Gov. Mike Dunleavy says he’ll soon propose a statewide sales tax as part of his larger plan to stabilize the state’s finances.
"There will be a temporary, seasonal sales tax concept put forth for discussion with the Legislature," Dunleavy said during a cabinet meeting livestreamed on his Facebook page Wednesday in which he and the state’s 15 department commissioners outlined their accomplishments over the past seven years.
Dunleavy said a fiscal plan — along with moves to advance a natural gas pipeline from the North Slope — are his top two priorities for the legislative session that began Tuesday.
Dunleavy has been tight-lipped about the specifics of his plan. The political news site the Alaska Landmine reported Tuesday it would include a seasonal sales tax, a limit on government spending, changes to oil taxes and a new formula for the Permanent Fund dividend. Dunleavy’s communications director, Jeff Turner, declined to confirm the Landmine report and said by email, “the bills are still being finished.”
During Wednesday's meeting, Dunleavy said he would start rolling out his fiscal plan next week. A required ten-year plan released alongside his budget in December identified some $1.6 billion in unspecified new annual revenues starting in July 2027. Dunleavy said he expects the plan to raise revenues “pretty close to that mark.”
"The proposal and the fiscal plan has multiple components," he said. "It's a road map to inject stability, especially over the next five years, when revenue is not quite what will be in the years out."
Dunleavy emphasized that most of the measures he’d propose would serve as a temporary, half-decade bridge. After five years, Dunleavy said he expects state revenues to rebound thanks to increased oil production, growth in the Permanent Fund and the possible natural gas pipeline.
Lawmakers have said they’ll consider Dunleavy’s proposals, but it’s unclear if a sales tax and other components of Dunleavy’s plan will have enough support to pass the state House and Senate.
Dunleavy privately told lawmakers in 2023 he planned to introduce a sales tax, but he ultimately did not.
