Walker Proposes 1.5% Payroll Tax To Cover State’s Deferred Maintenance

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.

Story as aired:

Round One Education Budget Win, Round Two Presumed To Be Tough

Courtesy of Ron Niebrugge

They took a long time in getting to Governor Bill Walker’s desk, but both the Alaska State Capital and Operating Budgets got passing grades for education funding.

Senator Tom Begich (D-DJ): “The Capital Budget continues to support deferred maintenance of schools, which has been neglected for years. That is a superb outcome.  In terms of the Operating Budget, it ensures that there is full funding for education, at least at the prior year levels, and increases the opportunity for Pre-K in rural areas. Both of these are tremendously positive impacts for rural schools.” 

For schools that had braced for deep cuts – the flat funding was a win.  Fears were that education cuts would be significant, the Senate originally proposed a near 6% decrease in funding. The Final Compromise was by no means unanimous.

The Alaska State House Republicans from the area between Eagle River and North Pole voted against the final budget.  The sole State Senator who voted against the proposition represents the same area.

Senator Tom Begich

Although funding for education is one of the few things that are mandated by the Alaska State constitution, the clause simply states that, “The legislature shall by general law establish and maintain a system of public schools open to all children of the State, and may provide for other public educational institutions.”

Unlike the Capital Budget, there is no formula that demands what percentage of State funds must be expended to that end. Lawmakers are suggesting that the fight for keeping even flat funding for schools is going to be a scuffle next session.

Senator Tom Begich (D-DJ): “That’s likely the primary point of pressure will be on education funding, ..particularly the Senate will focus on cutting education funding.  If parents care they should become engaged and telling their Senators to support full funding of education.”

As aired on KSRM News:

http://www.radiokenai.us/wp-content/uploads/2017/08/Dorene-on-Round-One-Education.mp3