REPRESENTATIVE PAUL SEATON

(907) 465-2689 | State Capitol Building, Room 102 | WEBSITE
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Sponsor    Statement

House Bill 115: State Revenue Restructure Act

Alaska has a $2.7 billion budget deficit. This deficit is caused by the precipitous drop in the price of oil and requires consideration by both state budget reductions and additional revenues. The price per barrel breakeven point for a balanced budget is still over $103 per barrel, despite nearly $3 billion in cuts over the last several years. Before we continue to cut the budget and reduce state services we must ask ourselves, what kind of Alaska do we want to live in? The State Revenue Restructuring Act addresses three pillars of a larger plan to solve the broken structure of Alaska’s current reliance on only one source of revenue by diversifying revenue and sustaining our quality of life.

The State Revenue Restructuring Act combines revenues from the earnings of the Permanent Fund and a progressive income tax and creates a fair balance for all Alaskan families. This legislation will create a draw for FY18 and FY19 from the Permanent Fund Earnings Reserve (ERA) of 5.25% of the market value of the entire fund, known as a POMV draw. The draw will drop to 5% for FY20 and onward. One third of this draw will go directly to the dividend fund to pay our PFDs, equal to $860 million. The remaining two thirds or $1.7 billion will go to the state’s general fund to support state operations. The 2018 and 2019 dividends will be no less than $1250 and are expected to rise steadily thereafter. Dividends will still be paid from the earnings of the Permanent Fund, but using a POMV calculation in place of the current method means a more stable dividend amount over time. This POMV draw will also mean a more stable revenue source for the state budget so that it is no longer susceptible to the wild fluctuations of oil prices. This POMV draw will generate approximately $1.7 to $2 billion annually for our general fund and state services over the next decade.

The earnings of the Permanent Fund are now the single biggest income for the state. Their use is a necessary part of any complete fiscal plan. However the earnings alone cannot support the entire state if we want to maintain the value of this asset for future Alaskans; a sustainable budget requires new revenue. Alaskans have the lowest tax burden in the country and the state lacks a sales, income, or property tax. A progressive income tax is a fair and balanced way for all working Alaskans and nonresidents working in our state to contribute to the state services we benefit from every day. Through a broad-based tax, Alaskans will now have a direct stake in the state government spending responsibly.

Through this legislation, a resident and nonresident individual income tax based on adjusted gross income is created. Exemptions include the PFD and a $4000 personal deduction. Residents can choose to apply some or all of their PFD to taxes due, receiving any overpayment as a refund. The income tax would raise an estimated $663 million annually once fully implemented. HB 115 provides a fiscal solution that diversifies revenue sources to maintain the constitutionally required health, public safety, and educational core services that preserve our quality of life.


