Page 1639 – Must Read Alaska

Day One: Third floor marimbas, speech prep, happy birthdays

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January 18, 2017

Screen Shot 2017-01-17 at 8.47.43 PM — *Senator Lyman Hoffman discusses the budget during the Senate Majority press availability.*

Day One of the 30th Alaska Legislature looked much like many others that came before it. The new lawmakers took their oaths of office and traipsed with their staff members to the Third Floor of the Capitol to have their picture taken with Lt. Gov. Byron Mallott.

Coming off the elevator, they were met by a six-member marimba band in the lobby outside the Governor’s Office, merrily playing old favorites like “Yankee Doodle Dandy.” It was unclear who had paid for the band.

When the House gaveled in, Rep. Bryce Edgmon was elected as the new speaker. It was not unanimous, however. Breaking with tradition, Rep. David Eastman, newly elected in District 10, voted against Edgmon.

He said he’d been asked by people in his district if he was going to vote for House leadership that was for a sustainable budget, and who was pro-life.

Eastman said, “I haven’t been able to convince Edgmon to be any of those things yet, so voting for him was more than I could do, but I congratulated him on his election and I have the deepest respect for him as Speaker. I think we’ll have a good relationship going forward.”

Edgmon, a Democrat, was being heralded by the press as the first Alaska Native Speaker of the House. If the Republicans had maintained control, the Speaker likely would have been Charisse Millett, also an Alaska Native. Either way, it was historic.

Of the 60 legislators who were sworn into office, a quarter of them — 15, to be exact — are part of a freshmen class.

Happy birthdays were sung in the House to two representatives, and family members, including plenty of children, filled the seats in the galleries to witness the ceremonial first day. Across the street, Juneau police organized a “kindness” rally to mark the department’s Year of Kindness initiative. About a dozen people gathered, including Rep. Dan Saddler, who wandered across the street to mingle in an area typically used for pro-life demonstrations every session.

In the Senate, the gavel passed from Sen. Kevin Meyer to Sen. Pete Kelly, who took over as Senate President. Senate leadership held a press conference, where Senate Finance Co-Chair Lyman Hoffman said the Senate’s expected $300 million in cuts would focus on the Department of Transportation, the University system, Education, and Health and Social Services.

(Watch the Senate Majority’s press conference here.)

Leadership in the Senate sent a strong message to the House that a spending cap and cuts are both high priorities and must come before the body will tap in to the Permanent Fund Earnings Reserve Account. The Senate is rolling out a three-year plan to cut spending by $700 million.

Over at the Governor’s Mansion, Gov. Bill Walker rehearsed his State of the State Address, which will be broadcast live at 7 pm on Wednesday, Jan. 18.

(Watch the State of the State Address live here.)

At the day’s end, many legislators and lobbyists were spotted at Salt, the restaurant, where they’ll all be spending many an evening during what Speaker Edgmon has been quietly warning will be a six-month long battle royale over the Alaska 2018 budget gap. A lot of crispy calamari will be downed between now and adjournment, whenever that is.

Will ConocoPhillips be allowed to produce at Willow? State decisions factor in

Suzanne Downing

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January 17, 2017

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Will ConocoPhillips be allowed to produce at Willow? State decisions factor in

Last week, ConocoPhillips-Alaska President Joe Marushack stood before a room of energy contractors and service providers and, in his low-key way, made a dramatic announcement:

Three-hundred million barrels of oil have been identified at the company’s Willow drilling site in the National Petroleum Reserve-Alaska.

*Joe Marushack, ConocoPhillips-Alaska President*

It was some of the best news the members of the Alaska Support Industry Alliance could have received first thing on Friday the 13th.

A visitor could almost see the thought balloons dance above their heads: Things were, perhaps, looking up for the gritty, determined energy contractors who have come to expect nothing but bad news. If only they can hang on through low prices. If only government will not get in the way. If ConocoPhillips can clear the state and federal obstacles to get from discovery to production.

That the announcement was made to the actual Alaskans who have workers freezing in the cold, dark Arctic nights to make these projects happen was not lost on this crowd. A buzz rippled through the banquet hall.

The two exploration wells Marushack referred to are at Greater Moose’s Tooth Unit and are a stone’s throw from the company’s Alpine operation. The Willow prospect could put 100,000 barrels a day of light oil into the Trans Alaska Pipeline, he said to the Alliance’s annual Meet Alaska conference.

Production from Willow might continue for well over a decade and bring the volume of the pipeline up by nearly 20 percent during its peak production years, something that is very much in Alaska’s interest.

A find this size, within 28 miles of existing infrastructure, is a big deal. On federal land, the oil would go through the pipeline and be subject to royalties and taxes that the State of Alaska and local governments like the North Slope Borough would receive. Alaskans would get their share through their Permanent Fund dividends.

Also, the development phase of Willow would require many billions of dollars, Marushack said, and bring potentially thousands of jobs online. Much of that would spin through the currently faltering Alaska economy and, especially, the heavily battered oilfield services industry.

ConocoPhillips’ Greater Moose’s Tooth-1 project, now under construction, and GM-2, in the permitting stages, will put 30,000 barrels into the pipeline during peak production. GMT-1 will start pumping oil in 2018. GMT-2 will follow, and Willow could start pumping by 2023, if the company can get through all the federal permits in a timely way.

Alaska has a big dog in the fight to help this company and others get their projects up and running. Between GMT-1 and 2, Willow, and Armstrong Energy’s Pikka project, these producers could increase today’s pipeline’s flow from 517,000 barrels per day to close to 650,000. The point is: Prospects are good.

RAZOR’S EDGE: There are things that can get in the way. ConocoPhillips is working in Alaska at a loss right now. Cash flow is negative. The company hopes to get to “cash flow neutral” this year, but if legislators or state officials in the Walker Administration do anything that raises the cost of doing business in Alaska, then the folks who run ConocoPhillips-Alaska will have a tough time preserving the projects in the near future.

