Anchorage ambulance races through Spenard. (YouTube screen shot. Alex Alverson video)
IF YOU DON’T CARE ABOUT INCREASING THE TAX CAP, DON’T VOTE
If you’re in Anchorage, by all means don’t bother to vote today. Your taxes will likely go up by the ballot marks of others.
An example of what might pass if you skip out on your civic duty is a $23 million property tax increase disguised as a $650,000 purchase of two ambulances.
Proposition 2, the ambulance bond, is possibly the sneakiest bond proposition in Anchorage history.
Prop 2 starts out innocently enough, but is asking voters to pay for a lot of things they can’t really see in the ballot language or anywhere else on the Anchorage municipality’s new web site.
Voters believe they are funding two ambulances for $650,000. There are some vaguely referenced transit vehicles (these may be buses, but we aren’t told) for a total cost of $1.65 in the principal amount of general obligation bonds.
But the real cost is $24 million.
Without knowing it, voters choosing yes on Prop. 2 will be increasing the tax cap, because by approving the capital expenditures, they’ll also be approving the operating expenses with them: 14 firefighter positions for the next 10 years.
That’s 14 union firefighter positions.
“This is a sneaky deal — adding staff to a bond,” said Assembly member Amy Demboski. “I voted no on this in the Assembly for even putting it on the ballot because it’s my pet peeve: You don’t add staff to a bond.”
Demboski isn’t the only one. While she is particularly concerned for those living outside the center of Anchorage who will get no benefit from the bond, others have voiced concerns as well.
Former Mayors Rick Mystrom, George Wuerch, Tom Fink and Dan Sullivan all oppose Proposition 2.
In a radio ad airing in recent days, Mystrom says:
“This bond issue avoids the tax cap by lumping massive labor costs into a small bond proposal. The Prop 2 proposal looks pretty innocent: $650,00 for two ambulances. But 10 years later, the taxpayers will have paid almost $24 million in property taxes for this deceptively small bond proposal,” Mystrom said. “This tactic bypasses the tax cap and squeezes millions of new taxes from homeowners.”
WHO’S VOTING?
The line to vote at the Loussac Library in Anchorage at 9 am today was noteworthy in one particular way: There was no line. In a span of 10 minutes, only one person cast a ballot. The 10 election workers were falling all over themselves to help the one voter at the door.
But Anchorage residents can be certain that both municipal and school employees will be out in force at the polls, voting to raise taxes on residents and bust through the tax cap.
Must Read Alaska is taking a break this morning to send out thank you notes to all of our first-quarter supporters. But don’t forget, we have a Monday morning e-newsletter, and you should subscribe!
Here’s an outtake of what’s in today’s Must Read Alaska Monday newsletter. Go ahead — go to the right side of this page and sign up for the best way to kickstart your week. It’s free. (Meanwhile…feel free to support this conservative spot for news with a contribution, because we’d like to thank you, too.)
GOOD MORNING from somewhere in Alaska … It’s Monday, April 3, 2017…Two weeks left in the 90-day legislative session, which ends on Easter…Will it be resurrected into special session? (When was the last time the Alaska Legislature didn’t have a special session?) … Most MRAK readers are conservative Alaskans, but all are welcome…Share this newsletter with your open-minded friends…But first…
THIS WEEK IN SUPREMES: This week, Neil Gorsuch will likely be confirmed to the U.S. Supreme Court, which has had a vacancy for 13 months, since Antonin Scalia died. We predict drama prior to confirmation. Democrats will filibuster. Republicans will tire of it, change the rules, and vote. And we will have to fix our spell checks so that Gorsuch doesn’t auto-correct to “Grouch.” #annoying.
THIS WEEK IN JUNEAU:
House Finance takes up Governor Bill Walker’s income tax bill, HB 115, today (Monday) at 1 pm.
Senate Resources takes up the Jonesville Public Use Area bill, SB 65, today at 3:30 pm
House Finance takes up Governor Bill Walker’s motor fuel tax, HB 60, Wednesday, 1:30 pm
THIS WEEK IN OIL COMPANIES: They’re considering it a win if they break even, according to this analysis in the Wall Street Journal.
Cliff notes: Despite billions of dollars in spending cuts and a modest oil-price rebound, Exxon Mobil, Shell, Chevron and BP didn’t make enough money in 2016 to cover their costs, according to the Journal.
ANCHORAGE MUNI ELECTION TUESDAY: It’s math. If everyone of the thousands of Anchorage residents who read this newsletter take the time to vote on Tuesday, we’ll have a moderate-conservative Assembly in Alaska’s biggest little town.