 
[signed]
REPRESENTATIVE PAUL SEATON

SPONSOR STATEMENTS from Alaska House Majority Coalition

House Bill 1: Election Registration and Voting

From the office of Representative Tuck


House Bill 2: Employment Preference for Veterans

From the office of Representative Tuck


House Bill 3: National Guard Leave/Reemployment Rights

From the office of Representative Tuck


House Bill 7: Ballot Selfies

From the office of Representative Kreiss-Tomkins


House Bill 8: Protection Orders from Other Jurisdictions

From the office of Representative Edgmon


House Bill 11: RIP for Public Employees/Teachers

From the office of Representative Kawasaki


House Bill 13: No State/Municipal Funds: Federal Immigration Registry

From the office of Representative Josephson


House Bill 14: Legislative Approval for Bristol Bay Sulfide Mine

From the office of Representative Josephson


House Bill 20: Solemnize Marriage: Elected Officials

From the office of Representative Claman


House Bill 23: Survivors’ Medical Benefits – Background

From the office of Representative Josephson


House Bill 26: Nursing Mothers in Workplace

From the office of Representative Tarr


House Bill 29: Ban Sale of Genetically Modified Fish

From the office of Representative Tarr


House Bill 30: Paid Sick Leave

From the office of Representative Tarr


House Bill 31: Sexual Assault Examination Kits

From the office of Representative Tarr


House Bill 32: GMO Labeling

From the office of Representative Tarr


House Bill 37: PERS Credit for Injured Peace Officers and Firefighters

From the office of Representative Josephson


House Bill 38: Benefits for Workplace Death and Permanent Impairment

From the office of Representative Josephson


House Bill 40: Trapping Near Public Trails

From the office of Representative Josephson


House Bill 43: The Right to Try: New Drugs for the Terminally Ill

From the office of Representative Grenn


House Bill 44: Legislative Ethics: Voting & Conflicts

From the office of Representative Grenn


House Bill 47: PERS Contributions By Municipalities

From the office of Representative Foster


House Bill 49: Extend Board of Direct-Entry Midwives

From the office of Representative Kito III


House Bill 52: Alaska Voluntary Pre-Elementary Education Act

From the office of Representative Kawasaki


House Bill 54: Voluntary Termination of Life

From the office of Representative Drummond


House Bill 78: Indigenous Peoples Day

From the office of Representative Westlake


House Bill 80: Property Assessed Clean Energy (PACE) Financing

From the office of Representative Wool


House Bill 81: More Energy Efficient Buildings Act

From the office of Representative Kreiss-Tomkins


House Bill 82: Off-Highway Driver's Licenses

From the office of Representative Kreiss-Tomkins


House Bill 84: Municipal Property Tax Exemption

From the office of Representative Kreiss-Tomkins


House Bill 85: Petersburg Lands Bill

From the office of Representative Kreiss-Tomkins


House Bill 87: Conflict of Interest: Board of Fisheries/Game

From the office of Representative Stutes


House Bill 88: Board of Fisheries Membership

From the office of Representative Stutes


House Bill 89: Licensing Radiologic Technicians

From the office of Representative Tuck


House Bill 99: Oil & Gas Tax Credit Disclosures

From the office of Representative Josephson


House Bill 102: Limited Teacher Certificates

From the office of Representative Kreiss-Tomkins


House Bill 103: Optometry & Optometrists

From the office of Representative Spohnholz


House Bill 105: Gordon Haber Denali Wolf Special Management Area

From the office of Representative Josephson


House Bill 108: Fiduciary Access to Digital Assets

From the office of Representative Claman


House Bill 111: Oil and Gas Production Tax; Payments; Credits

From the office of Representative Tarr


House Bill 115: State Revenue Restructure Act

From the office of Representative Seaton


House Bill 123: Disclosure of Health Care Costs

From the office of Representative Spohnholz


House Bill 126: Organized Militia: Workers Compensation

From the office of Representative Tuck


House Bill 127: Criminal Conviction Overturned: Receive Past PFD

From the office of Representative Kawasaki


House Bill 128: Shellfish Enhancement Projects; Hatcheries

From the office of Representative Ortiz


House Bill 131: Relocation Assistance for Federal Projects/Programs

From the office of Representative Wool


House Bill 132: Transportation Network Companies

From the office of Representative Wool


House Bill 133: Fair Share for Alaska Oil Act

From the office of Representative Gara


House Bill 134: Board of Game Composition

From the office of Representative Josephson


House Bill 141: AK Workforce Investment Board; Funds

From the office of Representative Fansler


House Bill 151: Children Deserve a Loving Home Act

From the office of Representative Gara


House Bill 166: Museum Construction Grant Program

From the office of Representative Parish


House Bill 167: Repeal of Performance Reviews

From the office of Representative LeDoux


House Bill 172: Cultivation of Industrial Hemp

From the office of Representative Drummond


House Bill 173: Climate Change Response Commission

From the office of Representative Josephson


House Bill 177: Aquatic Invasive Species

From the office of Representative Tarr


House Bill 181: Legislature Per Diem and Travel Allowance

From the office of Representative Kreiss-Tomkins


House Bill 184: Prohibiting discrimination based on sexual orientation

From the office of Representative Josephson


House Bill 188: Regional Fisheries Trusts

From the office of Representative Kreiss-Tomkins


House Bill 199: Fish / Wildife Habitat Protection; Permits

From the office of Representative Stutes


House Bill 200: Top Two Non-Partisan Primary Election

From the office of Representative LeDoux


House Bill 201: Municipal Regulation of Trapping

From the office of Representative Josephson


House Bill 203: Remote Recreational Cabin Site Staking Sales

From the office of Representative Kawasaki


House Bill 204: Overtaking / Passing DOT Vehicles

From the office of Representative Kawasaki


House Bill 213: Public School Trust Fund

From the office of Representative Parish


House Bill 217: Raw Milk Sales; Food Exempt From Regulations

From the office of Representative Tarr


House Bill 218: State Veterinarian; Animals; Products

From the office of Representative Tarr


House Bill 234: Extend Alaska Health Care Commission

From the office of Representative Guttenberg


House Bill 236: Extend Senior Benefits Payment Program

From the office of Representative Kawasaki


House Concurrent Resolution 1: Legislative Ethics: Voting & Conflicts

From the office of Representative Grenn


House Concurrent Resolution 2: Respond to Adverse Childhood Experiences

From the office of Representative Tarr


House Concurrent Resolution 3: APRIL 2017: Child Abuse Prevention Month

From the office of Representative Tarr


House Joint Resolution 5: Endorsing ANWR Leasing; Related Issues

From the office of Representative Westlake


House Joint Resolution 12: Opposing Genetically Engineered Salmon

From the office of Representative Tarr


House Joint Resolution 21: Feds Respect State Reg of Marijuana

From the office of Representative Guttenberg