Alaska's governor revealed his plan to institute the state's first income tax in 35 years.
Governor Bill Walker's announcement on Wednesday was made in response to Alaska's multi-billion dollar budget deficit brought on by steadily falling oil prices.
The state is heavily dependent on oil revenue. This week oil prices dropped to a 7-year low -- below $37 a barrel.
Walker said taking action was essential to avoid another recession like the one that plagued the state in the 80's when oil prices also fell steeply. That recession led to numerous homes being foreclosed.
"[W]e cannot continue with business as usual and live solely off of our natural resource revenues," Walker said in a statement. "Never before has the state faced a deficit so large that we are draining more than $9 million from savings every day."