Rep. Dan Ortiz visited the Wrangell Borough Assembly last Tuesday. The assembly gave their feedback on Gov. Bill Walker’s proposed budget for the legislative session later this month.
The governor’s proposed budget for the 2019 fiscal year would cut overall spending by 1.7 percent. That looks like reductions for most items, flat funding for education, and increases to infrastructure and public safety. Rep. Dan Ortiz tells the Wrangell Borough Assembly he supports the governor’s plan to move towards a balanced budget.
” In this particular environment, I think this is about the best he’s going to get for education funding. I’m certainly going to be advocating for education funding. But the reality is revenue’s still down,” Ortiz says.
Ortiz focuses much of the meeting not on cuts, but rather, sources of revenue.
To reduce a 2.5 billion dollar deficit and fund infrastructure projects, Ortiz explains the governor’s proposed 1.5 percent wage tax. The governor estimates this tax would bring in $800 million over three years. Ortiz supports this tax, even though he knows taxes aren’t popular.
“So obviously nobody likes a tax, nobody wants to see a tax,” Ortiz says. “But at the same time we’re seeing some issues that are starting to build here for the state that the governor thinks we need to address and I agree with him.”
He asks the assembly what the community of Wrangell would think of that kind of tax.
“I am hesitant, because I don’t know the pulse of Wrangell to recommend a state income tax or a payroll tax,” says Assembly member PattY Gilbert. “I don’t think they want to go with a sales tax.”
The flat tax would apply to all income levels, except those making more than $150,000. A cap would keep individuals in that income bracket from paying more.
Assembly Member David Powell doesn’t like the sound of that. He sees the cap as a regressive rule.
“To me it looks like you’re basically picking on the people that make $30,000 to a $120,000. You have the middle class singled out and that’s it,” Powell says.
Ortiz agrees with Powell, but he says the cap is there to bring in support from the rest of the legislature.
“I’m just telling you [the governor] is doing this because he’s looking at what the senate did last year,” Ortiz says. “And they heard over and over and over again ‘No taxes no taxes no taxes.’”
If approved, the tax would last three years.
The tax revenue would support the Alaska Economic Recovery Plan of the budget. This new plan would fund infrastructure and maintenance projects. This could directly benefit Wrangell. The city has public buildings that need serious updates.
Ortiz also supports a rule to bar legislators from collecting their per diem if the budget isn’t passed in time.
The upcoming legislative session begins January 16th.