Legislature(2021 - 2022)BUTROVICH 205
04/30/2021 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SJR5 | |
| SJR7 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 6 | TELECONFERENCED | |
| += | SB 53 | TELECONFERENCED | |
| += | SJR 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SJR 5 | TELECONFERENCED | |
| += | SJR 7 | TELECONFERENCED | |
SJR 7-CONST. AM: STATE TAX; VOTER APPROVAL
2:42:18 PM
CHAIR HOLLAND reconvened the meeting and announced the
consideration of SENATE JOINT RESOLUTION NO. 7, Proposing
amendments to the Constitution of the State of Alaska relating
to prohibiting the establishment of a state tax without the
approval of the voters of the state; and relating to the
initiative process.
[This was the first hearing on SJR 7.]
2:42:41 PM
MIKE BARNHILL, Deputy Commissioner, Department of Revenue,
Juneau, Alaska, began a PowerPoint on SJR 7 by paraphrasing
slide 2:
• SJR 7 amends article 9, section 1 of the Alaska
Constitution:
• Requires voter approval for any new tax enacted
by the legislature
• Article 9, section 1(b)
• A form of direct democracy
• Functionally, authorizes an automatic
referendum on new taxes
• Requires legislative approval for any new tax
enacted by initiative
• Article 9, section 1(c)
• Amends the people's constitutional initiative
power
• Functionally, a form of checks and balances
MR. BARNHILL characterized section 1 (b) as a prepackaged
referendum. Whenever the legislature enacts a new state tax,
voters will have an opportunity to reject it under this
amendment to the constitution. If Alaskans enacted a tax through
the initiative process, section 1 (c) would require legislative
approval. In this sense, SJR 5 would amend the people's
constitutional initiative power to add legislative approval,
thus providing a form of checks and balances. He characterized
this as essentially coupling direct democracy with
representative democracy by requiring both to enact any new
state tax.
2:45:07 PM
SENATOR SHOWER asked if the people have ever taxed themselves in
this manner.
MR. BARNHILL answered no; then clarified that the marijuana tax
was done by initiative.
2:45:27 PM
SENATOR MYERS concurred.
2:45:53 PM
SENATOR KIEHL asked what was wrong that needs fixing in the
current referendum language.
MR. BARNHILL said, "Nothing is broken." SJR 7 acknowledges that
the state likely cannot rely on oil taxes, so the state will
need to rely on taxes to pay for government services. The policy
concept in SJR 7 is to provide the people with a more powerful
voice and legislative consideration whenever enacting a new
state tax.
SENATOR KIEHL pointed out that the state has previously had
statewide taxes in place, including those enacted by initiatives
and others that were legislatively enacted, which were later
repealed. He maintained that he did not understand the need for
SJR 7.
MR. BARNHILL restated that the intent of SJR 7 is to give the
people a stronger voice.
2:47:37 PM
SENATOR HUGHES said SJR 7 relates to any new taxes. She
described a scenario in which the state enacted a 2 percent
sales tax. She asked if the legislature subsequently raises the
tax rate to 10 percent whether it would be considered a new tax
under SJR 7.
MR. BARNHILL responded that the hypothetical scenario she
described would not go before the voters. In the last
legislative session, he recalled a resolution before the
legislature that proposed amending Alaska's Constitution by
requiring any new taxes or increases to taxes would require
voter approval. However, the language requiring voter approval
for any increases to taxes was removed by SJR 7.
2:48:25 PM
SENATOR SHOWER stated that the legislature has been discussing
tax issues for years. He offered his view that SJR 7 relates to
a broad-based tax rather than the marijuana tax, which is more
of a user fee. He said that the state will need to enact an
income tax, sales tax, or other tax to pay for government
services.
