In the main meeting room of the Mendenhall Valley Public Library, the ideas being shared sounded like a page from an Alaska history book: school taxes, income taxes, the birth of the Permanent Fund, the founding of the Alaska Marine Highway.
On Sunday, about 80 Juneau residents gathered to hear from the borough’s delegation to the Alaska Legislature and offer their own comments on how to solve a state deficit that moves closer to $4 billion per year with every day that oil prices stay below $30 per barrel.
“There are a lot of pieces to the puzzle, and I think this is a really critical year,” Rep. Sam Kito III, D-Juneau, told the assembled crowd.
Rep. Cathy Muñoz, R-Juneau, and Sen. Dennis Egan, D-Juneau, each shared the floor with Kito as the trio solicited comments from the audience and told Juneauites how they see the state’s budget picture.
Many in the audience wore gray hair and remembered the years before 1980, when the state levied an income tax.
“I paid income taxes before,” said one woman in a purple vest. “I’d be happy to pay them again.”
Others echoed that sentiment. “We need an income tax,” said a woman wearing a long-sleeved blue blouse. “There are thousands of people who work in this state and live somewhere else.”
She described meeting Alaska workers living in Maui and Washington state. On her last trip from Juneau to Seattle, she sat next to a man going home. “He said, ‘Well, hardly anybody in our company lives in Alaska,’” she told the crowd.
“I’m willing to pay income tax,” added one man wearing a NASCAR baseball cap, “but people who don’t live here, I want them to pay more.”
Mary Graham, wearing a Green Bay Packers jacket, said she worked for 18 years in the Permanent Fund Dividend division office and she knows all about the nonresident worker issue. “I too believe that the income tax is the way to go,” she said.
Support for an income tax was widespread but not universal. Two members of the audience, Heather Bennett and Don Brand, said they support sales taxes and consumption taxes as alternatives to an income tax.
“There are other options for taxing,” Bennett explained, saying that consumption taxes are “a little bit of a moral way to do it. … They can choose not to buy something that has a higher tax.”
Another topic of discussion was the idea of a school tax, a flat fee levied by the state to benefit education. From 1949 to 1980, the state collected $10 from every Alaskan’s first paycheck of the year under the tax.
Amy Jo Meiners, wearing a flowered kuspuk, said she remembers her parents talking about the school tax. Will it come back?
Not likely, said Sen. Click Bishop, R-Fairbanks. He proposed a school tax bill last year, but on Monday said, “I don’t think it’ll get much of a hearing this session with all of the menus of revenue the governor has put forth.”
One member of Sunday’s audience asked if the Legislature is willing to consider cutting education and social services spending. “Why are they hands-off?” she asked from the front row. “They’re the ones that consume by far the most. … It shouldn’t be hands off everything.”
Kito responded that he views education as “our mortgage.” Spending on kids today ensures a workforce capable of paying the state’s bills in the future.
Egan said he doesn’t support the governor’s budget, because it includes cuts to preschool funding.
Muñoz was more equivocal, saying both that “it’s very difficult to cut education” and “this is going to be a very difficult year, though.”
Regardless of what choices the Legislature makes, some in the audience said they fear it will be too little, too late. The state may already be bound for an economic recession or depression, they believe.
Graham is among those. “Unfortunately, I’m taking my retirement money to Oregon at the end of this year,” she said. “I was a stalwart, but I’m worried about the economy tanking, and I’m bailing before it tanks.”
