Alaska’s income tax proposal, the Senate, and 2018 – State of Reform

DJ Wilson | Feb 22, 2017

Sen. Pete Kelley, Senate President

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Alaskas fiscal house is not in order. Thats pretty common knowledge. On a budget of about $4.2 billion, Alaskas budget deficit is about $2.7 billion or about a 65% shortfall.

Coverage of the topic has been broad, including commentary we featured last week from Must Read Alaska.

The ADN, like other outlets, have been all over this as well. This piece from Dermot Cole lays out some of the concerns cogently.

However, all of these outlets miss what I think is a central dynamic in this discussion: how will this play in 2018?

Here is what I mean.

First, my recollection was that Gov. Walker has said he will only serve one term. With his recent announcement about prostate cancer, its reasonable to think this will be the case. Others see it differently, and even Gov. Walkers recent comments have him leaning towards running.

He said he ran to fix Alaska, a job he doesnt expect to finish by 2018, when he says hell probably seek re-election. Walker, described by his wife as someone who rarely takes a sick day, recently underwent what his office said was successful surgery for prostate cancer.

That said, its getting close to time when folks will begin to announce their intentions to run for Governor in 2018. Walker announced in late April, 2013, when he took on Gov. Parnell in the 2014 elections. In other words, thats about two months from now.

Thats about the time the legislature should be finishing up. However, given the length of last years legislative session (five special sessions plus a regular session), its very possible that well not have resolution on a fiscal plan until well after candidates start entering the gubernatorial race.

And that makes getting a fiscal package extraordinarily difficult.

Specifically, Governor Walker has the political freedom of being able to promote what he thinks is right without regard to a future election. The House majority can promote an income tax (or other tax) without being threatened in the next election as well as generating additional revenue is generally supported by Democratic voters (as well as some moderates).

However, the Senate majority is a different story. The Republicans in that body some of which are thinking about running for Governor will have a tough time getting behind an income tax. And, if they want to run for governor, that would likely be a disqualifying vote among a Republican electorate.

This means that if you happen to be thinking about running for the Republican nomination for Governor of the State of Alaska, then there is no way you can be seen as being supportive of raising taxes particularly an income tax and expect to make it through a Republican primary. Apparently there are 46 names of folks looking at the Republican nomination.

Immediately, therefore, the Senate majority leadership has to either 1) decide that each of the senators wont run for Governor and be willing to vote to raise taxes, or 2) decide they might want to run for governor and therefore cant vote to raise taxes due to political reasons.

Now, I also recognize that each of the senators will vote their conscience on matters like taxes. Im not making a comment about the policy or about any members own thinking about the merits of taxes to address Alaskas fiscal situation.

I am saying that the politics are sideways for any compromise on taxes given that we have an election about to begin and that makes things extraordinarily challenging for compromise in this legislative session.

Originally posted here:

Alaska's income tax proposal, the Senate, and 2018 - State of Reform