Alaska State Department of Revenue Commissioner Randy Hoffbeck is completing his last few weeks in the Walker Administration. His last day will be Aug. 17. He will have lasted two and a half years and survived tumultuous fiscal battles with the Legislature as he has attempted to make the case for higher taxes.
Hoffbeck said in a statement, “…as time goes on, I realize I need to refocus my life on the call God has put on my heart; that I can no longer tell God, ‘Just a minute. I am almost done here.'”
Hoffbeck had studied and earned his master’s degree in divinity in 2014 before joining the Walker Administration.
The resignation is no surprise. It was widely discussed in political circles that he would leave after the Alaska Legislature completed its 2017 session. But the session dragged on into two special sessions, delaying his expected departure.
“It is with mixed emotions that I have reluctantly accepted Randy’s resignation as revenue commissioner,” Walker said in a statement. “For three years, Randy has been an integral member of this administration, spearheading the state’s efforts to create a plan that steers Alaska toward a sustainable future.”
Hoffbeck was appointed on Dec. 16, 2014, but he was delayed coming into the Walker Administration because he and his wife were volunteering in Kenya.
He started working in late January of 2015. Back then, he was quoted by the Alaska Journal of Commerce saying, “Now we know we have a problem, and people are more willing to talk about it than in the past. We’re seeing now what is inevitable, that oil will decline, and at some point we’ll have to deal with this. We have to decide what our state government should be doing,” he said. “The opportunity here is to get ahead of this game. This is not a crisis. It’s a cash-flow problem.”
He was talking about taxes and more revenue that he’d need to collect. His first year with Walker he was tasked with fighting for a tax that would raise about $200 million for the state, but cost $20 million or more to execute, and include an addition of 60 state employees as revenue collectors. That didn’t work.
By 2017, Hoffbeck and the governor worked behind the scenes to have the new House Finance Committee leadership, now run by a Democrat-controlled caucus, offer an even bigger income tax, which would have raised up to $700 million from working Alaskans. The tax plan was designed by an East Coast tax attorney, that his Revenue Department had contracted with, and was modeled after the IRS’ bracketed tax system.
That offer also failed in the Republican-controlled Senate.
Hoffbeck’s letter to the governor was warm and endorsing of the governor’s leadership:
WHO WILL REPLACE HIM?
Gov. Walker is already in full-election-season mode. He’s in on record saying he’ll bring another tax proposal forward and call the Legislature into special session this fall to consider it. He’s going to need a “conservative tax proponent” to help him sell the tax, and that combination is hard to find.
Walker has known of the impending resignation, and no doubt his Chief of Staff Scott Kendall has been scouring the political landscape for the right tax warrior.
The choice is not likely to be Tax Division Director Ken Alper, who fits the bill of a tax proponent, and who has been promoting an income tax for years. Alper would hurt Walker’s chances for re-election.
One political observer suggested Steve Rieger, former state legislator of both the House and Senate, and former member of the Alaska Permanent Fund Corporation’s Board of Trustees. Rieger is a Republican who might come out of retirement to work to work the fourth quarter of the Walker Administration, which could be as little as 17 months.
In the meantime, Deputy Commissioner Jerry Burnett of Juneau will step into the role of interim commissioner. Burnett has been spending a lot of time on his boat in Southeast Alaska this summer, has enough time on the books to retire comfortably, and has been discussing his plans to leave State government.
It would fall to Burnett to be the salesman for an income tax until Walker finds a commissioner who will wholeheartedly embrace the task.