Alaska governor calls for first income tax in decades

As oil prices remain low, Alaska Gov. Bill Walker called Wednesday for the state’s first income tax in 35 years.

In a speech and in a series of tweets, Walker announced the proposal that is part of what is called the New Sustainable Alaska Plan. The plan, paired with a budget proposal, is geared toward closing a $ 3.5 billion deficit the state is carrying. Alaska is the only state that does not have a state sales tax or personal income tax. For decades, it has been dependent on income from oil. Crude oil prices have hovered at seven- year lows, and this week, they dipped to $ 37 a barrel.

“This is the time when Alaskans need to pull together,” Walker said via Twitter. “There is no perfect budget plan other than the plan that gets done.”

A small income tax and a reduction in the state’s Permanent Fund dividends that benefit residents were part of Wednesday’s rollout.

The governor touted Alaska’s strengths and said the moves need to happen. The state’s tax burden is the lowest in the nation and the U. S. Chamber of Commerce ranked the state second in terms of positive business climate, the governor said.

“We have the tools to solve our budget challenge and create a bright future for Alaska,” Walker said via his Facebook page. “We just need the wisdom and the will to act.”

In an opinion piece published Monday in the Alaska Dispatch News, Walker defended the proposals.

This year, he wrote, the sharp drop in the price of oil blew a “gaping hole” in the state’s budget. Revenue will cover only 40% of the state’s costs, he wrote.