KMXT 100.1 FM Public Radio in Kodiak, Alaska
Governor Bill Walker sits at the end of the table with members of the Kodiak Island Borough Assembly and Kodiak City Council. Kayla Desroches/KMXT
Kayla Desroches/KMXT
Governor Bill Walker presented his budget plan before the Kodiak Island Borough Assembly and Kodiak City Council Monday. He elaborated on some of his proposed methods of bridging what he called a $3.4 billion budget gap. One of those ideas is to change the oil and gas tax credit system. Walker said when he came into office, there was $700 million budgeted for tax credits.
“Which is great if they find something, but if they don’t, we’ve paid 65 percent of their costs and so, we are looking at looking at changing that into a low-interest loan program, and the interest rate would float based upon the percentage of local hire. If unchecked, the tax credit program would have been 1.2 billion dollars this year and 1.78 billion dollars next year.”
Which he said is higher than the budget for education. Walker also spoke about implementing a personal income tax to build revenue.
“It was a toss-up for us, it was a close call, between a property tax and income tax. One of the reasons we went on income tax rather than sales tax was because a lot of local governments use sales tax as their source. We want to make sure out-of-state workers, that they come to Alaska, earn their living of our resource development and then live somewhere else, that they’re part of the solution as well.”
One of the benefits of living in Alaska is receiving a Permanent Fund dividend, which Walker suggests cutting to $1000 dollars, almost half as much as 2015’s PFD amount of $2,072. During the question and answer portion of the meeting, Kodiak Island Borough Assemblyman Mel Stephens asked why the budget plan proposes an income tax while leaving the PFD as high as it is.
“It strikes me that what you’re doing is giving me a $1000 PFD, which Uncle Sam says thanks very much, hey pass some of that over to me. Whereas if you, I mean if we, cut the Permanent Fund dividend to say $600, looks to me like that would probably give as much money as all of your new source income.”
Walker agreed that if the PFD went away, a lot of the other budget issues wouldn’t exist.
“But there has to be this balance and the Permanent Fund impacts rural Alaska disproportionally than not-so-rural Alaska. It has become part the … because of cost of energy, cost of living, those kinds of things. So it was treating every Alaskan equally, but not every Alaskan is in an equal situation.”
Kodiak Island Borough Mayor Jerrol friend asked what communities like Kodiak can do to help, and Walker cautioned against fearing a negative reaction.
“I think the message we’re giving, it doesn’t work here, because of who you have. You have such great representation, but other places we say let your elected officials know that it’s okay to make tough decisions. It’s okay to do something that’s going to impact in a negative way someone’s pocketbook. Because there’s groups out there that are putting together some media that say it’s okay to make these tough decisions. And it’s gonna be tough.”
In the end, it will come down to the legislature which tough decisions make it into the Fiscal Year 2017 budget and which do not.
