Legislature(2001 - 2002)

03/20/2002 01:15 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HJR 36 - CONSTITUTIONAL AMENDMENT : TAX CAPS                                                                                  
                                                                                                                                
Number 0441                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be  SPONSOR  SUBSTITUTE  FOR  HOUSE   JOINT  RESOLUTION  NO.  36,                                                               
Proposing  an  amendment to  the  Constitution  of the  State  of                                                               
Alaska relating to  limiting the rate of  state individual income                                                               
taxes and sales taxes.                                                                                                          
                                                                                                                                
Number 0420                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  moved to  adopt  committee  substitute (CS)  for                                                               
SSHJR 36, version  22-LS1402\P, Kurtz, 3/20/02, as  a work draft.                                                               
There being no objection, Version P was before the committee.                                                                   
                                                                                                                                
CHAIR ROKEBERG  remarked that in  Version P, [subsection]  (a) of                                                               
Section 1  has been  rewritten and  now reads:   "The rate  of an                                                               
individual income  tax levied  by the State  may not  exceed five                                                               
percent  of  an individual's  taxable  income,  as that  term  is                                                               
defined in  federal law."   He indicated that this  constitutes a                                                               
flat tax rate not to exceed 5 percent.                                                                                          
                                                                                                                                
REPRESENTATIVE  JAMES   indicated  that  using   an  individual's                                                               
[federal]  taxable  income  as  a basis  by  which  to  determine                                                               
whether a  state income  tax had  reached its  cap was  fine with                                                               
her.                                                                                                                            
                                                                                                                                
Number 0092                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL made  a  motion  to adopt  Representative                                                               
Ogan's Amendment  1, 22-LS1402\L.1, Kurtz, 2/22/02,  [which would                                                               
need to  be altered to conform  with line numbers in  Version P].                                                               
Amendment 1 read:                                                                                                               
                                                                                                                                
     Page 1, lines 1 - 2:                                                                                                       
          Delete "limiting the rate of"                                                                                       
                                                                                                                                
     Page 1, line 6, following "Tax Caps"                                                                                     
          Insert "; Voter Approval of New Taxes and Rate                                                                      
     Increases"                                                                                                               
                                                                                                                                
     Page 1, following line 14:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(c) A new individual income tax or sales tax or                                                                      
     an  increase  in the  rate  of  levy of  an  individual                                                                    
     income  tax or  sales  tax enacted  by the  legislature                                                                    
     does not take  effect unless ratified by  a majority of                                                                    
     the  voters  at  the   first  statewide  election  held                                                                    
     following enactment of the tax or the tax increase."                                                                       
                                                                                                                                
REPRESENTATIVE  COGHILL explained  that Amendment  1 simply  asks                                                               
that any individual  income tax or sales tax, or  any increase in                                                               
such, would not take effect unless  ratified by a majority of the                                                               
voters at  the next statewide  election held  following enactment                                                               
by the legislature of the tax  or tax increase.  He remarked that                                                               
because  citizens  don't currently  pay  a  state tax,  they  are                                                               
disconnected from  state government; he suggested  that Amendment                                                               
1 would help reestablish that connection.                                                                                       
                                                                                                                                
TAPE 02-34, SIDE A                                                                                                              
Number 0016                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ mentioned  that he  was pleased  to see                                                               
that some  of his colleagues  were interested in  putting matters                                                               
to a public vote, and that  he hoped they would "carry that logic                                                               
through  in other  matters."   He remarked,  however, that  he is                                                               
concerned  with  whether [Amendment  1]  would  fit in  with  the                                                               
current  Alaska State  Constitution, which  precludes the  public                                                               
from voting on appropriation matters.                                                                                           
                                                                                                                                
CHAIR ROKEBERG  said he tends  to agree that [Amendment  1] cedes                                                               
the  legislature's  power of  appropriation  to  the public  and,                                                               
thus, the legislature would not be doing its job by adopting it.                                                                
                                                                                                                                
REPRESENTATIVE JAMES indicated agreement.                                                                                       
                                                                                                                                
REPRESENTATIVE MEYER remarked that  the Municipality of Anchorage                                                               
(MOA) is doing  something similar to what is  being attempted via                                                               
Amendment 1.                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAMES  pointed out  that a statewide  issue cannot                                                               
be  compared to  municipal issue.   She  opined that  adoption of                                                               
Amendment    1   would    be    abdicating   the    legislature's                                                               
responsibility.   She also  noted that one  of the  problems with                                                               
putting an  issue before  the voters is  that not  everybody that                                                               
can vote does so.                                                                                                               
                                                                                                                                
REPRESENTATIVE  COGHILL   offered  that  having  an   issue  like                                                               
Amendment 1 on the ballot might increase voter turnout.                                                                         
                                                                                                                                
REPRESENTATIVE JAMES  argued, however, that less  than 20 percent                                                               
of eligible voters even voted  [on the advisory vote of September                                                               
1999] regarding  use of the permanent  fund.  And so  although 83                                                               
percent voted  "No," it  was merely  83 percent  of a  very small                                                               
portion of the population.                                                                                                      
                                                                                                                                
CHAIR ROKEBERG, after  noting that he was speaking  in defense of                                                               
the Alaska  State Constitution,  said that  Amendment 1  would be                                                               
abdicating  the  legislature's   responsibility;  he  then  asked                                                               
Representative Coghill to withdraw Amendment 1.                                                                                 
                                                                                                                                
Number 0312                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL, after arguing  that Amendment 1 is merely                                                               
"ratification" rather  than "installation,"  nonetheless withdrew                                                               
the motion to adopt Amendment 1.                                                                                                
                                                                                                                                
Number 0351                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BERKOWITZ moved  to  report committee  substitute                                                               
for  SSHJR  36,  version  22-LS1402\P,  Kurtz,  3/20/02,  out  of                                                               
committee [with  individual recommendations and  the accompanying                                                               
fiscal note].                                                                                                                   
                                                                                                                                
CHAIR ROKEBERG objected  for the purpose of stating:   "What this                                                               
does is  make this  a 5  percent cap  on an  individual's taxable                                                               
income, as opposed to the aggregate."                                                                                           
                                                                                                                                
CHAIR ROKEBERG then  withdrew his objection and  noted that there                                                               
were  no  further objections.    Therefore,  CSSSHJR 36(JUD)  was                                                               
reported from the House Judiciary Standing Committee.                                                                           

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