Legislature(2001 - 2002)
02/06/2002 01:43 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SUMMARY
HB 225 An Act relating to municipal taxation of alcoholic
beverages and increasing the alcoholic beverage
tax rates.
HB 225 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 225
An Act relating to municipal taxation of alcoholic
beverages and increasing the alcoholic beverage tax
rates.
Co-Chair Williams stated that public testimony was closed on
HB 225.
Representative Hudson asked if it was the intent of the
Committee Chair to move the bill from Committee.
Co-Chair Williams stated that it was his intent to take
testimony only from the sponsor of the bill.
REPRESENTATIVE LISA MURKOWSKI voiced her appreciation to the
Chair for his willingness to take HB 225 back before the
Committee. She explained that she intended to honor the
commitment and hard work of all those involved in getting
the increase on the alcohol excise tax. She implored the
Committee to move HB 225.
Representative Murkowski concurred that there should not be
any additional testimony taken at this time in regard to all
the input from last session and during the interim. She
understood that members on the Committee had already made
individual decisions regarding the bill, but she stressed
that alcohol has costly and negative effects on Alaskans.
Currently, $12 million dollars a year is brought into the
State coffers with the current excise tax. That money is
used to offset the cost that alcohol incurs to the general
fund in the amount of $250 million dollars per year. There
is a huge cost associated with the use of alcohol in Alaska.
She pointed out that Alaska has the highest rate of alcohol
related deaths of any state in the Union. Representative
Murkowski continued, in the Bush Alaska communities, there
is 7 times the national average of deaths related to
alcohol.
She stressed that there is public recognition that the
alcohol excise tax should be increased. On any given day,
there are 300 people waiting to get into any type of
treatment and alcohol recovery program. Representative
Murkowski acknowledged that there are good laws on the books
in the State of Alaska, however, if there is no funding, the
best laws simply do not work.
An increase of the alcohol excise tax would benefit the
State. She advised that HB 225 could be viewed in two
different categories. First, it could be viewed as an
opportunity to further fund treatment programs or with
the State in its current fiscal situation; it could be
incorporated into a long-range fiscal plan, however. She
added that a fiscal plan could help but also complicates the
movement of this bill.
Representative Murkowski discussed that HB 225 could stand
on its own or it could work as part of a fiscal plan. She
maintained that the bill should not be held up in Committee
because there is not a fiscal plan on the table at this
time. She pointed out that when speaking with those that
are actively working on developing a plan, the alcohol
excise tax increase always factors into the scheme.
Representative Murkowski noted that the Long Range Fiscal
Policy Caucus includes it as part of their plan; the
Governor, in the State-of-the-State address included it in
part of his plan. In the Senate, where they have been
reluctant to come forward with any plan, Senator Donley
indicated that it should be part of that plan. She urged
that HB 225 not be bogged down in the game and name of
politics.
Representative Murkowski voiced her concern that an alcohol
tax based plan could be left out of a long-range fiscal
plan. Presently, only one revenue bill, House Bill #3, has
passed out of the House. She hoped that HB 225 could be the
second revenue measure that passes. In order for that to
occur, it must be moved from the House Finance Committee.
Representative Murkowski advised that the public
overwhelmingly supports an increase to the alcohol excise
tax. If the House cannot demonstrate their commitment to
moving through an alcohol excise tax, how could a full
revenue package ever be moved. She encouraged that the
legislation be taken on the merits of its own value.
Representative Murkowski requested that members consider the
legislation and provide the opportunity to move it through
the process.
Vice-Chair Bunde MOVED to ADOPT Amendment #1. [Copy on
file.] He interjected that the bill would not stop the
problems arising with drinkers. He stressed that the bill
is a tax bill and that it would raise revenues. He stated
that the entire State is affected by alcohol abuse and that
everyone in the State should pay to treat alcohol abuse.
The amendment would include an income tax, sales tax and
corporate income tax to help raise revenues. He advised
that a piece-meal plan singling out one industry over
another cannot be happen. He recommended that the State
adopt a broader scope.
Vice-Chair Bunde hesitated in submitting the amendment as he
felt that there needs to be other mechanisms limiting State
spending. He reiterated that there should be other
opportunities within the State. He believed that the State
will need to use the excess earnings from the Permanent
Fund. He agreed with using the alcohol excise tax to help
with the revenue source and supported a larger revenue
package.
Co-Chair Williams OBJECTED to Amendment 1.
Representative Whitaker spoke in support of the amendment.
He commented that the issue of public taxes has not been
significantly debated in the context of a public forum.
Content in the conclusion in passing the amendment would
provide time to revisit this issue. He stressed that it is
time to get the issues on the table. He emphasized, "It is
show time."
Representative Hudson agreed with the intent of the
amendment. He reiterated that the State is attempting to
address the fiscal gap. That final effort must include
personal income taxes and/or some kind of broad State income
tax from either sales and/or personal income. He added that
the gap should include some earning from the Permanent Fund.
The scope of the problem is evidenced by the amendment;
however, he advised that he opposed the amendment. He
pointed out that he has a personal income tax bill in the
legislative body at this time and that by incorporating the
amendment into this bill could kill it. He agreed that
through the subcommittee process, the various elements of
the amendment should be pursued. He recommended that the
concerns be addressed through a public hearing process.
