Gov. Mike Dunleavy has introduced a bill in the State Senate that aims to enact a statewide sales tax as part of a larger plan that seeks to curtail state spending and guarantee a 50/50 split between the Permanent Fund Dividend and funds for state government operations.
Dunleavy sent the legislation – SB 227 – to the legislature on Jan. 26, along with a transmittal letter that lays out his intentions.
GOV. DUNLEAVY’S TRANSMITTAL LETTER
Under the authority of Article III, Section 18 of the Alaska Constitution, I am transmitting a bill relating to a comprehensive fiscal plan.
For too long, Alaska’s economic growth has been stymied by uncertainty and volatility. We are one of the few states that depend so heavily on a single commodity, subject to daily price swings, to fund state government. This bill is one part of a comprehensive fiscal plan to stabilize state finances, limit spending growth, share responsibility among Alaskans, major industries, and nonresidents, attract investment, and restore rules-based payment of the annual Permanent Fund Dividend.
Alaska needs a better path than a simple “tax-and-spend” approach: raising taxes just to support government growth. Alongside this bill, I am proposing a one-percent spending cap to rein in growth and avoid unnecessary increases in the burden on Alaskans. The plan also includes a Government Sunset and Reauthorization process designed to review agencies on a consistent schedule to measure their performance and determine if they are meeting the needs of Alaskans.
Finally, one of the most important features of this plan is a proposed constitutional amendment to implement the 50/50 split between the Permanent Fund Dividend and funding state government operations, returning to a rules-based system for paying Alaskans’ annual dividend.
This bill contains a seasonal sales tax set at four percent from April 1 to September 30, and at two percent from October 1 through March. All who benefit from Alaska’s public services – residents, workers, and visitors – will share in supporting those services.
The sales tax sunsets in 2034, as Alaska’s fiscal position improves. The bill also temporarily raises the minimum tax floor for oil and gas production from four percent to six percent. It returns to four percent in 2032 or the calendar year following average daily throughput reaching 650,000 barrels per day. Additionally, this bill contains a $0.15 per barrel surcharge to fund operations and maintenance costs related to the Trans Alaska Pipeline Corridor. Finally, this bill implements a market-based sourcing rule for corporate income tax and the corporate income tax is eliminated in 2031. These changes are intended to encourage investment in Alaska.
Alaska has prosperous years ahead. Starting in Fiscal Year 2033, Alaska is projected to see higher revenue due to expected increases in pipeline throughput and the Alaska LNG Project. This comprehensive plan is designed to bridge the next seven years by stabilizing state finances, limiting spending growth, restoring a rules-based PFD, and sharing responsibility through targeted, time-limited revenue measures that support investment and predictability.
I urge your prompt and favorable action on this measure.
Sincerely,
Mike Dunleavy, Governor
18 Comments
The lazy jerk Dunleavy is at it again! More of his fraud, waste and abuse. He has done nothing but damage to this state and there is np damage control.
The lazy jerk Dunleavy is at it again! More of his fraud, waste and abuse. He has done nothing but damage to this state and there is no damage control.
oh watch the RINOs cave like the spineless twits they are!!
There is no such thing as a temporary tax and sure as hell no such thing as a sunset on a tax. Watch people flood out of here
Their goal is larger PFDs And new taxes to pay for it. Yes, the parasites will move in, the producers will move out, tourism will go to cheaper places, and the problem will grow.
We don’t need more taxes, just less wasteful government spending!
Sounds almost like bribery. I will give you more PFD. But only if you give me a new tax.
Alaska seriously needs an outside DOGE investigation. Perhaps we might steal the Fraud Trophy from Minnesota and California.
Respectfully call BS, Guv.
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Separation of powers is still a thing, even in Alaska.
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Taxation is the legislaure’s constitutional job, not yours, Guv.
The problem with Alaska is that it got screwed out of the money owed it from the feds when the feds did not give it the percentage of the income mandated by Congress when the statehood act was signed. So Alaska has been a beggar ever since the North Slope production started to go down. With the Democrats in control of the legislature, money is still being spent too fast instead of seeing cuts take place. That will continue to happen because urban living demands more services than those outside of cities. The problem is not going away. Cut spending? Remember that this almost got the guv recalled before he even started in 2019. More bang for the buck? The legislature didn’t want to cut spending and didn’t want to see results. The answer is to pay more attention to what your representatives and senators say about spending and then hold them to it.
Disgusting.
RINO NeoCon – in the dictionary Dunkleavys face is between Yundt’s and Lyndsey Graham.
Traitor of the highest order – pulling this crap on his way out.
CUT SPENDING!
Dunleavy is traitor trash! Smolden is his rear wiper!
After watching what’s happening in Minnesota, I’m wondering how much fraud is going on here and why did the state budget blow up last year? Before a sales tax, I think some sacred cows need to be trimmed first. This state did well in the past without all the social programs. Why am I paying for people in the bush to cut their own firewood to heat their homes..?
What a crock!!! I’ve attempted to inform my local and State “representatives” about waste and outright fraud within State agency budget processes. All to no avail. It’s almost as if Sarah Bsnce and others have no interest in knowing the facts much less doing anything to affect change in fiscal responsibility. Our agency heads told us to spend every single penny. Give nothing back. Find creative ways to ask for and spend more. Justify the extra spending. In writing. But no one cares.
How convenient, give the masses a sales tax, an increase gas tax and eliminate the Corporate Tax! This is just a distraction to give Billion Dollar Companies a huge tax break, throw the PFD in the masses faces and they’ll turn a blind eye!
The masses get a sales tax, pay more in gas tax and Billion dollar companies don’t have to pay Corporate taxes! The cost to get our PFD, which is owed to all Alaska residents. How about balancing the budget and do your jobs; instead of selling Alaskans out!
Billion dollar companies won’t have to pay corporate taxes; however, the masses pick up the tab by paying a sales tax and more in gas taxes. Again, dangling the PFD and not following our Alaska State laws by giving us our PFD. How about cut the waste and balance the budget! Billion dollar companies shouldn’t get a free ride!
Alaska with a population of about 750,000, lots of oil and other resources, tons of resources, TONS, and the state needs to add a sales tax? On top of property tax, gas tax, alcohol tax, marijuana tax, tobacco tax, industry tax, corporate tax, at this point I’m surprised we still have a PFD, I’d say its safe to assume the state has been spending like drunken pirates.
I’ve lived here so long, I remember when we had a sales tax and a school tax. All that went away when we received our first PFD which was $1000 dollars.