Lawmakers set to grapple with new revenues in next legislative session

Published: Jan. 14, 2020 at 6:26 PM AKST
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The Alaska Legislature is set to consider new revenue options when it convenes for its next regular legislative session on Jan. 21.

Sen. Click Bishop, a Fairbanks Republican, introduced two bills in 2019 to bring in new revenues for the state: a reintroduction of the education head tax and a doubling of the motor fuels tax.

The education head tax would levy $30 from the first paycheck of the year for residents and non-residents, it’s estimated to raise roughly $13 million a year if it becomes law. Bishop says the funds are intended to be used for school maintenance and construction costs.

Alaska’s motor fuel tax,

, would be doubled from 0.08 cents a gallon to 0.16 cents a gallon. “It would hopefully go toward maintenance and operations and highway repairs,” Bishop said.

If it becomes law, the higher fuel tax would raise roughly $30 million a year.

The state faces a roughly $1.5 billion deficit and Bishop is aware of the scale of the fiscal challenge. “It’s small but it’s a start, we’ve got to do something,” he said of his tax plans.

According to Bishop, the Senate majority caucus is not debating other revenue options. “Not at this time, not today, no,” he said.

Sen. Bill Wielechowski, an Anchorage Democrat, prefiled a bill on Friday that mirrors a

to raise taxes on the oil and gas industry. “This is a critical issue, it’s an opportunity for us to gain a substantial revenue that I think we deserve,” he said.

The proposed tax rise would apply to the state’s three most productive legacy fields and advocates say it could net the state an additional $1.2 billion a year.

Critics of the initiative have said increasing taxes could stifle investment.

Sen. Cathy Giessel, an Anchorage Republican, told the Resource Development Council on Thursday that she supported the current tax structure and that higher taxes could threaten jobs on the North Slope.

“These are those good paying jobs we want in the state, and we want Alaskans to fill them,” she said.

But Giessel may not be opposed to all revenue increases, she has been touting Bishop’s education head tax and motor fuels tax as options for debate during the session.

Rumors also abound that a statewide sales tax could be proposed by the Legislature but currently, one hasn’t been prefiled. “I’ve heard that bandied about, some lawmakers have talked to me about that, I say to them, ''Go draft a bill,”" Bishop said.

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