Legislative Report – January 2016

Legislative Report – January 2016
Report submitted by Lindsey Williams

 

During the Second Session of the 29th Legislature, the Budget is going to be the main focus. Alaska is now facing a $3.4 billion deficit (and growing). Governor Walker introduced 7 new tax bills. All of his proposals are tax increases. Below is a summary of the proposed tax increases prepared by the Walker administration:
 
  • Mining Tax (SB 137): Increase from 7% to 9% for mining income over $100,000, estimated $6 million to be generated.
  • Fishing Tax (SB 135): 1% surcharge on top of landing/business tax, $18.3 million to be generated.
  • Cruise Ship Head Tax (SB 136): elimination of tourism tax exemption, $15 million to be generated.
  • Fuel Tax (SB 132): Increase of $0.08 per gallon for highway fuel, increase of $0.032 to $0.10 for jet fuel, increase of $0.047 to $0.10 for aviation gas and increase of $0.05 to $0.10 for marine fuel, $49 million to be generated.
  • Alcohol Tax (SB 131): Increase of $0.10 per standard drink, $40 million to be generated.
  • Tobacco Tax (SB 133): Increase of $1.00 per pack, $27 million to be generated.
  • Oil Production Tax (SB 130): Increase tax floor from 4% to 5%, prevent carry-forward credits from reducing the tax floor below 0, $100 million to be generated.
Senator Anna MacKinnon gave an excellent presentation on the state’s fiscal situation at our December luncheon. Below are two graphs. The firsts outlines each agency’s percentage of the budget. Education and Medicaid dwarf most other agency operation costs.  The second graph demonstrates that our savings account will be depleted by 2018 unless additional reductions are made.

 

Other Bills/Topics of Interest

Senator John Coghill has been working on comprehensive Criminal Justice Reform Legislation estimated to save the state over $424 million over the next ten years.  The Alaska Criminal Justice Commission released a report with recommendations in three major areas: pre-trial detention, community supervision, and sentencing. Here is a link to the full report.  And here is a link to his press release.

Senator Cathy Giessel introduced SB 44 “Union Exemption Based on Religious Conviction.  The bill is now is the Senate Judicial Committee.  Follow SB 44 here.

The Senate Oil and Gas Tax Credit Working Group met during the interim, hearing from The Alaska Department of Revenue, Oil and Gas Companies, Utilities, Native Corporations and other stakeholders. View all presentations and the Summary Report with Findings here.

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