Special Session Update: Payroll tax would raise $300-$325 M

A sustainable fiscal plan and strong public safety are inexorably linked

Rep. Louise Stutes. R-Kodiak

With the first week of the fourth special session in the books, the Legislature is hard at work on SB 54, the revision to the crime bill. The House Judiciary Committee heard public testimony and amended the bill before passing it out of committee. The legislation is currently being heard in the House Finance Committee.

Understandably, the increase in crime across the state has made public safety a growing concern of many. While I agree that SB 91, which was passed in 2016, needs some revisions, I am disappointed that the focus of a fourth special session has been almost exclusively on criminal justice reform and not on achieving a complete, balanced and sustainable fiscal plan for the state of Alaska.

A sustainable fiscal plan and strong public safety are inexorably linked. You cannot have the latter without the former. It is not a coincidence that after the Department of Public Safety, peace officers, prosecutors, and the court system’s hours of operation were cut, the safety of the Alaskan public was diminished. Economic uncertainty, job losses and a rampant opioid epidemic are also large contributors to crime. While I support further criminal justice reform, it does not address the underlying problem that is affecting public safety and it is not as urgent as addressing the State’s deficit.

It is my hope that we can conclude our work on criminal justice reform in an expedient manner and dedicate the remainder of the special session to working on HB 4001, which is the Governor’s payroll tax bill. The House Finance Committee held a hearing on the legislation last Thursday. This bill would impose a 1.5 percent tax on wages and net self-employment income. The maximum payment is capped at $2,200 per individual. If passed, it is expected to raise $300 million to $325 million per year. Although this bill needs some work to have my support, it is the only revenue measure of note that the Senate has expressed any willingness to work on.

The state’s budget has been cut by 44 percent over the last 6 years, but revenues have fallen at an even greater rate. To cover our budget deficit, vital state savings accounts have been depleted by $14 billion. Those accounts are projected to be completely empty by FY 2019.  In order to protect public safety, transportation, education, fisheries management and other essential government functions, we need to act now to find new revenue. I wish I had some more concrete progress to report, but I can say with certainty that the House Majority Coalition’s focus remains on achieving a sustainable and responsible budget for Alaskans. In the coming days and weeks, our efforts will be put towards compromise to that end with our counterparts in the Senate. I will provide another update on our progress towards the end of the special session.

Fisheries Update: Disaster Relief Funding for the 2016 Gulf of Alaska Pink Salmon Fishery

I know that many commercial fishermen, residents, and businesses in my district were deeply affected by disastrous pink salmon returns in 2016. Pink salmon fishing is the mainstay of our seine fleet and the effect on families and the economy was devastating. I want to provide an update of where we are in the process of securing funding from the federal government for hard-working fishermen.

First, a little background on how we got to this point:

Shortly after the season, I approached Governor Walker and requested that he appeal directly to the U.S. Department of Commerce to declare a fishery disaster under the Magnuson-Stevens Fishery Conservation and Management Act. On September 15, 2016, Governor Walker wrote a letter officially requesting the declaration of a fishery disaster. On January 18 of 2017, former U.S. Commerce Secretary Penny Pritzker made the declaration official, providing the framework for congress to appropriate the funds. The declaration was made for 2016 pink salmon runs bound for Kodiak, Yakutat, Lower Cook Inlet, Prince William Sound, the South Alaska Peninsula and Southeastern Alaska.

Since that time, my office has been in constant communication with our Alaskan congressional delegation via phone, email and mail, urging that the funding be included in a federal appropriations bill as soon as possible so we can get the funding where it is needed, into the hands of our fishermen and into our economy.

I am ecstatic to announce that we have recently made headway regarding if and when we could expect funding in a federal appropriations bill. On Oct. 2, Senators Murkowski and Sullivan wrote a letter to the Senate Appropriations Committee and Subcommittee urging the inclusion of Alaska’s fishery relief funding in any forthcoming supplemental appropriation for the recent hurricane devastation. That letter can be viewed here:


I also recently had a meeting with Sen. Sullivan, who is the chair of the Senate Commerce, Science and Transportation Subcommittee on Oceans, Atmosphere, Fisheries, & Coast Guard, to discuss the timetable and likelihood of the request being honored. He sounded optimistic and assured me that he and his staff have this on their front burner.

While there are never any guarantees, this is what I know: Alaska’s request is near the top of the queue for funding, our congressional delegation is working hard alongside us to secure it, and there is a good chance it will be forthcoming in an upcoming supplemental bill.

The exact timetable of when the funding might be secured is something that neither myself or our congressional delegation can answer. However, I can promise you this: The squeaky wheel gets the grease and this wheel will not stop squeaking until you, my constituents, have the economic relief that you need.

I will send another update when I know more.

Please contact me at 907-465-3271 or email rep.louise.stutes@akleg.gov for any questions or additional information.


Louise Stutes

State House Representative for District 32

Proudly Serving Kodiak, Cordova, Yakutat, and Seldovia