Gov. Walker will propose 1.5% tax increase in fourth special session

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Governor Bill Walker today issued a proclamation calling the Legislature to a fourth special session.

As expected, the session is set to begin October 23rd in Juneau and will address public safety and revenue.

The session is being called to address Senate Bill 54, which would provide tweaks to omnibus crime legislation passed last year, as well as a bill to enact a flat wage tax.

Walker is proposing a payroll tax of 1.5 percent of wages earned by Alaskans and non-resident workers.

The total amount of the tax would be capped at $2,200, or twice the previous year's permanent fund dividend amount.
For example, if the tax were in place this year, an Alaska resident who earned $50,000 would pay $750 in payroll tax, resulting in a net payment of $350 dollars from the state when subtracted from the $1,100 dollar dividend.

The administration says the proposal is expected to generate between $300 million dollars and $325 million dollars.
About 15 percent of that total is projected to come from non-resident workers, who in 2015 earned more than $2.7 billion dollars.

Walker says that under his proposal, Alaskans would still pay the lowest taxes on a nationwide basis.