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House Ends Historic 5th Special Session Without a Comprehensive Fiscal Plan



July 16, 2016
Saturday PM

(SitNews) Juneau, Alaska - The Alaska House of Representatives on Friday adjourned the fifth special session of the 29th Alaska Legislature after the Governor failed to secure the needed votes for his new tax measures and Permanent Fund restructuring legislation. The special session convened Monday, July 11 in Juneau.

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The Governor’s proclamation included legislation to restructure the Permanent Fund; implement income, sales, motor fuel, mining, alcohol, tobacco, and fisheries taxes; and, revisit oil and gas tax credits.

Responding to the adjournment of the special session Governor Bill Walker said in a prepared statement, “Without a sustainable fiscal plan that includes restructuring of the permanent fund, the dividend program goes to $0 in less than four years. The Republican-led Senate passed the legislation that would have reduced the dividend to $1,000 this year. Senators agreed to this measure in an effort to protect future dividends for all Alaskans. By doing nothing this year, the House sets us on an even more challenging journey to a sustainable fiscal future. Without a plan, all Alaskans will lose not only their dividends but also critical services - from public safety to education and keeping roads and airports open and ready for business. I will do everything I can to keep Alaska on a path to prosperity.”

“While I share the Governor’s view that at some point in the near future we may have to talk about new revenues, it is apparent to me after many discussions with members of the majority caucus, the minority caucus and the minority leader, the support for any of the measures introduced by the administration is simply not there,” Speaker Mike Chenault (R-Nikiski) said. “A majority of our constituents have voiced their concerns with these proposals and the need for more information on the effects through public testimony, public opinion messages, emails and other personal communications.

“Staying here for another 30 days is not going to resolve the revenue issues before us,” Chenault said. “We have discussed all the different proposals and I don’t foresee any significant changes within the time allotted for this special session. Should the governor come up with 21 house votes and 11 votes from the other body, then our meeting in special session may be fruitful.”

Despite the setback, the members of the Alaska Independent Democratic Coalition (AIDC) said in a press release they remain committed to finding acceptable solutions to close the budget gap that can garner approval from the Governor, the Alaska Legislature, and the people of Alaska.

“Governor Walker put forward a plan for lawmakers to consider. Unfortunately, the plan was called regressive by the Rasmuson Foundation. That plan should have been used as a starting point for a balanced and comprehensive fiscal plan that is fair to all Alaskans,” said AIDC Leader Rep. Chris Tuck (D-Anchorage). “This fiscal crisis was years in the making so it’s not surprising that finding solutions will take some time. The members of the Coalition are not giving up and will continue working with the Governor and all lawmakers to create a bipartisan fiscal plan that is fair, protects our economy, and that all Alaskans can be proud of.”

The low price of oil and a flawed tax policy has resulted in a dramatic loss of revenue to the State of Alaska while spending is largely unchanged from a decade ago. The Alaska Independent Democratic Coalition gives the thanks to the forethought of many lawmakers, billions of dollars were put in savings when oil prices were high. That will allow the essential functions of state government to continue while lawmakers and the Governor work on fiscal solutions.

“Our Coalition wants a sustainable path to fiscal stability. Oil prices cannot be expected to rebound in the near future, which means all of the components of the Governor’s plan need to remain on the table,” said AIDC Whip Rep. Sam Kito (D-Juneau). “The seriousness of our fiscal challenges demands that all lawmakers work on ending the current stalemate and stop playing politics with Alaska’s future.”

Governor Walker’s agenda for the Fifth Special Session featured six pieces of legislation, including House Bill 5001 to cap the size of Permanent Fund Dividends and use billions of dollars every year from the earnings of the Alaska Permanent Fund to pay for a large portion of state government. Use of Permanent Fund earnings is a top priority for Governor Walker, which resulted in his decision to veto over $695 million from the money used to pay for this year’s dividends. The Governor’s actions will limit dividends to $1,000 this year.

“Using the earnings of the Permanent Fund to pay for state government should be the last component of a fiscal plan but it turned into the first, and to some degree, the only component of a fiscal plan seriously considered over the last six months,” said AIDC Floor Leader Rep. Geran Tarr (D-Anchorage). “A Permanent-Fund-only plan is not a comprehensive fiscal plan because it unfairly places all of the burden of responding to our fiscal challenges on the backs of full-time Alaskans while letting out-of-state workers and others who make money in Alaska off the hook completely.”

The low price of oil in conjunction with Alaska’s flawed oil tax structure has resulted in a dramatic drop in the revenue Alaska collects in the form of production taxes. Until recently, production taxes were Alaska’s number one source of yearly revenue. The members of the Alaska Independent Democratic Coalition have consistently called for systematic oil tax reform that ensures a fair return for our commonly held oil resource.

“With a $3.5 billion deficit, it's been disappointing to hear oil and mining executives say they don't want to help, and that they want to keep their unaffordable state subsidies. Selfishness by some of the most privileged corporate interests is part of the reason a needed, comprehensive plan failed," said House Finance Committee member Rep. Les Gara (D-Anchorage).

An attempt to override some or all of the Governor’s budget vetoes failed during the special session after the Alaska Senate wasn’t able to get support for a joint session. The fifth special session was scheduled to end August 9, 2016. If the votes are gathered for the legislation after adjournment, the Governor or Legislature may call a sixth special session.




Source of News:

Office of Gov. Bill Walker

Alaska House Majority

Alaska Independent Democratic Coalition


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