Survey: Rural Alaskans prefer income tax for budget fix
In a packed room at the Kuskokwim Campus of the University of Alaska Fairbanks, Lt. Gov. Byron Mallott made a promise.
“Governor [Bill] Walker will not let them do nothing,” he said, referring to lawmakers who have not yet passed legislation regarding the budget shortfall.
Mallott joined Rasmuson Foundation CEO Diane Kaplan in Bethel to discuss solutions to the crisis. His message that legislators could not leave Juneau before handling the issue resonated with people there.
“I think [we’re] most concerned of the effects of not doing anything,” said Kathy Hanson, who has lived in Bethel for 38 years.
In addition to budget cuts, there are three main options being discussed by the Rasmuson foundation. The first is using Permanent Fund earning to bridge the shortfall. This could cut each Alaskan’s dividend by about half. There are also two tax options: a sales tax and a state income tax. A sales tax could be painful in Bethel, where there is already a six percent tax on goods. But Hanson said it would be more impactful to villages in the region.
“The villages are going to be devastated,” she said.
Turnout at the meeting with Mallott and Kaplan was high; there were no empty seats the room, which was filled with about 50 people. But according to the survey, rural Alaskans and Alaska Natives were not as concerned about the budget as other Alaskans.
Of the roughly 800 people surveyed, about half were “extremely concerned” about the economy. Thirty-eight percent of Alaska Natives said they were equally worried.
David Whitley, who was in Bethel for the Tribal Unity Gathering, said plenty of people in his village of Holy Cross are concerned.
“It affects everybody in Holy Cross, from the school all the way to the government,” Whitley said. “Nobody likes it, but it’s a fact of life.”
Whitley’s favorite solution is aligned with many rural Alaskans: a statewide income tax. It’s 10 percent more favorable in the Bush than the cities, according to the survey.
“That would help the budget very much. That’s what we need,” Whitley said.
The proposed income tax cited by the Rasmuson Foundation would cost a family that makes $60,000 a year $204 annually. People making less than $25,000 a year would not be taxed.
Note: KTVA joined the Rasmuson Foundation on a sponsored trip.
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