Marushack noted that the entire ConocoPhillips annual capital spend for 2017 is $5 billion, and $1 billion of that is slated for Alaska.

He also pointed out there are many great finds in the continental United States, not to mention globally. For example, shale oil that is easy to get to, provides quick return on investment, and doesn’t require long lead times is a very attractive investment right now. Alaska is having a tougher time competing because of it.

Alaska is in a precarious position if it wants to see these major oil finds move forward to development. Companies need to know that oil taxes aren’t going to spike again, and that the State will do its part to make sure the project can be competitive with all the other prospects ConocoPhillips has around the world — projects that have managers and other internal advocates who would love to get their hands on the $1 billion now designated for Alaska.

“If we get delayed, that capital goes somewhere else,” Marushack stated. “So it is very important we stay on track.”

DECISIONS IN THE BALANCE: As the Alaska Legislature gavels in today, and the State’s looming government budget crisis is making Alaska’s oil producers wary, Senate President Pete Kelly articulated the role he’d like to see government play:

“As we are looking at oil taxes or oil tax credits, production has to be our goal,” he said during a press availability this morning.

Last year the Gov. Bill Walker Administration had pages upon pages of complicated tax restructuring plans, and there was no focus on oil production, Kelly said. Production is what’s needed to get the Alaska economy stabilized.

“Whatever actions we take cannot result in less oil going through it,” Kelly continued, referring to the Trans Alaska Pipeline, which is running nearly three-quarters empty.

ALLIANCE AT 40: The Alliance is a 40-year-old trade organization with more than 500 members that provide over 50,000 Alaska jobs in the state’s oil, gas, and mining industries.

That ConocoPhillips made the announcement to this group went over well. They know that a find this size has big implications for their businesses, which have all suffered during the downturn in oil prices and with Gov. Walker’s tax attempts that have made oil production less attractive.

The majority of the companies making up the Alliance have had to downsize operations, cut jobs, and lose valuable employees who have years or decades of North Slope experience — experience that is hard to replace.

Marushack identified with that. His company has also gone through two tough years, he said: “This is about as different a time as we can recall. We can’t control oil prices so we need to control the things we have a lot of control over.”

“We need to retain a capable Alaska workforce,” Marushack said. “That means enough work to maintain health of contractors.”

At the beginning of every Alliance conference, people who were present during the original discovery at Prudhoe and who worked on building the Trans Alaska Pipeline are always asked to stand and be recognized.

As years go on, the numbers diminish, but even last week, some 30 people stood and received a round of applause. They’ve seen the booms and the busts, the upturns and the downturns. They’ve recently watched as hundreds of jobs have been shed, and as wages, including their own, have been frozen.

For the graying crowd of pipeline pioneers, they are just hoping and praying for government policies that will lead to a healthy industry for their children and grandchildren.

Joe Marushack was speaking their language. The Willow project going forward has “got to have fiscally stable tax structure,” he said. “This is multi-billion dollar project, a step up from GMT-1 and 2. We are basically structured for $1 billion of capital investment, and that is at risk if there is an increase in taxes.”

Read ConocoPhillips-Alaska’s press release on the Willow discovery.

Which fundraiser will Gabby go to?

Suzanne Downing

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January 17, 2017

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gabrielle ledoux — Rep. Gabrielle LeDoux, madam of “Gabby’s Tuesday PAC”

NO NATURAL HOME ON THE RANGE: Both Democrats and Republicans have fundraisers in Juneau tonight, and the buzz around the Capitol is — where will the Musk Ox Republicans go?

To the Republican fundraiser at the Hangar Ballroom, or will they stop in at the Juneau City Museum, where their new allies are –the Democrats who have taken over the majority in the House?

The Musk Ox have gone over to the Democrats in a pure, unadultrated grab for power. It was a dangerous play because the Democrats barely need them, and the Republicans are now furious with them.

Rules Chair Gabrielle LeDoux, still a Republican, is now the titular leader of the Musk Ox Caucus, a group that includes Reps. Louise Stutes of Kodiak and Paul Seaton of Homer, who landed himself the plum job of Finance co-chair.

One other Musk Ox was thinned out in the election when Republican George Rauscher knocked off Jim Colver to restore a conservative to District 9.

With her now-open purse, where she is gathering lobbyists’ money, LeDoux is becoming the new Bill Allen of Juneau.

Those with a Biblical frame of mind may recall the vivid New Testament story of how Jesus stormed the Temple of Jerusalem, violently overturning the moneylenders’ tables and shouting that they’d turned a place of worship into a “den of thieves.”

The Capitol may be no temple, but Rep. LeDoux, with her newly minted political action committee, “Gabby’s Tuesday PAC,” and Rep. Seaton, with his “Sustain Alaska” slush fund, have gotten the Den of Thieves part down pat.

Screen Shot 2017-01-16 at 4.26.01 PM — *Rep. Paul Seaton, who runs his own ‘Sustain Alaska’ slush fund.*

LeDoux is a sharp lawyer who found a money-laundering loophole in state campaign finance law. That loophole lets her collect money from lobbyists who have business with the Alaska Legislature, and give it to other legislators who will join with her and vote the way she wants them to.

She created her “Gabby’s Tuesday PAC” last July, purportedly to support “common sense conservative candidates.” She quickly collected $5,000 from lobbyists, then funneled the money to legislative candidates.

In a more genteel age, Gabrielle LeDoux might have been described as a Republican “of easy virtue.”

She was a Democrat when she ran and lost to Gary Stevens for Alaska State House in 2000.

She was a Democrat when she ran, won and served as Kodiak Island Borough mayor from 2001-04.

She was a Republican when she ran and won and served as a state representative from Kodiak from 2005-2009.

She ran and lost as a Republican against Rep. Don Young in 2007.

When she packed her carpet bag and moved to Muldoon in 2009, she was a Republican, first losing to Democrat Pete Peterson, then beating Democrat Kay Rollison.

