Budget Monkey Business in Alaska

Some things that happen in Juneau are just simply amazing. How about "smoke and mirrors", "monkey business" and the ever-tempting "bait and switch"?

There are some strange happenings going on in Juneau usually but this one takes the cake.  Governor Walker introduced a personal income tax bill, HB250, at the beginning of the 2016 session to help fill the huge budget hole which our government has dug for itself (and us).  When fully implemented in fiscal year (FY)19, this income tax would bring in a mere pittance of $205,000,000, barely enough to fill a shovelful of the budget (approximately $4,100,000,000) hole.  Here is part of the fiscal note, which states the personnel requirements of implementing this personal income tax:

State income tax fiscal note manning







Here is a link to the entire HB250 fiscal note.

As you can see, when the tax is fully implemented there are 44 full time employees (bigger government) and 16 part time employees.  The fiscal note also shows that the cost of these employees is $7,200,000.  It would seem as if some of the infrastructure to collect this tax is already in place somewhere with the more than 17,000 state employees (not including University and other Alaska Corporations).

But what a difference a legislative special session makes!  Now the governor has submitted a new personal income tax bill, HB4004, which by some sort of magic erases the personnel requirements to implement his tax.  Now, only one state employee is required to implement this personal income tax.  Now that is what I call efficient government.  Here is the personnel requirement for the “new” governor’s personal income tax bill:

FY2017         FY18           FY19           FY20            FY21               FY22

state income tax fiscal note manning revised


But wait, that can’t be can it?  There is a kind of footnote in the fiscal note for HB4004. Here is the explanation from the governor:

HB4004 personnel commentary income tax



Here is link to the new HB4004.

Now that’s what I call efficiency!  The total personnel requirements went from 44 full time and 16 part time state employees to an admirable ONE.  Maybe we need more special sessions just to reduce the footprint of government.  Look closer.  See this “Implementation Cost” comment: “The full cost of implementing this tax will be brought to the legislature during the 2017 regular session.”.  Doesn’t it seem strange that 5 months ago the governor knew how much the cost to implement this new tax would be and now he doesn’t know?

This seems to fit the old “bait and switch” game.  The best defense for that is “caveat emptor” or “buyer beware”.  And in this case, future Alaskan taxpayers you had better be very aware of the monkey business in Juneau.