Tax Law

State Net Capitol Journal – December 14, 2015; Alaska Governor Proposes Challenging Deficit Reduction Plan

Budget & Taxes

AK Gov Proposes Challenging Deficit Reduction Plan

Last week Alaska Gov. Bill Walker (I) unveiled his long-awaited plan to address the state’s multi-billion budget deficit, resulting from plunging oil prices and reduced oil production in the state. The proposal includes several measures that are bound to be widely unpopular, such as a restructuring of the Alaska Permanent Fund that will slash dividend checks for state residents by more than half ($2,072 to $1,000) and a personal income tax, which hasn’t been levied in the state in three-and-a-half decades.

Walker acknowledged that fact himself, saying: “I guarantee you, everybody in Alaska will find something about this plan they don’t particularly care for.”

But the governor also said his plan beat the alternative of cutting too much from the budget and possibly triggering a recession.

“Each successive year of cuts becomes more challenging,” he said. “I think we have to decide what kind of state we want to have.”

Given that various components of his plan have previously been rejected by the public and the Legislature over the last couple of decades, some lawmakers were quick to condemn it.

“I’ll certainly give credit for trying,” said Sen. Bill Wielechowski (D). “But, I mean, does he really think he’s going to get this past the Legislature?”

Walker, however, stressed that his plan was far from final.

“This is a work in progress,” he said. “This isn’t an edict, this isn’t a mandate. The main message is, we have to fix the problem. We can’t continue to survive with a $3 1/2 billion deficit.” (ALASKA DISPATCH NEWS)

Early Holiday Budget Gift in IL

As Illinois entered its sixth month without a state budget last week, Gov. Bruce Rauner (R) and Democrats who control the state’s General Assembly reached a rare agreement to free up $3.1 billion in state funds. The money will go to a host of needy recipients and causes, including cities and towns, so they can operate 911 centers and plow roads, among other things; the state Lottery, which had stopped paying out prizes greater than $600 because of the budget stalemate; tourism; community college technical education and adult literacy programs; domestic violence shelters; the secretary of state's office, to resume mailing annual vehicle-registration reminders to residents; and home heating bill assistance for low-income families.

Sen. Matt Murphy (R), noting the agreement came during the holiday season, said he hoped it was the start of “a more productive 2016.”

“What you see with this bill is, frankly evidence that the governor can reach across the aisle and that you can reach back and we can all get on the same page and do things together for the general good of the people we all represent,” he said. “Merry Christmas, Happy Hanukkah and to our mayors, good spending.”

It’s unlikely any more action will come on the budget before next year, with neither the House nor Senate scheduled to return to Springfield until January. (CHICAGO TRIBUNE)

Budgets In Brief - December 14 2015

Big Budget Surplus Sets Up Political Battle in MN: MINNESOTA’s projected budget surplus for next year has doubled on strong economic growth to $1.9 billion. But that windfall sets up an election-year battle over how to spend the money, with Gov. Mark Dayton (DFL) saying, “Now it’s our responsibility to use that money in ways that are going to better the future of our state,” and House Majority Leader Joyce Peppin (R) saying, “We have over-collected taxes” (STAR TRIBUNE [MINNEAPOLIS]). * UT Gov Proposes Education-Friendly Budget: UTAH Gov. Gary Herbert (R) has proposed a $14.8 billion budget that includes $422 million more money for public and higher education next year (SALT LAKE TRIBUNE). * VA Gov to Propose $2B In Borrowing: VIRGINIA Gov. Terry McAuliffe’s (D) two-year budget proposal will include a $2 billion bond package mainly to fund research and infrastructure and other projects at the state’s four-year higher-education institutions and community colleges (ASSOCIATED PRESS).

- Compiled by KOREY CLARK

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