Since she and other Musk Ox refused to consider using Permanent Fund earnings to help fill the state budget gap in 2015, she has been actively consorting with Democrats.

Shortly after Election Day 2016, her end game became clear: She abandoned her Republican colleagues and principles, and took two Republicans with her to join a caucus in return for the chairmanship of the powerful Rules Committee, with near-total control over what bills even make it to the House floor for a vote.

The combination of her PAC and her new legislative job make Gabrielle LeDoux like the mobster who visits a lobbyist’s office and says, “Nice little business you’ve got here. It’d be a real shame if anything should happen to it – like, for instance, if you weren’t able to get in to see legislators with the power to pass bills your clients want. Oh, incidentally, my Gabby’s Tuesday PAC is accepting contributions from lobbyists, especially smart lobbyists like you. The maximum annual contribution is $500. We’re holding a fundraiser next week. See you there?”

Alaskans generally don’t like “pay to play” politics, and thought they had made such legislative money laundering illegal.

Alaskans didn’t want lobbyists to be able to buy influence with legislators by making campaign contributions to legislators, in hopes of currying favor with clients paying tens and even hundreds of thousands of dollars a year to lobbyists.

Alaskans thought they had made it illegal for a legislator to demand that a lobbyist contribute to his or her campaign, as a condition of being able to ply their trade of seeking to inform or influence legislation in the interests of their clients.

Alaskans were wrong.

Even Democrats know this money-laundering loophole stinks. Back when Gabby was running for re-election as a Republican, the Alaska Democrat Party objected to her PAC plan in a complaint to the Alaska Public Offices Commission. Once Gabrielle traded sides, and APOC ruled Gabby’s PAC legal on a technicality, however, Democrats have not only forgiven her, but embraced her PAC tactics.

On Dec. 10, 2016, Gabrielle held a held a fundraiser to raise even more money for her money-laundering PAC, and to pay campaign debt for by Democrats Harriet Drummond, Dean Westlake and Zach Fansler.

They were joined by Rep. Paul Seaton of Homer, another Republican who won a plum job — as Finance Committee co-chair — after defecting to caucus with the Democrats. Seaton even followed LeDoux’s lead by forming his own money laundering PAC, the “Sustain Alaska Fund.”

Alaskans who supported a bipartisan House Coalition in hopes it would inspire a new bipartisan spirit of cooperation, bring an end to politics as usual, and maybe even, as the Democratic bumper sticker says, get “Big Money OUT of Alaska Politics,” should be concerned.

Some who they championed have made it their first order of business to turn the Alaska State Capitol into a marble money-laundering temple, and the Alaska House of Representatives into a house of ill repute.

Inauguration and other hot tickets

Suzanne Downing

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January 16, 2017

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ARE YOU GOING? GET IN TOUCH: Alaskans heading back to Washington, D.C. for the inauguration of President-elect Donald Trump will join hundreds of thousands of others from around the country — and for most of them, this will be their first presidential inauguration. There’s so much to know, the Metro doesn’t work as it should, and by now if they don’t have restaurant reservations they’ll be out of luck.

A few names of Alaskans we’ve heard who are heading to DC for the festivities include Alaska Republican Party Chairman Tuckerman and Kristie Babcock, ARP Treasurer Julie Tisdale, Past Chairman Randy and Gloria (Shriver) Ruedrich, Kathy and Fred Hosford, Randy Comer and his son Andy Comer, Kelly Cusack-Millen, Sharon Jackson, Misty Steed, Felice Schilling, Elisa Snelling, Erik and Angelina Burney, Tammi Lindsey George Lamoreaux and his daughter Ashley, Joe Mathis, National Committeeman for ARP Peter Goldberg, Marti Goldber, Donna McCarrey, National Committeewoman for ARP Cynthia and Ken Henry, Ryan McKee, Jeremy Price, Bob Gillam and a private jet full of people, Lesil McGuire, Patti McGuire, Mike Robbins, Jerry and Margaret Ward, George Owletuck and his daughter Fiona Owletuck, Drue Pearce, Cam and Michelle Toohey, Bill Armstrong, Jim Musselman, Andrew Guy, President/CEO Calista Corp., Sen. Charlie and Becky Huggins, John Moller, Trevor and Lisa Marie Shaw, Gov. Bill and Donna Walker, and a host of officials from the Walker Administration that include senior oil adviser John Hendrix, ~~presumably traveling on the state dime~~. Hendrix paid his own way and slept on a family sofa, sources tell us [updated 01.23.2017]. About 1,000 in all, so far as we know.

Alaskans attending the inaugural events are invited to send photos to [email protected] and we’ll post many of them here throughout the week.

Here’s a partial schedule of the official events that some Alaskans might witness if they can get to where they want to go on time:

Thursday, January 19

Wreath-Laying Ceremony
Arlington National Cemetery
When: morning
What: Trump and Vice President-elect Mike Pence honor the country’s military heroes at Arlington, Virginia.

Welcome Concert
Lincoln Memorial
When: TBA
What: The inaugural events officially start with this event, which will include a concert and appearances by Trump and Pence. The two public events are themed: “Voices of the People” and “Make America Great Again! Welcome Celebration.”

Voices of the People event includes the DC Fire Department Emerald Society Pipes and Drums, King’s Academy Honor Choir, the Republican Hindu Coalition, Montgomery Area High School Marching Band, Marlana Van Hoose, Maury NJROTC Color Guard, Pride of Madawaska, Webelos Troop 177, Northern Middle School Honors Choir, American Tap Company, South Park and District Pipe Band, Everett High School Viking Marching Band, TwirlTasTix Baton Twirling, and Celtic United Pipes and Drums.”

Make America Great Again! Welcome Celebration follows with President-elect Trump delivering remarks. Special guests include: “Toby Keith, Jon Voight, Jennifer Holliday, The Piano Guys, Lee Greenwood, RaviDrums, 3 Doors Down, and The Frontmen of Country.

