Dear Friends and Neighbors,

As we approach the 90th day of the legislative session, I’ll continue to keep you updated about legislative happenings in Juneau. Committees continue to consider the revenue bills as well as the proposals to restructure the Permanent Fund.

This week, the House Health and Social Services Committee recommended passage of House Bill 345. I introduced HB 345 with Juneau Representative Cathy Muñoz because it saves the state over one million dollars and improves health care for women.

Anchorage Municipal Election Results

Congratulations to our new Anchorage Assembly members and Anchorage School Board members!

Congratulations to our newest West Anchorage Assembly member, Eric Croft, and our newly elected and re-elected Anchorage School Board members, Kay Schuster and Bettye Davis. I look forward to working with them to serve our friends and neighbors of West Anchorage by representing our shared values!

Insurance Coverage for 12-Month Birth Control Prescriptions

HB 345 requires health care insurers, including Medicaid, to dispense 12 months of prescriptive oral contraceptives at a time. Research shows that women who were dispensed a 12-month supply of oral contraceptives were 30% less likely to have an unintended pregnancy than women who received a 1- or 3-month prescription. The study showed that health insurance programs and public health programs may avert unintended pregnancies by increasing dispensing limits on oral contraceptives to a 1-year supply.

You can watch the entire bill hearing on HB 345, here.

In 2010, 48% of all pregnancies in Alaska were unintended, and 64.3% of unplanned births in Alaska were publically funded—resulting in a $42.9 million cost to the state. Unintended pregnancies have significant consequences for individual women, their families, and society as a whole. Preventing unintended pregnancies by providing efficient access to contraceptives is projected to save $1,355,600.

In Alaska, women often face challenges when trying to access prescription contraceptives. For example, women living in rural Alaska have less access to healthcare services and less reliable access to prescriptive contraceptives. And fisherwomen working on a boat for months at a time need longer supplies of prescription oral contraceptives. HB 345 aims to make oral contraceptives more available to Alaskan women, improve women’s health care, and reduce costs associated with unintended pregnancies.

HB 345 passed out of the House Health and Social Services (HSS) committee yesterday and is under consideration by the House Finance committee. Senate Bill 156, the companion to HB 345, is working its way through the Senate. It is my hope that both bills will be passed before the end of the legislative session.

Governor Walker’s Income Tax Proposal

In last week’s newsletter, I wrote about Representative Seaton’s House Bill 365, the Individual Income Tax and Permanent Fund Refundable Tax Credit. The Walker-Mallott administration has also proposed an income tax. HB 250would establish a personal income tax equal to 6% of a taxpayers total federal tax liability for both Alaska residents and nonresidents who earn income in the state.

Alaska has had an income tax in the past. In 1949, Alaska established a personal income tax at 10% of a taxpayer’s federal income tax liability. By 1961, the tax was 16% of federal tax liability. The state switched to a graduated tax rate structure independent of federal income tax rates in 1975, ranging from 3% to 14.5% on taxable income. With creation of the Permanent Fund Dividend in 1980, the personal income tax in Alaska was repealed.

HB 250 taxes an individual’s income at 6% of person’s federal income tax liability. The tax would be approximately 1.5% of a person’s average income and 20% - 30% of Alaskans would pay no tax.  

Currently, 43 states have an income tax. The average state income tax is about 30% of federal liability—five times Alaska’s proposed rate. If we adopt the proposed tax, Alaska’s rate would be the lowest among the states with an income tax.

Below are examples of income tax estimates for adults with children:

The Department of Revenue estimates that the proposed income tax would generate $200 million annually in revenue. As we work to address Alaska’s fiscal challenges and agree to a responsible action plan for Alaska, it is important to consider bills like HB 250.

Recent Economic Indicators

In this month’s “Alaska’s Economy” newsletter, Scott Goldsmith, Emeritus Professor of Economics, Institute of Social and Economic Research at the University Of Alaska Anchorage, provided information on various economic indicators. Here are some highlights:

• The February 2016 seasonally adjusted unemployment rate for Alaska was 6.6 percent and the national rate for February was 4.9 percent.
• Anchorage employment is expected to fall by 1 percent, about 1,500 jobs, in 2016. Oil and gas would lose 600 jobs, government would lose 500 jobs, while construction and business services would each lose 400 jobs. Health care and Leisure together would add 500 new jobs.
  
  
• North Slope oil production through mid-March of fiscal year 2016 has averaged 514,000 barrels per day. This increase is about 15,000 barrels per day (3 percent) higher than last year.
• Currently, Alaska is exceeded in oil production by Texas, the federal region of the Gulf of Mexico, North Dakota, and California. A decade ago, Alaska was exceeded only by Texas and the Federal region of the Gulf of Mexico.
  
  
• Alaska hosted 1.78 million out-of-state visitors during the 2015 summer season. This increase in tourism is 7 percent over the 2014 season and the largest since visitor tracking began in 1985. Most of the increase is attributable to a 13 percent increase in air volume. Cruise volume increased by 3 percent.
  
  

As always, please let us know if you have other suggestions or concerns.

Sincerely,

    Rep. Matt Claman

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