Representative Hudson stressed that HB 225 is definitely a
piece of the puzzle. He noted that he was a co-sponsor to
HB 225 and also of the tobacco tax bill, which, he pointed
out, did pass. He reiterated that the amendment would cloud
the legislation before the Committee.
Representative Harris stated that the amendment would pull
the bill out of Committee. He noted that he opposed the
alcohol excise tax bill and asked to be placed on record as
opposing Amendment 1.
Representative Whitaker noted that if the intention is a
comprehensive fiscal package, the amendment does contain
significant components to cover that intent. If the
intention was to move those components by other bills, he
asked if the purpose could be defeated by not adopting the
proposed amendment. He stressed that the amendment provides
the basis for a comprehensive package.
Representative Whitaker suggested that perhaps the Committee
should table the bill and the amendment in order to consider
the amendment as part of a comprehensive package. He feared
that if a tax were passed on the alcohol industry, the State
would run the risk of putting in jeopardy a comprehensive
package. He observed that would not be good. If the
opportunity is not taken, then the credibility for a needed
comprehensive package will be diminished.
Representative Croft and Representative Davies requested to
hear from the sponsor, Representative Murkowski.
Representative Davies questioned if there had been an
analysis done regarding revenue. Additionally, he inquired
from the Chairs what the procedure would be that if the
amendment was adopted and when the issues would be
addressed.
Co-Chair Mulder noted that there have been requests from
other committees to have a full Finance Committee hearing on
these measures. He stipulated that it was his intent to
take considerable time in the next month in order to explore
the options and the implications of each option. He
reiterated that the plan is intended for future discussion
regarding revenue measures.
Vice-Chair Bunde explained that the amendment would provide:
* State income tax of 3% = $270 million dollars
* Sales tax of 3% = $270 million dollars
* Increase corporate income tax
for non oil entities = $6 million dollars
* For oil entities = $26 million dollars
* Alcohol tax = $31 million
Representative Lancaster spoke to Amendment 1. He stated
that the amendment lacks some major government efficiencies
and in order to go forward with a package, those concerns do
need to be addressed. He added that he did approve of the
amendment and that he would support it.
Vice-Chair Bunde responded that under the bill title, only
so much could be included. He acknowledged the need for the
reduction in State spending.
Co-Chair Williams commented that the amendment goes against
all public involvement and hearings. The public needs to be
informed about how much of a fiscal gap currently exists.
He stated that the amendment would pull the bill out of
Committee. He reiterated that the public needs more
information.
Representative Davies reiterated his request that
Representative Murkowski respond.
Representative Murkowski advised that the amendment does
include the full picture. She agreed that a meaningful
discussion is important. She acknowledged that there is a
general reluctance to give approval to HB 225. She
indicated that if the amendment is what the State is left
with, it will need to be okay.
Co-Chair Mulder interjected that he appreciated the spirit
and intent with which the amendment was put forward and
added that he does support the concept of the "bigger
package". He added that his problem with the amendment is
that he does not support an income or sales tax. He advised
that if the amendment utilized the earning of the Permanent
Fund, it would have his full support. He reiterated that
the Committee should take the approach and give
consideration to the bigger picture.
Representative Whitaker requested a short recess to discuss
the issue.
Vice-Chair Bunde observed that he had accomplished part of
his purpose in proposing the amendment by beginning
discussion. He believed that was a small part of the need.
He noted that should HB 225 make it to the floor and without
limiting State spending, he would be forced to vote against
it.
Representative Hudson advised that following discussion, he
intended to withdraw his objection to the amendment. He
acknowledged that every element in the amendment is a
potential part for resolving the $1 billion dollar annual
fiscal gap. He believed that the need to put the issue on
the "front burner" would be evidenced through passage of the
amendment. He did not expect that all elements of Amendment
1 would be supported. By adopting the amendment, the
Committee would be putting a fairly comprehensive tax
initiative plan forward and would be able to take full
public hearings and testimony. He reiterated his support of
the amendment pointing out that it is an essential part of a
fiscal plan.
Co-Chair Williams stressed his objection to the amendment
and the process that the Committee was going through. He
stated that meaningful public input is essential. He argued
that the proposed process would short-change the public
process. He observed that other legislative members of the
full body were not being included in the process. He
stressed that this is not the right thing to do and that he
strongly objected to it.
Representative Davies disagreed that it would be
shortchanging the public to adopt the amendment. If the
amendment were adopted, the Committee would not have to move
the bill. He suggested one answer would be to adopt the
amendment and then hold the bill in Committee for further
public testimony on other aspects of the legislation.
Co-Chair Williams interjected that there are others in this
building that need to be included in this action. He
elaborated that they might not support the bill. He
stressed that there must be ownership in any fiscal plan
proposed in the Legislature.
A roll call vote was taken on the MOTION.
IN FAVOR: Lancaster, Moses, Whitaker, Bunde, Croft,
Davies, Hudson
OPPOSED: Foster, Harris, Williams, Mulder
The MOTION PASSED (7-4) to adopt Amendment 1.
Representative Moses acknowledged that passage of the
amendment had created a "monster". He MOVED to TABLE HB 225
as amended.
A roll call vote was taken on the motion.
IN FAVOR: Lancaster, Moses, Whitaker, Bunde, Croft,
Davies, Foster, Harris, Mulder, Williams
OPPOSED: Hudson
The MOTION PASSED (10-1).
HB 225 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting was adjourned at 2:28 P.M.
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