Deploraball

The Deploraball will take place at 8 pm Thursday night, along with several other inauguration balls. This ball does not take itself seriously, has no dress code and is at the National Press Club. The 1,000 tickets for the fun event have already been sold. Special big-name attendees include Mike Cernovich, Jack Posobiec, Lauren Southern, Cassandra Fairbanks, Bill Mitchell, Stephen Limbaugh, Joe Biggs, Roger Stone, Jim Hoft, Lucian Wintrich, Gavin McInnis, and Scott Isbell. The event will be livestreamed on rsbn.tv.

They’re calling this a “big tent” event for Trump supporters. But there are likely to be a bunch of protestors there, too.

Alaska State Society Inaugural Reception.

Friday, January 20

Inaugural Swearing-In Ceremony
West Front of the U.S. Capitol Building
When: Ceremony begins at 9:30 a.m.; opening remarks at 11:30 a.m.; swearing in at noon by Supreme Court Chief Justice John Roberts Jr. Security opens up the stand-only and seating areas at 6 a.m. Wear warm clothes.
What: Trump and Pence families will attend, as will members of Congress, the U.S. Supreme Court, and other guests. Several Democratic members of Congress are boycotting, so there may be seating that opens up. Notables who will attend include Bill and Hillary Clinton, George W. and Laura Bush, and Jimmy Carter. George HW Bush cannot attend due to his fragile health.

Six faith leaders have been chosen to participate: His Eminence Timothy Michael Cardinal Dolan, the Archbishop of New York, Reverend Dr. Samuel Rodriguez of the National Hispanic Christian Leadership Conference, Pastor Paula White of New Destiny Christian Center, Rabbi Marvin Hier, Dean and Founder of the Simon Wiesenthal Center, Reverend Franklin Graham of Samaritan’s Purse and The Billy Graham Evangelistic Association, and Bishop Wayne T. Jackson of Great Faith Ministries International will offer readings and give the benediction.

Supreme Court of the United States Clarence Thomas will administer the Oath of Office to Vice President-elect Michael Pence. Chief Justice John Roberts will administer the Oath of Office to President-elect Donald Trump.

The Mormon Tabernacle Choir and America’s Got Talent star Jackie Evancho will perform.

Inaugural Parade
Starts at the steps of the Capitol Building and proceeds along Pennsylvania Avenue to the White House.
When: After the inauguration ends
What: Trump, Pence and their families will be escorted down Pennsylvania Avenue, followed by a parade. Viewing areas require tickets. The Talladega College Marching Band and the Rockettes are slated to perform.

Parade participants include:

1st Cavalry Division Horse Cavalry Detachment – Fort Hood, Texas
1st Infantry Division Commanding General’s Mounted Color Guard – Fort Riley, Kansas
Boone County Elite 4-H Equestrian Drill Team – Burlington, Kentucky
Caisson Platoon, Fort Myer – Fort Myer, Virginia
Cleveland Police Mounted Unit – Cleveland, Ohio
Coastal Florida Police & Fire Pipes & Drums – Palm Coast, Florida
Columbus North High School Band – Columbus, Indiana
Culver Academies Black Horse Troop & Equestriennes – Culver, Indiana
First Troop Philadelphia City Cavalry – Philadelphia, Pennsylvania
Fishburne Military School Army JROTC Caissons Battalion – Waynesboro, Virginia
Frankfort High School Band – Ridgeley, West Virginia
Franklin Regional High School Panther Marching Band – Murrysville, Pennsylvania
Indianapolis Metro Police Motorcycle Drill Team – Indianapolis, Indiana
Lil Wranglers – College Station, Texas
Marist College Band – Poughkeepsie, New York
Merced County Sheriff’s Posse – Hilmar, California
Michigan Multi-Jurisdictional Mounted Police Drill Team & Color Guard – Ann Arbor, Michigan
Mid America Cowgirls Rodeo Drill Team – New Buffalo, Michigan
Nassau County Firefighters Pipes & Drums – East Meadow, New York
North Carolina Vietnam Helicopter Pilots Association – Hillsborough, North Carolina
NYPD Emerald Society Pipes & Drums – East Moriches, New York
Olivet Nazarene University – Bourbonnais, Illinois
Palmetto Ridge High School Band – Naples, Florida
Russellville High School Band – Russellville, Arkansas
Talladega College Band – Talladega, Alabama
Texas State University Strutters – San Marcos, Texas
The Citadel Regimental Band & Pipes and Summerall Guards – Charleston, South Carolina
The Freedom Riders – Kersey, Colorado
Tupelo High School Band – Tupelo, Mississippi
University of Tennessee Marching Band – Knoxville, Tennessee
VMI Corps of Cadets – Lexington, Virginia
West Monroe High School Marching Band – West Monroe, Louisiana

American Veterans – National
Boy Scouts of America – National
US Customs and Border Protection Office of Field Operations – National
Disabled American Veterans – National
Paralyzed American Veterans – National
Tragedy Assistance Program for Survivors– National
US Border Patrol Pipes & Drums – National
Wounded Warrior Project – National
Military & DoD Kids Overseas– U.S. Naval Air Station Sigonella, Italy

Many streets will be closed. Visit the official website and Twitter account for more information. The officially determined social media hashtag is #Inaug2017.

Parade route.

The Official Inaugural Balls
Walter E. Washington Convention Center and National Building Museum
When: Friday night
What: Two official inaugural balls are in the works featuring entertainment and appearances by Donald and Melania Trump.

Inaugural Balls

Numerous unofficial balls will also take place, including: Alaska Inaugural Ball, Native American Ball, More details on Alaska-oriented events here.

Gillam comes to defense of small businesses in Alaska

Suzanne Downing

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January 15, 2017

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OPPOSES INCOME TAX: Robert Gillam doesn’t exactly know where an income tax proposal might come from during the 30th Alaska Legislature, which convenes this week in Juneau.

But he figures one is going to materialize in the next 90 days. To be on the safe side, he’s not taking chances.

