Alaska has been one of the few states in the United States that has enjoyed a long time growth during the period of the oil boom over the past couple of decades. Alaska began its oil escapade in the late 70’s and early 80’s which gave rise to a very stable growth in the state for over three decades. The state has also enjoyed enormous tax subsidies, and was one of the major contributors to the United States economy for the longest duration.
The current scenario
In the preset scenario however, the state of Alaska has been facing a major crisis due to the drastic global change in the oil prices and oil markets. Until now, the residents of Alaska have never had to pay taxes directly at such an inflated rate since the 1980’s. Most of the taxation was taken care by the oil giants that functioned in the area. However, the growth in recent crisis has forced many oil companies to run out of business which has created a large vacuum deficit in the states’ economy. For the first time the state’s legislators have proposed legislation that will tax residents directly and at a much higher rate.
The Alaska state governor, Bill Walker proposes to impose and implement a personal state income tax separate and in addition to the federal tax in order to make up for the drastic deficit that the state if up against. Alaska faces a deficit figure of 3.5 billion dollars in its state economy this year. Governor Walker proposes a tax that would add at least 200 million dollars to the state treasury, however, that will not be nearly enough to make up for the economic deficit that looms close this year.
The devolving situation
In addition to the direct taxes on residents, Governor Walker also plans on expanding the taxation to several mining and fisheries industries as a desperate attempt in order to alleviate the devolving situation. He plans on a two percent hike on the mining industry, and a one percent hike on the fisheries industry. Additionally, he plans to squeeze subsidized tax brackets on tobacco and alcohol. In spite of the proposed taxes, the result would engender another 100 million dollars which is still a far cry from meeting the deficit of the state’s economy.
Governor Bill Walker was once a staunch Republican, but later contested and won as an independent. His policies have been a surprising dichotomy of the center left and right national policies. Most of his views vary in a contradictory manner from each other on various issues.