As goals shift from filing the gap to fueling the economy, local contractors in 60 Alaskan communities will be put to work on deferred maintenance projects. Governor Bill Walker is hoping this statewide sweetener will make his failed payroll tax more palatable to Legislators.
Governor Bill Walker I-AK: “To stand by and watch our economy spiral downward, to watch our unemployment continue to rise, is unacceptable.”
In its new rendition, Walker’s payroll deduction will only be collected over three years—and is expected to generate $800 million. The Administration projects this initiative will create well over 1,000 jobs while removing debt from the budget.
Walker asked the Legislature to consider the tax in the fourth special legislative session but found no will enforce an income tax when the State was in a recession.
Former Speaker of the House, Representative Mike Chenault R: “Last session there was not enough support to do that, so he is going to have to get out and work with the Legislature in enacting that, and see if he can find the votes to pass it.”
But the Senate Finance co-chairs have been struggling to resolve growing deferred maintenance issues with the State’s infrastructure. Senator Bishop proposed a modified school payroll tax last year intended to cover the leaky roofs on schools around Alaska.
Senator Tom Begich: “There was a lot of traction that that was getting within the Majority, so I think the Majority might be interested- I mean that is the sell.”
On the deferred maintenance list are repair projects for schools, the Pioneer Home, courts, highways, and harbors. It also includes popular community needs and housing investment programs like the Weatherization Program and AHFC’s Housing Facility Maintenance Program.
The proposal taxes 1.5 percent of wages earned by Alaskans and non-resident workers, capped at $2,200 or twice the previous year’s permanent fund dividend amount—whichever is higher.
About fifteen percent of the revenue collected from the tax is projected to come from non-resident
workers, who in 2015 earned more than $2.7 billion.
workers, who in 2015 earned more than $2.7 billion.
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