Dear Neighbors,

For those of you who missed watching Gavel to Gavel last evening, the Senate took action on three measures intended to address the state fiscal gap. I regret I have to give you some rather disappointing news. Despite my support, all three measures failed. I voted for all three to help continue the debate on our fiscal challenge and in the hopes that we would have the tools in place to meet our fiscal problems when our savings are exhausted.

HJR 9, “Constitutional Amendment: Appropriation Limit,” failed in the Senate by a vote of 12-8 under reconsideration. It takes 15 votes to put a question of amending the state constitution on the ballot for a vote of the people. Those who voted “yes” were myself, Senators Cowdery, Dyson, Green, Ogan, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, and Wilken. The Senate Minority, Senators Davis, Ellis, Elton, French, Guess, Hoffman, Lincoln, and Olson voted “no” because, I assume, that they want more spending rather than less.

HJR 26, “Constitutional Amendment: Permanent Fund/POMV” also failed last night by a vote of 5-15. Those who voted “yes” were myself and Senators Seekins, Stedman, Gary Stevens and Therriault. Those who voted “no” were Senators Cowdery, Davis, Dyson, Ellis, Elton, French, Green, Guess, Hoffman, Lincoln, Ogan, Olson, Stevens B, Wagoner, and Wilken.

HJR 26 failed, I think, because some senators did not want to use the Earnings of the Permanent Fund for state services in addition to PFD checks. Some others were afraid that the voters would reject it, closing off the Earnings from the possibility of use by the Legislature (as we are statutorily allowed to do now).

SB 366, “State Sales Tax” failed by a vote of 7-12. Those who voted “yes” were myself, and Senators Cowdery, Green, Seekins, Stevens B, Therriault, and Wilken. Those who voted “no” were Senators Davis, Dyson, Ellis, Elton, French, Guess, Hoffman, Lincoln, Olson, Stedman, Stevens G, Wagoner. Senator Ogan was absent.

SB 366 failed for a variety of reasons. Some opposed a sales tax. Others would not support it without a cap on state spending.

Senator Ben Stevens served notice of reconsideration, so the bill will come up for a vote again today. However, I do not anticipate much, if any, change in the result.

At this point, the only revenue measure that has passed the Senate and may still pass the House is SB 368, which would raise the tobacco tax by $1.00 per pack. That bill is estimated to raise approximately $38 million per year, less about $1 million per year in enforcement and administrative functions. SB 368 is currently in the House Finance Committee, where Representative Bill Williams, Co-Chair, has not yet scheduled it for a hearing.

I know many of you will ask me, “What about an income tax?” No income tax bill is has been introduced by any Senator, Republican or Democrat. I don't believe there is sufficient support for any income tax in either the House or the Senate. One reason, I think, is that an income tax would be levied against only 20% of Alaskans. 48% of Alaskans are non-working. 32% of Alaskans earn less than $30,000 per year, including the vast majority of non-resident workers. So those who make $30,000 per year or more would pay 100% of any state income tax. This data comes from the Alaska Department of Labor and Workforce Development.

# # #