Gambling will be among options to close future state budget gap, Alaska revenue commissioner says

People around a table at a conference room
Lucinda Mahoney, commissioner of the Alaska Department of Revenue, left, listens to Rep. Ben Carpenter, R-Nikiski, right, during the House Finance Committee meeting on on Tuesday in the Capitol. (Andrew Kitchenman/KTOO and Alaska Public Media)

Gov. Mike Dunleavy’s administration plans to present lawmakers with a few revenue options during the second special session later this summer. 

State Revenue Commissioner Lucinda Mahoney told the House Finance Committee on Tuesday that the options would include the governor’s proposal to expand gambling in the state. She said the administration is seeking more detailed analysis of how much money it would raise. 

“What is more important about that initiative is the economic impact of that industry on our economy,” she said. “And the potential to diversify the economy.”

Mahoney said there will be “a few more” revenue measures presented to legislators. But she only hinted at what they would be. 

“These new revenue measures are very different than any tax that we’ve seen in Alaska,” she said. “They’re more modern. But we are still fleshing them out.”

Mahoney said the administration is working on an update to how much money different revenue proposals would raise. 

The Department of Revenue presented estimates a year ago that ranged from $2.3 million from legalizing gambling on card games to $1.2 billion if the state were to adopt a sales and use tax similar to one in South Dakota. 

Nonpartisan experts estimate the gap between what the state would raise and what it would spend under Dunleavy’s Permanent Fund dividend proposal to be $1 billion per year over the next decade. The administration estimates it to be smaller, equalling $300 million by the end of the decade. The governor also has proposed taking $3 billion from the Permanent Fund’s earnings to cover budget gaps over the next five years. 

There are 10 days left in the first special session.

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