Come Tuesday, while legislators in the House and Senate get busy in their committees, Alaskans will see large ads appear in most of the major newspapers in Alaska — Juneau, Kenai, Anchorage, and Fairbanks.

Bob Gillam’s name will be on the “paid for” line at the bottom of them. The ads will, in no uncertain terms, oppose a state income tax.

The print advertising, social media posts, and radio spots to follow are Gillam’s next contribution to the discussion about how to fix Alaska’s state budget problem.

In his view, piling more taxes onto small business owners is going to hurt the economy of Alaska. Right now, when the economy is on its knees, is not the time to soak mom and pops.

Last year, Gov. Bill Walker introduced a host of taxes, including a state income tax. This year, the governor has removed himself from that fiscal fiasco, and is only introducing a motor fuel tax. He may work through friendly surrogates in the Alaska House to get a tax plan in place.

Gillam is ready. He’s run successful campaigns before. He helped derail the Pebble mining project back in 2008 by going big and bold on messaging about Bristol Bay, and now he’s girded for battle on income taxes, which he says will do nothing but hurt working Alaskans.

Does he, as the richest man in Alaska, have a dog in the fight? Not as much as one might think on a personal level. People with the investment savvy of Gillam, who has $7 billion in assets under management, including a portion of the Alaska Permanent Fund, can find workarounds for their federal tax bills, which is what the state income tax bill would be calculated from.

The real people hurt by a state income tax are those who don’t have the means to work all the tax advantages provided by the Internal Revenue Service to the high-dollar taxpayers. Gillam knows that.

Sitting down with Gillam for an hour last week, we heard about what the investment expert is thinking on the topic: It’s all about small businesses in Alaska.

The man who founded McKinley Capital in Anchorage deals with a lot of big businesses in his daily duties as a money manager.

But to hear him talk, his heart is with the start-ups, the entrepreneurs who risk everything to create an enterprise, whether it’s an auto detailing shop or a hair salon. He pulled out reams of reports from the likes of the Brookings Institute and American Legislative Exchange Council to show how state income taxes drag down economies.

Gillam asked the rhetorical question: “If a small business owner does well and can support himself or herself and then has some profits left over, what happens next?”

“The business owner expands. Buys new equipment. Opens a new outlet across town,” Gillam answered.

“The small business community nationwide and in Alaska is your job generator,” he said. “Everyone thinks it’s ConocoPhillips and BP, but there are more jobs in small business environments than in the oil companies combined. The last thing you want to do is to impair your job generators.”

That was also the message he gave to about 80 Alaskans who attended an intimate inaugural party in Anchorage on Jan. 7: Pay attention to what is going on in Juneau. Make sure lawmakers don’t tax average Alaskans.

There are 17,000 small businesses in Alaska, which Gillam defines as a business with between two and 200 employees. They already struggle under the burden of federal taxes, including the 21 taxes under Obamacare, some of which will hit small business owners this year for the first time.

“When a person goes into business, they look at risk and reward. The truth is that at $250,000, filing jointly, the married tax bracket is now 44.25 percent. Under President Bush it was 30 percent,” Gillam said. The risk-reward went negative.

Obamacare is clearly another thing that Gillam thinks is hurting not only small business owners, but the nation as a whole.

“They have 21 separate taxes in the Affordable Care Act,” he said. “It’s no wonder that gross domestic product growth under Obama has been, at times, less than 1 percent.”

*Governor Bill Walker is pushing his State of the State address on Facebook, purchasing views through promoted posts.*

WILL WALKER PUSH INCOME, SALES TAXES THIS YEAR?

Gov. Bill Walker ran for office on the promise he would not tax Alaskans. On Oct. 11, 2014 he said, “I have no intention to implement a statewide tax or paying for state government by reducing Permanent Fund dividend checks. If we properly develop our natural resources and put in place a sustainable budget, that should not be necessary.”

By 2016, Walker was reaching deep into to the pockets of Alaskans, with proposed taxes on income, sales, fish, mining, oil, motor fuel, and cruise ship passengers. He eviscerated tax credits to the small oil companies that came to Alaska to explore because of them.

By July, the only tax he could manage to get was a 50+ percent tax on every Alaskan’s Permanent Fund dividend. He just delivered that tax by way of a veto, knowing the Legislature was too dog-tired to fight him any longer.

It did not work out so well for Walker. Stung by the public’s disapproval, the governor is now letting others take the lead, such as Homer Rep. Paul Seaton, who is now co-chair of House Finance, and Rep. Les Gara, who is vice chair and is taking over for Rep. Neal Foster, who has the title of co-chair, but who has moved to the Fourth Floor to continue the Friday traditions of his father, the late Rep. Richard Foster.

Seaton in 2015 proposed a bill to take 15 percent of taxpayers’ income as defined by federal tax law. The bill was cosponsored by incoming Speaker Bryce Edgmon. The tax would also have applied to income earned from property in Alaska, investments, trust funds, and other royalties. Gara has been a diehard proponent of corporate taxes and more levies on oil.

As the battle begins in Juneau between the “spend less” and “spend more” factions, Alaska’s economy continues to falter.

But Robert Gillam is not standing by idle. He’ll be deeply involved. And look for the advertising departments of Alaska’s various newspapers to be deeply appreciative that he is.

One acre is newest reservation in Alaska

Suzanne Downing

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January 15, 2017

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One acre is newest reservation in Alaska

CRAIG TRIBAL ASSOCIATION — Craig Tribal Association community center (Tribal photo)

On Friday, Jan. 13, a small parcel of land in Craig, Alaska became the latest Native American reservation: One acre of Indian Country.

It is the first Alaska land to be placed into “federal trust” by the Department of Interior under a July, 2016 court ruling that Gov. Bill Walker refused to challenge (read his explanation below).

Such a demure dipping of Alaska’s toe into the waters of Indian Country was likely a move calculated to diminish the importance of such an event. After all, it’s only one acre.

