the problem."

In interviews Monday, GOP legislative leaders maintained that all of Walker's revenue bills are still in play, with the exception, perhaps, of his income tax legislation, which is projected to raise $200 million.

That measure has not been given a single hearing in the House and it's gotten just two in the Senate, where it's still languishing in the first of two referral committees. Its last hearing was Feb. 25.

"You never say never, but I don't see a lot of support to move that," said House Speaker Mike Chenault, R-Nikiski.

The slow progress on the revenue legislation is worrying some Democrats, who say a plan to balance the budget solely with Permanent Fund earnings would be unfair, based on low-income and rural Alaskans' reliance on their annual dividend checks.

"If the public is going to chip in, they want to know that the most privileged in society are also chipping in," Rep. Les Gara, D-Anchorage, said in an interview. "You can't just have a plan that disproportionately hits the poorest Alaskans."

Senate President Kevin Meyer, R-Anchorage, said his chamber was waiting to act on the tax and revenue legislation until members receive an economic analysis of the impacts of the different bills. He said that would come Tuesday afternoon, when Gunnar Knapp, an economist from the University of Alaska Anchorage's Institute of Social and Economic Research, is scheduled to speak before the Senate Labor and Commerce Committee.

Monday was day 56 of the 90-day legislative session.

Another member of the Senate's leadership, Sen. John Coghill, R-North Pole, said the Legislature may not have time to pass any revenue-generating bills beyond the legislation affecting the Permanent Fund and oil and gas taxes.

"My guess is, that takes up a good chunk of the session, and if we have to go into the other broad-based taxes, it probably would extend the session out — which many of us are not willing to do," said Coghill, the Senate's majority leader.

But lawmakers may not be able to pay for their budget unless they include other revenue-generating measures in their financial plan.

That's because House Democrats have said they won't vote for a budget that only relies on savings and earnings from the Permanent Fund — and their votes are needed based on restrictions on spending from a key state savings account, the Constitutional Budget Reserve.

Sen. Johnny Ellis, D-Anchorage, said he was worried that lawmakers are beginning to risk pushing off work on the revenue legislation to the point where there won't be time to pass it. "Some of the most conservative legislators are driving the bus, and we're getting to the edge of the cliff," Ellis said in an interview.

How things end, Ellis added, will likely depend on the governor, who can call lawmakers back to a special session if he doesn't like the result of their first 90 days in Juneau.

"It's really up to Gov. Walker how long he's going to keep us here, to focus our attention on having a balanced plan," Ellis said.

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