2:49:27 PM
MR. BARNHILL reviewed voter approval in other states on slide 3:
• Other States That Require Voter Approval of New
or Increased Taxes:
• Colorado (1992)
• "Taxpayer Bill of Rights" (TABOR)
• Requires voter approval of new taxes and
increases to existing taxes at state and local
level
• Colorado voters approved marijuana tax in 2013
• Missouri (1996)
• Requires voter approval of tax increases of
$50mm (adj. for inflation)
• 2018 Proposition D, $400mm increase to gasoline
tax, defeated at polls
• Washington (2001)
• Requires voter approval of certain increases to
real and personal property tax ("levy lid
lifts)
• In recent years, 75% of levy lid lifts have
been approved by voter
MR. BARNHILL directed attention to a spreadsheet in member's
packets that listed taxes considered in Colorado, Missouri, and
Washington. He reported that 5 of 15 tax proposals put before
the voters in Colorado were approved and 3 of 11 measures
Missouri put before the voters were approved.
2:51:25 PM
MR. BARNHILL reviewed considerations on slide 4:
• Considerations:
• Voter consent to new taxes may increase tax
compliance
• Hug & Sporri, "Referendums, Trust and Tax
Evasion," European J. of Pol. Econ. (Mar. 2011)
• Requirement of voter consent can delay
implementation and collection of new revenues
• National Council of State Legislatures has
considered generally the pros and cons of "tax
and expenditure limitations"
2:52:06 PM
MR. BARNHILL referred to the Hug & Sporri study listed on the
slide. This study showed tax compliance actually increased in
those countries in which the voters were asked to consent to a
new tax.
2:52:28 PM
MR. BARNHILL stated that delays in enacting new taxes requiring
voter approval could be disruptive to governments during revenue
shortfalls.
MR. BARNHILL pointed to the pros and cons of "Tax and
Expenditure Limitations" shown on slides 5 and 6. He stated that
this information is posted on NCSL's website, which members can
review.
2:53:17 PM
SENATOR HUGHES asked if any studies found that voter
participation increases when tax proposals are on the ballot.
MR. BARNHILL answered that he was unsure of any studies, but it
makes sense that more voters would come to the polls.
2:53:44 PM
CHAIR HOLLAND opened public testimony on SJR 7.
2:54:08 PM
MIKE COONS, President, Association of Mature American Citizens
(AMAC), Mat-Su Chapter, Palmer, Alaska, read into the record a
letter by Bob Carlson, President, AMAC Action to Senator Hughes
[Original punctuation provided]:
We are pleased to support SJR 7, proposing an
amendment to the Constitution of the State of Alaska
to prohibit the establishment of state tax without the
approval of the voters of the state. Specifically,
this amendment provides the citizens of Alaska the
right to reject, by popular vote, a new tax. And if
they approve it, the amendment provides for a check by
the legislature before such a tax could take effect.
This is an excellent approach to preventing runaway
taxation and it serves well to protect Alaskans, and
specifically seniors on fixed and modest income.
I am pleased to offer our organization's full support
for SJR 7.
Bob Carlson, President
AMAC Action
MR. COONS said AMAC's Mat-Su Chapter membership fully supports
SJR 7. He offered his belief that the people run government by
telling government what to do. SJR 7 provides the means for the
voters to make the final decisions on any new taxes in Alaska.
2:56:55 PM
CHAIR HOLLAND stated that those wishing to provide written
testimony could submit them to senate.judiciary@akleg.gov.
2:57:07 PM
BERT HOUGHTALING, representing self, Big Lake, Alaska, stated
that he supports voter approval of any new taxes or any old
taxes since taxes affect Alaskans. For example, the House Ways
and Means Committee is currently discussing statutory changes to
implement taxes. Alaskans will not vote on it if the legislature
passes a tax bill. SJR 7 will ensure that legislators will not
make decisions on new taxes without first obtaining approval
from Alaskans.
2:59:05 PM
CHAIR HOLLAND closed public testimony on SJR 7.
2:59:14 PM
SENATOR KIEHL said he still has questions about what constitutes
a new tax and how SJR 7 will affect local taxes.
[SJR 7 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR5 - Testimony - Apr 30.pdf |
SJUD 4/30/2021 1:30:00 PM |
SJR 5 |