Walker this week issued no statement congratulating the tribe for its new federal co-ownership of its land, nor was there any public gesture from the tribe itself thanking Walker for backing away from the Akiachak Native Community v. U.S. Secretary of the Interior ruling, which went against the State’s clear interest in preserving its sovereignty.

By allowing the lower court ruling to stand without a fight, Walker can take credit for ushering Indian Country into Alaska. His silence is mystifying, since it’s one of his few accomplishments, other than Obamacare Medicaid expansion.

Land trusts create tribal ownership partnerships with the federal government, and cuts the state from being at the table on any decision. Tribes can tap more federal funds this way, which some conservatives say grows dependency on government. Reservation lands also further Balkanize Americans, the argument goes, because it’s not a unifying direction for states to go in.

The new acre-sized reservation already houses the Craig Tribal Association offices, meeting hall, space rented from the Tribe by the Alaska Court System, and a parking lot. The association acquired the the parcel in 1996 and built a community hall. The development is not yet eligible for a gambling casino, although that could materialize eventually. The tribe has talked openly about a future with gambling.

IN THE WAYBACK MACHINE: The matter goes back to federal legislation that helped build the Trans Alaska Pipeline, which needed to cross Native lands. Congress passed the Alaska Native Claims Settlement Act (ANCSA) in 1971, settling all land claims by Alaska Natives “rapidly, with certainty [and] without creating a reservation system or lengthy wardship or trusteeship.”

Congress returned 44 million acres of land to newly created Alaska Native corporations and paid Alaska Natives $962.5 million. It was to be a new model that would avoid the problems with reservations that have become centers of the worst sort of poverty and criminal activity in America today.

The Secretary of the Interior set forth by regulation in 1980 that the “Alaska exception,” excludes federal trust authority for acquiring Native land in Alaska. The Alaska exception has now been overturned by the Obama Administration, which is calling the exception an unfortunate “error.”

BIA IS HAPPY TO HELP: Principal Deputy Assistant Secretary for Indian Affairs Lawrence S. Roberts, announced the Craig reservation decision through a press release:

“The journey to this decision has been a long one. Today, the federally recognized tribes in Alaska have the same opportunity as those in the Lower 48 states to maintain a permanent homeland for themselves,” Roberts said.

“The decision to place the Craig Tribal Association’s land into trust reflects the policies of tribal self-determination and self-governance through the restoration of tribal homelands that will benefit its current and future generations of tribal members. I congratulate the Craig Tribal Association leadership on their achievement. I also commend the State of Alaska and the City of Craig for their comments on the land-into-trust application. Their approach, much like other state and local governments, is another important example of tribes, states and local governments working together in a government-to-government relationship to address concerns so that they may better serves their collective communities.”

Bureau of Indian Affairs Director Bruce Loudermilk said, “I want to thank the Office of Trust Services staff in the BIA’s Alaska Regional Office and the staff across the Department for their hard work on this complex matter. I also want to add my congratulations to the Craig Tribal Association leaders on the restoration of a small part of their homeland.”

Lands held in federal reservation status cannot be sold or transferred to non-Indians or non-Natives. They are exempt from state and local taxes, but the tribe does not pay those now, so there is no material change.

According to the Department of Interior, the State of Alaska is still responsible for law enforcement on the property in the heart of Craig, which is the largest town on Prince of Wales Island, about 56 miles by air from Ketchikan. About 1,200 people live in Craig.

The Obama Administration has had an aggressive schedule to create more reservations. Secretary of Interior Sally Jewell set the goal of a half-million acres of land to be designated in the land-into-trust status before Obama leaves office this week.

The Administration has exceeded that goal by processing more than 2,265 trust applications and setting aside nearly 571,000 acres as reservation property since 2009.

“The finalization of the tribal land-into-trust application is very good news for Alaska tribes,” said Brian Cladoosby, NCAI President, on the organization’s web site. “Land into trust will enable Alaska tribal governments to protect lands for future generations and to better exercise governmental authority for the protection of their citizens.”

“When tribal governments set their own policies and enforce the laws in their own communities, then they can take care of law enforcement, improve their economy, and help to build productive communities,” said Cladoosby, evidently unaware that the one acre that houses a building is not a law-enforcement issue in Alaska and that the City of Craig and State Public Safety Department will still provide law enforcement.

Other reservations in Alaska predate the 1980 ANILCA decision. Metlakatla on Annette Island), Klawock, and Kake tribes have grandfathered-in reservation status.

WALKER SUPPORTS NATIVE RESERVATIONS: On Aug 29, 2016, Gov. Bill Walker and Lt. Gov. Byron Mallott published this explanation of their actions in the Juneau Empire:

Since we came into office, the topic of tribes placing lands into trust in Alaska has engendered some of the most passionate comments and concerns we have heard on the many sides of this issue.

Many believe that this action will further empower tribes to become more self-sufficient while improving the quality of life throughout rural Alaska — a goal we all share. Those with strong state’s rights convictions are concerned that it may weaken state authority and make an already overly complicated fish and game management system more difficult and impact the constitutional requirement of sustained yield. The reality is that, as of Aug. 22, the federal government can take lands into trust in our state under a 2014 adopted federal regulation. We recognize the validity of many of the concerns we have heard. But instead of litigating a resolution in court that no one may be satisfied with, we think it is time to forge a new path forward of dialogue and collaboration to see if we can achieve a resolution that’s in the best interests of all Alaskans.

We have an opportunity as we embark into this new reality to help shape the outcome so that it works best for our state. Alaska is unique, and just like so many other areas, the way trust lands may occur in our state is unique. There is no reason to assume that Indian country here will be the same as Indian reservations in other places. We believe that we can work together to address people’s concerns and shape solutions that improve public safety, empower local communities and protect our resources.

The current reality is that rural Alaska experiences the highest unemployment in the nation, very high rates of domestic violence, and drug and alcohol abuse and some of the lowest graduation rates in the country. The current reality in rural Alaska is an utter failure rivaling some of the worst conditions found on reservations throughout the country. We must consider other options that seek partnerships to make Alaska better instead of the decades-old practice of perpetual lawsuits that have not made Alaska better.

