Homer City Council supports income tax and reduced PFDs in letter to Gov. Dunleavy

Mar 12, 2019

Credit Image Courtesy of the City of Homer

Updated: 4:01 p.m. 3/12/19

The Homer City Council has penned a strongly worded letter to Gov. Michael Dunlevy asking him to explore possible revenue options such as a state income tax instead of balancing the state’s budget through reduced state services.   

The letter says the far-reaching cuts in Dunleavy’s budget proposal reflect quote, “little concern for the burden that you have passed on to the residents of Alaska and the local governments that serve them,” end quote.

Council members are asking the governor to support the restructuring of oil and gas tax credits, arguing that Alaskans subsidize gas and oil exploration. The council also voiced support for reducing state residents’ Permanent Fund dividends to pay for state government services.

The council warns that Dunleavy’s proposal to virtually eliminate state ferry service and his proposed large cuts to Medicaid, K-12 education and the university system would be a detriment to the city and its residents.

While all six council members signed onto the letter, councilman Heath Smith doesn’t view the options laid out in the letter as a priority list and he says that all three ideas would likely need to be implemented together in order to provide financial relief for the state and local governments.  

The letter also argues that city residents have “stepped up to the plate” with a recent sales tax increase and that there is minimal support for raising local taxes.  

The Legislature will have the ultimate say over the final budget sent to Gov. Dunleavy. Both the Senate and House finance committees are still hashing out the impacts of the cuts the governor is proposing. The legislative session is scheduled until April 14, but could go as long as May 15.