MUST READ ALASKA’S ANCHORAGE MUNI BALLOT:
ASSEMBLY
District 1 – Seat B – Downtown COX, Chris
District 2 – Seat C – Eagle River / Chugiak BRASSELL, John (up and comer) or
DYSON, Fred (older warrior)
District 3 – Seat E – West Anchorage NEES, David
District 4 – Seat G – Midtown Anchorage SANDERS, Marcus or
SMITH, Don
District 5 – Seat I – East Anchorage JONES, Don
District 6 – Seat K – South Anchorage FOGLE, Albert
SCHOOL BOARD
Voted on areawide by all in the Municipality of Anchorage:
School Board Seat C DONLEY, Dave
School Board Seat D SCHUSTER, Kay
PROPOSITIONS
YES – PROPOSITION 1 – SCHOOL BONDS, It’s not perfect, but the projects are mostly needed repairs that won’t get any less expensive with further delay. NO – PROPOSITION 2 – AMBULANCES AND LABOR, Borrowing to pay for 14 new firefighter positions? Just no. NO – PROPOSITION 3 – PARKS AND REC, Nice projects have to wait in this economy. YES – PROPOSITION 4 – STORM DRAINAGE, Infrastructure. NO – PROPOSITION 5 – FIRE TRUCKS AND STATIONS, It can wait. NO – PROPOSITION 6 – POLICE FACILITY UPGRADES, See above. NO – PROPOSITION 7 – PARKS AND REC TAX AREA EXPANSION, The Muni looking for more folks to tax. NO – PROPOSITION 8 – REPEALING TAXI CAB EXPANSION, See below:
THE MESSIEST PROPOSITION AWARD: Prop. 8 wins the prize for the most confusing proposition to ever hit a ballot in Anchorage. Taxi permit holders in Anchorage don’t want more cabs on the street. That’s why they want you to vote yes on Proposition 8.
A yes vote repeals the ordinance that is phasing in more cabs. With the taxi cab union out in force with flyers, chances are the public will vote yes.
A no vote continues opening up the taxi permits. Cabs would arrive on time because more would be available. More available cabs result in safer roads and happier customers.
(It almost doesn’t matter what the taxi permit holders want, because the world has moved on. Uber, Lyft and Zipcar are modeling the next generation of personal transportation in 49 other states. A bipartisan group of legislators in Juneau may make us the 50th.)
FACE-PALM DEPT: Can you believe it? Fully 20 percent of 18- to 34-year-olds identify as Lesbian, Gay, Bisexual or the rest of the LGBTQ definitions, according to a Harris Poll done for the LGBTQ advocacy group GLAAD. It’s either the hippest new thing for millennials to say out loud, or it’s in the water. Read the survey here.
In other news, Sen. Berta Gardner, D-Anchorage, decided it was time for more LGBTQ legislation, because it’s always time to have more hearings in Juneau.
Berta gives you Senate Bill 72, prohibiting discrimination based on sexual orientation or gender identity or expression — and beefing up the workload of the State Commission for Human Rights. Bring on the lawsuits.
MORE FACE-PALM: Rep. Jonathan Kriess-Tompkins has legislation to tax opioids. Which means he wants people who are taking medicine for chronic pain to pay more for that medicine. House Bill 196 creates a 1-cent tax on imports or manufacture of each milligram of morphine equivalent. Who actually pays for an opioid tax?
WE’RE HAPPY, RIGHT? Alaska is the second-happiest state in the U.S., right after Hawaii. That’s because we live in this big-and-awesome state most of the time, and vacation in hot-and-heavenly Hawaii? That’s our theory and we’re really happy about it. Read the Gallup poll here.
SMITHSONIAN MAGAZINE, FASCINATED BY WHITTIER: But who isn’t? The Lives in Begich Tower is our Alaska voyeurism read of the week.
BLACK PIGMENT MATTERS: Vantablack is the world’s darkest black pigment, so dark that it flattens reality and swallows lasers. One British artist has a lock on the Vantablack market, and that has ticked off the other artists who now ban him from using the world’s pinkest pink. That’s our arts and science read of the week.
LOOKING FOR CHANGE IN THE SOFA: On tonight’s Ketchikan Gateway Borough Assembly agenda is the question of whether to eliminate the senior sales tax exemption for the purchase of alcohol, tobacco, and marijuana.
The borough staff believes it can pull in about $25,000 in sales taxes with the measure. The meeting begins at 5:30 pm in Borough Assembly Chambers, White Cliff Building.
WRANGELL POT TAX: The Wrangell Borough Assembly is getting ready to curb the business hours of marijuana stores, so no pot can change hands between 6 pm and 8 am. Also, they’ll be instituting a $10 tax on every ounce of cultivated pot that is sold. That would be on top of the $50 per ounce the state already charges in taxes. The money raised would go to the city’s general fund.
Larri Fancher, Larry Zuccaro, and Mike Fell of Homer, Alaska file a recall petition with City Clerk Jo Johnson on Friday.
A group of Homer residents has filed a petition with the city clerk containing more than 460 names of residents who signed a request to recall three Homer City Council members.
The filing is one more step in what may be one of the largest local recall efforts in Alaska state history, asking voters to remove three of six council members.