After the decision came out ending the lawsuit, some have said that we are not recognizing the many concerns that our administration raised in the litigation regarding Indian country and reservations: quite the opposite. We acknowledge the concerns that have previously been mentioned — such as ensuring the state’s role in resource development and game management — and there will likely be additional concerns raised. But the question is how best to have those concerns addressed: Will continued litigation get us to a solution? Or should we try to see if we can resolve concerns through proactive outreach and negotiation?

We believe Indian country in Alaska should look different than the typical Indian reservations we all know in the Lower 48. Being an active participant in the way lands into trust is implemented in our state will hopefully bring us to a better solution. We are not sitting back and letting something happen — we are going full steam ahead on engaging with tribes, the federal government and others to ensure all concerns are addressed.

The alternative that some support is continuing to pursue dead-end litigation that simply divides our state further. Litigation is win or lose, all or nothing. Litigation does not allow us to be at the table. The state lost its appeal in Akiachak Native Community v. U.S. Secretary of the Interior on procedural grounds. Therefore, it is as if that lawsuit never happened, including the original ruling against the state. That leaves us with no binding legal precedent.

As Attorney General Jahna Lindemuth stated, litigation remains an option but a court challenge is a blunt instrument that is not well designed to address such a complex issue, let alone one critical to the future of this state. If necessary, further litigation remains an option, but let’s try sitting down and talking to each other here in Alaska rather than doing so in a courtroom in Washington, D.C.

The end of this litigation provides some breathing room for all Alaskans to sit down and see if everyone’s concerns can be addressed outside the courtroom. We view this as a blank slate to craft a new set of rules. We have tasked Attorney General Lindemuth with reaching out to the Bureau of Indian Affairs, tribes, other Native interests and organizations, commercial interests doing business in Alaska, local governments, and other interested stakeholders to find out where there is common ground and where there is disagreement. Hopefully, we can reach consensus on the major issues and gain a better understanding of what lands into trust will mean for Alaska. We will work collaboratively on new regulations that will take into consideration the uniqueness of Alaska and Alaskans.

We envision a path forward where Alaska as a whole engages on the issue and decides what is best for the future of all Alaskans. We did not “give up” nor are we sitting on our hands, responding to one trust application at a time. Rather, this administration is engaging in active diplomacy on this critically important issue. In the end, the onus is on the federal government and all of us collectively to make sure the state’s concerns are addressed and that we have engaged in a meaningful process before any application is granted. We expect the federal government to uphold its end of the bargain and believe that reaching out early to start the discussion will help lead to a smooth transition.

Having the federal government take lands into trust will be one tool in the belt to help address rural justice issues and improve government relations with tribes. There are other innovative solutions that we should continue to explore, including diverting certain matters to tribal courts, continuing to streamline the child-in-need-of-aid process, and figuring out how to expand our law enforcement presence in spite of dwindling state resources. We are not a one size fits all state, and we need solutions that address the unique circumstances of each tribe and each local community. It’s time to think outside the box, and we encourage you to send your thoughts and comments to our office or to Attorney General Lindemuth as we forge this new path.

Spending cap petition runs into tax-and-spend litigants

Suzanne Downing

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January 14, 2017

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“The natural progress of things is for liberty to yeild [sic], and government to gain ground.”

We might quibble with Thomas Jefferson on the spelling of “yield, “but his statement is spot on.

Or, you can go with this more contemporary thought:

“A good community isn’t free.”

Those are the words of Anchorage Mayor Ethan Berkowitz, who was trying to convince voters not to pass a property tax limit in 2016.

Voters didn’t buy what Berkowitz was selling.

That battle between liberty and government is heating up again in the municipality of Anchorage as voters turn their attention to the April 4 municipal election.

The Anchorage spending cap that is now in the petition stage seems destined for a win, after 60 percent of voters favored Proposition 8, the 2016 ballot measure that enforced a tax cap on the Assembly after the liberal majority decided to raise taxes.

But now a lawsuit by tax-and-spend liberals has been filed to prevent voters from actually setting a spending limit on their own municipal government.

The three litigants who are the plaintiffs are trying to deep-six a spending cap petition being circulated by activists with the organizational guidance of Americans for Prosperity-Alaska.

Bob Griffin, who serves on the Anchorage Budget Advisory Commission, and Terre Gales, who ran last year for Anchorage Assembly, are among those (including former Mayor Dan Sullivan) trying to get the spending limit on the municipal ballot.

The lawsuit alleges the city municipal clerk and deputy clerk did not follow correct procedures in approving the proposed ballot initiative to continue to the signature-gathering stage. The lawsuit further states that citizens cannot limit appropriating powers of the Assembly through ballot initiatives.

Voters might think it’s not necessary to have a spending cap since they passed a tax cap last year. They’d be mistaken.

Anchorage law limits what the Assembly can appropriate with a formula that factors in things like population and inflation. But a loophole also allows for increases to provide services deemed necessary. It’s a big loophole.

In October, the liberal-dominated Assembly suspended the existing spending cap law, which led to the current petition.

Jeremy Price, state director for Americans for Prosperity – Alaska, said the attempt to silence the will of the people won’t succeed. “We won’t be silenced. I’d encourage everyone to go sign the petition if you want government to stay accountable and stop out-of-control spending,” he said.

Price and his group were successful in getting voters to agree to the tax cap last year, in spite of heavy opposition by public employee unions and Mayor Ethan Berkowitz.

The tax cap requires that the municipality uses the actual amount of tax collected in a one year as the starting point for the next year’s tax cap calculation, instead of the maximum amount of tax the city could collect.

Under the current scenario, with dropping home valuations and lagging assessments, this is a very big matter of concern to homeowners.

The current petition would place the Anchorage spending cap in the city charter so elected officials would no longer be able to ignore it or interpret it so loosely they could spend all the public funds they like for all they deem “necessary.”

