The House passed a bill Saturday that would bring a state income tax to Alaska for the first time in 37 years. The vote sends it to the Senate, where leaders oppose the tax.
Dillingham Democratic House Speaker Bryce Edgmon said the Education Funding Act, House Bill 115, is needed to prevent rural communities from suffering.
“The way I view it, if we do a partial plan this year, we’re going to cut the like amount next year and probably the year after,” Edgmon said. “We really are going to see a lot of schools shutting down. Where are those students going to go? That’ll be a question for tomorrow.”
A single person with no children earning $40,000 a year would pay $617 under the tax. A married couple with two children and $100,000 in income would pay $1,483.
Eagle River Republican Rep. Dan Saddler said the tax would harm the private sector.
“Let’s call this for what it is – it is income redistribution,” Saddler said. “It’s taking from the haves and giving to the have-nots.”
Gov. Bill Walker praised the House for passing the bill as part of a plan to balance the budget. The tax would close a quarter of the gap between what the state spends and what it raises.
But the bill faces a difficult path in the upper chamber. Senate President Pete Kelly said it will receive a fair hearing. But he also said the idea of taxing working Alaskans during a recession is “absurd on its face.”