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Wednesday Public Testimony:
Income Tax and an Increased PFD
It’s that time again. We are taking a second round of public testimony on a bill aimed at solving much our $2.8 billion deficit. Unlike other plans proposed by some legislators, which require major cuts to schools, the university, help for abused and neglected children and those with disabilities, House Bill 115 recognizes reality.
After $3.4 billion in budget cuts that started in 2013, continued budget cuts--in addition to harming public education and our ability to provide for public safety—cost jobs. Every additional $100 million in cuts, by taking money out of the economy, eliminates between 1,000 and 1,500 private and public sector jobs. That’s according to a recent University of Alaska study. Those who propose $750 million more in cuts would eliminate 10,000 more jobs from an economy already in recession, and extend the recession for many more years. I’d like to fix our budget, and work to end this recession.
While the Senate has proposed a partial plan that relies on a PFD cut to $1000, HB 115 proposes a larger, $1,250 PFD to reflect the needs of the many today, who struggle to make ends meet. It would generate roughly $1.7 billion in revenue from excess Permanent Fund earnings, without touching the Permanent Fund’s principal. It would allow the Permanent Fund and its dividends to grow.
HB 115 would also ask for a contribution from wealthier Alaskans, through an income tax where people with higher incomes would pay a higher tax. The income tax would raise roughly $700 million, and remain the 4th lowest income tax in the country.
A couple with no children would have the first $28,600 of their income, plus allPermanent Fund Dividends, exempted from taxation. A couple’s Income above $28,600 and up to $100,000 would be taxed at 2.5%. Slightly higher rates would apply for higher incomes, and the top rate would be capped at 7% for that part of their income above $500,000.
A single wage earner with no dependents would pay the 7% rate for that portion of their annual income above $250,000. Taxes would be reduced slightly through deductions for each dependent a person has living with them.
With the reform of our unaffordable oil company subsidies, we’d be on stable footing to move Alaska forward, and build an economy and state where children and adults can prosper again.
That’s my view anyway. The popular thing would be for me to pretend we can just keep cutting the budget. While cutting waste does make sense, Alaska is at the point where significant additional cuts cost children a fair education, cost seniors the services and dignity they deserve, and cost thousands more lost jobs.
Public testimony for HB 115 will be heard this Wednesday, March 29th, at two different times. I have included the schedule below, as well as some suggestions/tips for navigating the telephonic testimony process:
Wednesday, March 29, 2017
1:00 - 4:30 p.m. Anchorage, Fairbanks, Juneau, Off Nets
-Public testimony limited to 2 minutes each.
The teleconferencing system for committee meetings has a limited number of phone lines, and because of this, you are strongly encouraged to testify from your local Legislative Information Office (LIO). If it is not possible for you to testify at an LIO office, please call the Juneau LIO at (907)-465-4648. They can assist you in connecting to a meeting and answer any other questions you may have about the process before, during, and after the day of a meeting.
The above schedule shows testimony times grouped by towns and “Off nets”. The towns are actually LIO’s, meaning that everyone present at their LIO will get a chance to speak during their town’s time period. “Off net” refers to someone who could not be present at their LIO and has called in from a private phone line. A private caller, regardless of where they have called from or live, is considered an Off net, and their testimony will be taken at the scheduled Off net time. Off net testimony is usually heard after all those present at the LIO’s have spoken.
As always, call if you have any questions, or if we can help.