Governor Bill Walker’s budget plan, announced Wednesday, calls for introducing a state income tax and reducing the budget of several state agencies — most notably the departments of education and of health and social services.

It would also revamp the existing Permanent Fund Dividend system, resulting in a cap on individual PFD payouts.

Finally, a so-called sin tax would increase the price of a pack of cigarettes by $1 and the price of alcoholic drinks by $0.10 each.

After Walker’s budget plan was announced Wednesday, we asked Alaska residents their thoughts.

“It’s a smart move for the state. We can’t rely on oil, and until we have another resource that we can [rely on], we need to look at alternative measures,” said Dillingham resident Lynn Van Vactor.

With the state’s budget crisis nearing a breaking point, Van Vactor argued the proposal was unavoidable.

“Desperate times call for desperate measures,” she said. “We need to work together as a community to ensure that we have the resources to provide health and safety.”

We spoke to about a dozen people in downtown Anchorage Wednesday and about half thought Governor Walker was heading in the right direction.

“The state has to do something to raise revenue,” said Alaskan Charlie Bunch. “I’d hate to be in the governor’s shoes,” he added.

Still, there was plenty of resentment from other Alaska residents who believe certain fiscal perks come with living in the Last Frontier.

“It’s the people’s money and it should stay the people’s money. He should keep his fingers out of it,” said Anchorage resident John Mumey, referring to the Permanent Fund.

Also controversial was the potential implementation of a state income tax, which would be the first of its kind since 1980.

“I work hard for my money and I want to keep everything I can,” said Taylor Carr, who moved to Alaska this summer.

Some suspected the governor was deliberately harsh to accommodate negotiations with the legislature early next year.

“I suspect it is something used to shock people into coming up with more realistic compromises,” said Greg Henrikson.

There is a considerably long road ahead before anything is finalized. The state legislature will begin reviewing Walker’s budget proposal in January.

The governor said he welcomes input and the plan will likely change during the legislative session.

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