Alaska lawmaker wants to examine state’s credits, exemptions

  • By Becky Bohrer
  • Sunday, February 1, 2015 11:10pm
  • News

JUNEAU, Alaska — Gov. Bill Walker this past week said he wasn’t sure the state could continue to afford a film tax credit program, given Alaska’s budget situation. But that program is just one in a myriad of tax breaks the state provides.

Rep. Steve Thompson, co-chair of the House Finance Committee, wants to take a closer look at the state’s so-called indirect expenditures, things like credits, discounts or exemptions, and have a discussion on which are still useful and which might need to be updated or scrapped.

Thompson and his staff are working off a report compiled by the Legislative Finance Division that reviewed indirect expenditures under five state agencies. The report, born of a law spearheaded by Thompson last year to initiate a staggered review of tax breaks under agencies throughout state government, is about 180 pages. A few exemptions cited in the report date as far back as the late 1940s.

“There’s a lot of dollars that are possibly involved here, that’s the amazing thing,” said Thompson, R-Fairbanks. “We were kind of shocked at the total dollars of some of these that have a potential to be revised and to save the state or bring the state additional revenue.”

One example raised by Thompson’s office: a discount of up to $50,000 for wholesalers to affix stamps to cigarette packs.

The state collects a tax on cigarettes imported into Alaska for sale or personal use through the sale of tax stamps. Valid tax stamps must be affixed to cigarette packs for cigarettes sold in Alaska, with few exceptions, according to the Department of Revenue. The report recommends scrapping the discount, saying affixing the stamps should be considered a cost of selling smokes in Alaska. It estimates the annual foregone revenue to the state for that discount at more than $300,000.

The report recommended, among other things, reconsideration of current tax rates for motor fuels and reviewing Fish and Game license fees. It made no recommendation as to whether to continue, modify or end the film tax credit program.

Thompson’s office plans to discuss the report, and possible recommendations for how to move forward, with the House Finance Committee soon.

In the meantime, here are three things to watch for in the Legislature this week:

—FEDERAL OVERREACH: The outrage continues in Juneau over recent federal proposals that state political leaders see as further examples of the feds overstepping their bounds.

House Resources plans hearings Monday on resolutions supporting drilling in the coastal plain of the Arctic National Wildlife Refuge and opposing designating the plain as wilderness, a designation President Obama plans to ask Congress to approve. Senate Resources on Wednesday plans to hear an overview of the statehood compact and Alaska National Interest Lands Conservation Act.

—CURRICULUM ON CONSTITUTIONALISM: House Education on Wednesday is scheduled to hear HB 30, which calls for a curriculum segment in the history of American constitutionalism to be taught to secondary school students. The bill is from Republican Reps. Wes Keller, Dan Saddler and Bob Lynn. A similar proposal died during the last Legislature.

—PROPOSED GAS PURCHASE: The Senate Special Committee on Energy plans a hearing Thursday on the proposed purchase of Pentex Alaska Natural Gas Co. LLC by the Alaska Industrial Development and Export Authority, or AIDEA.

AIDEA recently announced a letter of intent to make the purchase.

That raised concerns among lawmakers about such things as a lack of public discussion about the proposal and having a public corporation of the state buy a business.

Walker said he welcomes lawmakers’ input.

“But the ultimate goal is to get a solution to the high cost of energy in Fairbanks that’s been going on and on and on for much longer than it should have,” he said.

Online: Alaska Legislature: http://akleg.gov/

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