Caucus Urges Saving Portion of Tax Payment
Pay down retirement debt, set aside the rest

Juneau - The Senate Republican Caucus advocates using a portion of the $813 million the State received from last year’s tax change to help pay down the retirement system debt, then setting aside the rest for the future.

“The Senate Minority is supportive of honoring the Governor’s request to pay down a portion of our retirement debt, and then putting the remainder of the one-time funds into our savings account. If there is opposition to using the Constitutional Budget Reserve as a savings mechanism, we could consider using the education account to put the funds aside and out of reach until next year,” said Senate Minority Leader Gene Therriault, R-North Pole.

“We would like to see a portion of the true-up revenue placed in savings instead of being consumed in the current year spending. We’re fearful, with the appetite for spending, that there will be a clamor to spend all of this even though it appears we are heading into a deficit in the next year or two,” Therriault said. “Spending it all this year would be imprudent and a disservice to Alaskans. Placing a portion of the revenue into the education carry forward fund would keep us from using it all this year, and make it available for a need we know we will have next year.”

The $813 million tax payment the State received April 2, 2007 represents the increase in revenues that resulted from replacing the previous economic limit factor with the new Petroleum Profits Tax in 2006. The PPT tax changes were retroactive to April 1, 2006, but taxpayers were allowed to make monthly payments based on the prior ELF system for the rest of 2006. April 2 was the deadline for the “true-up” payments for any additional production tax liability for the period of April 1, 2006 through Dec. 31, 2006.

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A sound actuality can be downloaded from the following link:
http://www.aksenateminority.com/media/25/therriault2007040401a.mp3