You can sign the petition at these locations:

Midtown: Gunrunners – 601 E Northern Lights Blvd # D
East Anchorage: 907 Surplus – 328 Boniface Pkwy
Eagle River: Mike’s Quality Meats – 12110 Business Blvd; Boondock Sporting Goods – 17007 N Eagle River Loop Road

Thank God for the babies, Alaska

Suzanne Downing

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January 13, 2017

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BABY IT’S OLD OUT THERE: Bring on the babies. If not for them, Alaska would be losing population. We’re getting older as a population, and our workforce is heading for the exits.

We can see the trouble brought on by a decline in population in any given province around the globe: Germany, Russia, or even Japan, which is losing population at an alarming rate. They just don’t have enough babies to replace all the old people and there’s this thing called sekkusu shinai shokogun, or “celibacy syndrome,” which has seemed to afflict many under 40.

We want none of that (we think) for Alaska Millennials.

Across Europe, low birth rates have caused countries to open the floodgates to immigrants from Islamic cultures, causing a heavy dose of friction between traditional Lutherans, Catholics, pagans, and atheists, and the dissimilar ways of the Muslim moving in next door.

HOLDING PATTERN: According to the Alaska Department of Labor and Workforce Development, Alaska grew by just 2,645 people last year: That’s one-third of one percent. Or, as non-demographers might characterize it: Flat as a flounder.

During the past year, some 7,000 more people were born than died in Alaska, and that balanced the loss of those who moved south.

The reality is that working adults left the state in droves. About 6,800 Alaskans moved south, but thanks to babies, we are still a net gain. This year, we’re going to lose a lot more people — 7,500 jobs will disappear in 2017, the Labor Department tells us. Those families will likely move and the state will enter a net-loss condition.

Keep in mind, demographers work with rather old data. It is the nature of the discipline. After Labor revises its jobs numbers for the year, the picture could change. It may look rather different in the final analysis.

MIGHTY, FERTILE MAT-SU VALLEY: Alaskans owe a debt of gratitude to the Matanuska-Susitna Borough for stepping up on the population front, adding, almost remarkably, 2,069 people last year. That means other places are losing big time.

Juneau, for example, is underperforming in the birth-to-death ratio. For the past two years, Juneau has birthed about 400 babies per year, whereas 30 years ago, with a smaller population, there were 600 babies born per year.

So when we say the loss of population in Juneau was 400 in 2016, it means that for every baby born, two people either moved away or died.

Overall, according to the state number crunchers, all six of the state’s economic regions showed losses through net migration, which is the difference between people coming in and those going out.

The only thing saving us is the babies.

Of course, nothing compares to the 35,000 net out-migration from Alaska between 1986-1988 in what was a reverse stampede at the time.

Thank goodness for the babies. Alaska has relied on zygots for population growth for the better part of 25 years.

Alaska is a relatively bright spot in population. There are several states that are actually as flat or shrinking, including:

New Mexico (0.03%)
Kansas (0.02%)
New York (-0.01%)
Mississippi (-0.02%)
Pennsylvania (-0.06%)
Wyoming (-0.18%)
Connecticut (-0.23%)
Vermont (-0.24%)
Illinois (-0.29%)
West Virginia (-0.54%)

MILLENNIALS, YOU HAVE A JOB TO DO: Today we stand at 739,828 strong, to be exact. We’re not getting any younger as a state, inching up from an average age of 33.8 in 2010 to 34.7 last year.

And since out-migration is exceeding in-migration, we’re going to be counting on those 20- and 30-somethings to do what they do best — provide the state with a few more young’uns.

And hurry up, Millennials, before your precious Millennial clock leaves us in a demographic downdraft.

(Complete estimates for population are found at http://live.laborstats.alaska.gov/pop.)

Book review: Memory and Revolution

Suzanne Downing

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January 12, 2017

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The Shoemaker and the Tea Party: Memory and the American Revolution, by Alfred Young. Beacon Press

How did a revolution take hold among ordinary colonists who didn’t give a pinch of snuff about a tax on tea?

On Dec. 16, 1773, 150 colony men dressed as Native Americans boarded ships docked at Boston’s Griffin Wharf. They broke apart the containers of tea and threw everything into the Boston Harbor as a protest against unfair taxes. A legend was born: The Boston Tea Party.

The memories of a poor shoemaker during the American Revolution shed light on how the political revolt took hold with the “middling” class, as seen through the eyes of the common man.

The shoemaker, George Robert Twelves Hewes, delivered a pair of shoes to John Hancock and he did so with great deference. But a few years later, on a ship in the Boston Harbor, Hewes refuses to take his hat off in deference to the captain.

Much had changed pre-Revolution to post-Revolution, and obsequious deference to upper classes and officers fell out of favor quickly.

The book is delivered in two parts: One recalling apprentice shoemaker’s unlikely witnessing of so many important turning points in the American Revolution, and one dissecting the historical memory of events as later created by historians who embroidered a collective history we pass along even today.

These two parts weave an important lesson for us as we read history with a critical eye. As Hewes aged, he became somewhat of a celebrity for his role in the Revolution and was feted as a national hero.

Author Afred Young, who died in 2012, wrote extensively about artisans and working class people who lived during colonial times. He authored 16 books, including one about a young woman who fought as a man during the Revolutionary War: Masquerade: The Life and Times of Deborah Sampson, Continental Soldier.

In Shoemaker, He uses the memories and the legend of one ordinary man as a way to explore how history is told, passed down, and how it changes in the popular lore of a nation.

Day One: Third floor marimbas, speech prep, happy birthdays

Will ConocoPhillips be allowed to produce at Willow? State decisions factor in

Which fundraiser will Gabby go to?

Inauguration and other hot tickets

Thursday, January 19

Friday, January 20

Gillam comes to defense of small businesses in Alaska

One acre is newest reservation in Alaska

Spending cap petition runs into tax-and-spend litigants

Thank God for the babies, Alaska

Book review: Memory and Revolution

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