New House plan aims to force Senate support on broad-based tax, oil tax changes
Leadership in the Alaska House is taking a new approach on a fiscal plan, one that is designed to force the Senate to approve a broad-based tax and oil tax changes.
The Democrat-led majority has been calling for a comprehensive proposal that includes use of permanent fund earnings, a broad-based tax and an overhaul of the state’s oil tax system. While the House struggles to get the votes needed to pass an income tax, the Senate majority has clearly stated its opposition to one.
Last month, the Senate passed Senate Bill 26 that calls for a spending limit and using permanent fund earnings to pay for state services. Until recently, the measure sat idly in the House Finance Committee, as the House pushed its own legislation, House Bill 115, that coupled a draw from permanent fund earnings with an income tax.
On Monday, the committee abandoned that approach and focused instead on SB 26, adding language to it that makes its implementation dependent upon passage of a broad-based tax and the House’s oil tax bill, House Bill 111.
The new version of SB 26 specifies that a broad-based tax must generate at least $650 million annually for education and that the Senate must approve the same version of HB 111 that passes out of the House.
“This is our way of bringing them [the Senate] to the table because they’re refusing to come to the table. The governor invited us all over to the mansion the other day, and we were the only ones that showed up,” said House Majority Leader Chris Tuck, D-Anchorage. “The Senate has said they don’t like the income tax, so if they don’t like income taxes, what other broad-based taxes would you like to look at?”
The move prompted strong opposition from the House Republican minority. Rep. Lance Pruitt, R-Anchorage, said the new measure holds the Senate “hostage.”
“If that doesn’t sound illegal or quid pro quo, I don’t know what does. That right there scares the living daylights out of me,” Pruitt said. “I would think twice about trying to sit here and hold the other body hostage, and it’s not like you did it behind the scenes, you put it right there out in the bill. Dangerous, dangerous.”
Rep. Tammie Wilson, R-North Pole, agreed.
“It takes away the other body’s mandate to represent their constituents and vet a bill,” Wilson said. “Because basically, if they vet the bill and they find any differences to it, by passing this bill we’re going to say it doesn’t matter what they found, even if it’s something better.”
Tuck noted the Legislature often ties specific bills to budget legislation, making payouts for programs contingent upon passage of particular measures. The Senate did that recently in its version of the operating budget.
“So that’s nothing new, we do that all the time. We’ve done it traditionally,” Tuck said, adding that the Legislature’s lawyers helped draft the new version of SB 26.
The House Finance Committee will take public testimony on the measure Monday at 4 p.m.
House Leadership plans to send major revenue bills to the Senate by April 16, the 90-day session deadline, but lawmakers will continue working in Juneau after that.
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