Dividend, tax vote bills could complicate governor’s budget

  • By Becky Bohrer
  • Monday, January 8, 2018 11:06pm
  • News

JUNEAU — Bills introduced ahead of the new legislative session could complicate Gov. Bill Walker’s plans to address Alaska’s budget and tackle infrastructure projects.

Two new Senate proposals — from Republican Bert Stedman and Democrat Tom Begich — seek to enshrine a dividend from the Alaska Permanent Fund into the state constitution.

Similar measures were introduced last year but pushed aside as legislators delayed action on a plan that would use fund earnings to help pay for state government and change how dividends are calculated.

That debate is expected to be reignited this session, as the state grapples with an ongoing deficit.

Some use of earnings is widely seen as inevitable; but how much and what that means for the dividend is up for debate.

Stedman said a structure should be in place to ensure lawmakers don’t dip into the fund in a way that will hurt it. He said he cautioned colleagues last year that the level of draw previously considered was too high and the amount for dividends was too low.

“We need to go back to table, rethink what we’re doing and start with the premise of, How do we protect the permanent fund, not how much money we can get out of it to run the state,” said Stedman, who is from Sitka.

The fund’s principal is constitutionally protected but the dividend currently is not.

The past two years, the formula for doling out dividends has not been followed and the size of the check — paid to qualified Alaska residents as their share of the state’s oil-wealth —has been limited.

Stedman and Begich have taken different approaches in proposing to amend the constitution to set limits on draws and to protect a dividend, setting new dividend calculations.

Begich, who is from Anchorage, said added protections for the dividend are important.

Another bill released Monday, from Republican Sen. Kevin Meyer, calls for voter approval of any broad-based income or statewide sales tax before it takes effect.

Meyer, however, said legal concerns were raised with that approach so he plans to revise the bill to call for an advisory public vote on such taxes instead.

“I see this as an opportunity for the Legislature to get a feel for what the general public wants or doesn’t want,” he said. “And I think if the Legislature feels like a tax is absolutely necessary, then they need to convince their constituents and the public of the need.”

Walker, a former Republican no longer registered with a party, has proposed a wage tax to help pay for deferred maintenance and community infrastructure projects. He said the tax would be limited to three years.

Meyer said he hasn’t spoken with his caucus about his bill. But the Senate has been cool to the idea of new taxes. During a fall special session, Walker proposed a wage tax as a way to help address the deficit. The Republican-led Senate did not act on it.

Earlier last year, the Senate rejected a proposed income tax, arguing that it was ill-advised during a recession.

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