Today's page may be all about budget…but the budget is all about oil tax policy! -dh
TONIGHT: ALASKA'S GOVERNOR WALKER RELEASES MORE BUDGET DETAIL!
FROM ALASKANOMICS: Governor Walker's Fiscal Year 2017 Budget Plan
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Last week, Department of Revenue Commissioner Randy Hoffbeck, and Tax Division Chief Economist, John Tichotsky, gave a presentation to the Energy Action Coalition about the State's 2015 Revenue Forecast. The Alaska Department of Revenue this week released the first 2 chapters of the Fall Revenue Sources Book for 2015. It contains the annual forecast data that provides basic information about state revenue, as well as a forecast of state revenue over the next 10 years. The full Revenue Sources Book will be available later this month. Click here to download their PowerPoint presentation and Fall Revenue Sources Book. |
Posted by Alaskanomics, 15 Dec 2015 04:52 PM PST
The Governor is required to present his budget to legislators by December 15 each year. This year had plenty of build-up to the release of the Governor’s plan. Groups of lawmakers, businessmen, and concerned citizens have been meeting for months in anticipation of how we will begin to solve the fiscal crisis occurring in Alaska. In a press release dated December 9, 2015, the Governor introduced “The New Sustainable Alaska Plan” as a way to power the state economy through a mix of spending cuts, wealth management, new revenue, and investments. The state is currently spending over $9 million a day in savings, or $4,900 per Alaskan this year. This is not a problem that will be solved with one measure.
From the Governor’s press release:
The New Sustainable Alaska Plan also calls for continued cuts and ongoing spending restraint. The Walker-Mallott administration worked with the Legislature to cut about $1 billion from state spending since taking office on Dec. 1, 2014, and eliminated 600 state jobs. Governor Walker’s fiscal year 2017 budget calls for $100 million in additional cuts from the operating budget and $425 million in cuts from oil exploration credits.
The plan will change the oil and gas tax credit system into a low-interest loan program, wherein the rates will be determined by the number of Alaskans the companies hire. To honor existing commitments for credits, the FY 17 budget allocates $1.2 billion for a transition fund and loan program. The minimum tax on the oil industry will increase by $100 million. The mining, fishing and tourism industries will also be taxed for projected revenue of about $47 million. The plan also calls for an income tax of 6 percent of federal tax liability, which is about 1.5 percent of income for the average Alaskan family, for projected revenue of about $200 million. Taxes will also be levied on alcohol, tobacco and motor fuel for projected revenue of $112 million.
The Governor’s plan is a multi-year approach that helps ease the sting of the cuts to state budget and introduction of new revenue. It is vital that we continue to move forward on this issue because Alaska cannot afford to wait any longer. Inaction will result in the depletion of the state’s savings by fiscal year 2018 if we continue to spend the way we are today. Once the savings is gone, the legislature will have to begin spending the earnings reserve of the Permanent Fund, which will be depleted in fiscal year 2022. A reduction in spending, broad based taxes and priority investments are the way that we will rise out of the ashes and return to a long term balanced and sustainable budget.
Alaskans must work with lawmakers so that the correct balance is found to have an Alaska that is spending within its means as well as serving the people.
For more information about the Governor’s plan, visit https://www.omb.alaska.gov/html/budget-report/fy2017-budget/proposed.html
Governor Walker Releases 2017 Budget Legislation
Reduces Overall State Spending By 21 Percent Since FY2015
December 15, 2015 ANCHORAGE – Governor Bill Walker released the FY2017 (July 1, 2016 – June 30, 2017) appropriation and revenue bills today as part of the Walker-Mallott Administration’s New Sustainable Alaska Plan. Rolled out last week in Anchorage, the plan addresses the state’s $3.5 billion budget deficit using a combination of spending cuts, new revenue, wealth management and investment.
Governor Walker also released the Alaska Permanent Fund Protection Act (APFPA) today, which re-plumbs funding for state services to stabilize the state’s budget. The Governor’s fiscal plan calls for continued cuts, implementing the APFPA, and adopting broad-based taxes and fees.
This year’s state operating budget is $4.8 billion, down from $6.1 billion when Governor Walker took office one year ago. Additionally, proposed FY2017 state funding for agencies is $140 million less than FY2016 and $544 million less than FY2015—a cut of 11 percent from state operating costs since FY2015. The budget also includes investments of $38.3 million for continued progress on the gasline project and $1.3 million for the Rural National Guard enhancement; leaving the administration with a net cut in agency operations of $100 million since last year and $500 million since FY2015.
· Between FY2016 and FY2017, the Walker-Mallott administration has cut 6.7 percent from overall spending in the state’s operating, capital and oil tax credit budgets.
· Since FY2015, the administration has cut 21 percent from the state’s operating and capital budgets—including an 11 percent cut in the operating budget between FY2015 and FY2017.
Governor Walker reiterated the importance of continued streamlining efforts, as well as program and service reductions.
“Tackling our state’s budget problems is going to require a combination of continued spending cuts and new revenue,” said Governor Walker. “With the help of the legislature, we reduced state spending by nearly $1 billion last year, and eliminated 600 state positions. While we cannot balance the budget with cuts alone, it’s important that we continue to look for budget efficiencies throughout our state system.”
The administration also released legislation today that would generate new revenue for the state. Outlined in seven separate revenue bills, the legislation would generate approximately $360 million a year in new funding, including broad-based taxes and fees.
Governor Walker stressed the importance of shared responsibility.
“As Alaskans, we are all in this together, and it is very important that this plan is fair,” said Governor Walker. “The legislation package that we released today is the result of input from many industries and individual Alaskans. I appreciate the contributions that lawmakers and other Alaskan leaders have made to this important conversation, and I look forward to working with the legislature in the months ahead to chart a sustainable fiscal future for our state.”
For more information on department cuts and information on the Governor’s budget and revenue bills, please visit the OMB website at https://www.omb.alaska.gov/
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