Among the primary charges of the House Special Committee on Ways and Means is the responsibility to propose new measures to raise additional revenues. After careful consideration of current economic and political reality of the state of Alaska, this state sales and use tax is proposed.

It is with recognition of the complexity and potential effect of such a proposal that this basic framework of a sales tax system is submitted with full expectation that it will be molded to fit the need for additional revenue in Alaska; the unique nature of Alaska's communities; and the best interests of the people of the state.

HB 293 establishes an important component to a General Revenue System aimed at stabilizing a balance between revenues and appropriations in the State budget. This measure is intended to compliment other necessary components including, but not limited to, the constitutional amendment that limits spending and appropriations, a constitutional amendment that establishes a percent of market value methodology for the Permanent Fund and attendant statute that directs the distribution method for resulting proceeds.

HB 293 adds to the General Revenue System a measure designed to fairly collect revenue on sales and use of tangible personal property and services. It is estimated that HB 293 will generate approximately $300 million per year.

HB 293 will play an important role in closing the fiscal gap, and when combined with the other components, will provide for stability in the budget, thereby allowing the State to foster a healthy economic and quality of life environment for Alaskans.

Released: May 6, 2003

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