Larri Fancher, Larry Zuccaro, and Mike Fell handed the petitions to Clerk Jo Johnson at 3 pm on Friday. They then took down their temporary recall headquarters on Ocean Drive and closed up their name-gathering operation. Within two weeks, they had acquired more than enough names to force a recall. They were satisfied with their work.
Clerk Johnson must verify the signatures and decide whether the petitioners have a legitimate case against council members Donna Aderhold, David Lewis and Catriona Reynolds, who angered many in this fishing-and-art community for attempting to enshrine Homer as a “sanctuary city,” where illegal immigrants could find safe haven from federal immigration authorities.
“We think Jo will be able to verify the 373 voter names needed within a couple of days,” said Zuccaro on Sunday. He said the group could have kept gathering signatures, but felt that having more than 25 percent above what was needed would be sufficient and it was time to move on to organize for a vote.
The group says in its petition that “Aderhold, Lewis and Reynolds are each proven unfit for office, as evident by their individual efforts in preparation of Resolution 16-121 and 17-109, the text of which stands in clear and obvious violation of Homer City Code Title 1.”
Those efforts include trying to pass Resolution 16-121, opposing the Dakota Access Pipeline, and the effort to “resist” President Donald Trump and create a sanctuary city through Resolution 17-019.
The final version of the sanctuary resolution was unconvincing to many members of the public.
Several clauses, such as, “the city of Homer will not cooperate with federal agencies in detaining undocumented immigrants unless such actions are supported by court-issued federal warrants” were changed in the final version. But the intent was clear, they said, in the final version: “the city of Homer will cooperate with federal agencies in detaining undocumented immigrants [only] when court-issued federal warrants are delivered.”
With all the anti-Trump language in the original version of the resolution, it could be argued the three were engaged in partisan politics. That may violate the city’s Title 1 code prohibiting certain partisan political activity by city officials while on duty. There is also the matter of whether the three are simply unfit for office.
While the sanctuary city resolution eventually was watered down into an “inclusivity” resolution, it was already toxic because of the trail of emails uncovered by the citizen activists who now seek the removal of Alderhold, Lewis and Reynolds.
If a special election is held, it will probably be in May, Zuccaro said. Then, if voters decide to remove the three, the remaining council members and mayor would appoint interim council members.
Two of those who are targeted for removal — Reynolds and Lewis — are up for re-election in October. The third, Aderhold, would face voters next year.
The complete email chain between the three that has Homer so stirred up has been posted in the Peninsula Clarion.
Rep. Gabrielle LeDoux, right, seated with Sen. Bill Wielechowski,-D, Anchorage, and Rep. Ivy Sponholz, D-Anchorage, in 2016.
It is no secret to Juneau politicos that Rep. Gabrielle LeDoux’s birthday party last month was hosted by the Teamsters Union.
Plenty of union types attended the party in the Teamster’s Local 959 cozy headquarters upstairs apartment, just across the street from the State Office Building on Willoughby Ave. It was a social media-free zone, so for attendees it was a leave-no-trace event.
LeDoux turned 69 on March 24. Why the unions turned out in such force for the House Rules chair’s unremarkable birthday is one of the mystery ingredients of the sausage-making behind lawmaking.
LeDoux struggles to find allies in Juneau, even though she is Rules chair. She’s not trusted by Democrats, and she’s not well thought of by Republicans. And yet people traipse up the union stairs to pay their respects.
The last time Juneauites remember someone throwing a big party for LeDoux was in 2006, when she was on the arm of notorious Bill Allen, and he threw her a birthday party at the Prospector Hotel. That was also on a raucous night that lives in infamy in the annals of political corruption: They all ended up drinking and dancing in a bar on South Franklin, and the stories in Juneau are legendary. Earlier that night, a lot of deal making had been done.
By then, the FBI was already onto Allen and Veco and a handful of lawmakers for improperly influencing legislation on oil taxes.
LeDoux, then a liberal Republican from Kodiak, was a key vote Allen and his allies needed on oil tax legislation, the record shows.
It seems that whenever someone needs a key vote from LeDoux, there’s a birthday party to attend.
THIS LEGISLATION NEEDS A RIDE
LeDoux now holds the key to certain legislation that is of interest to union bosses — things like workman’s compensation, definitions of independent contractors, and the ability to unionize transportation network workers, if companies like Uber and Lyft should ever be allowed to operate in Alaska.
Her political action committee, Gabby’s Tuesday PAC, has the AFL-CIO as its largest contributor.
With the exception of Rep. Andy Josephson, D-Anchorage, few lawmakers are publicly lining up against House Bill 132, the transportation network bill that is surprisingly controversial. Forty-nine other states allow Uber and Lyft. Alaskans want the companies, while unions are fighting them tooth and nail.
Josephson, try as he may with one amendment after another, only slowed down the bill, but did not stop it from moving out of the House Labor and Commerce Committee.
LeDoux is the unions’ last line of defense against ride-sharing, and the word in the Capitol is she has a “poison pill” for House Bill 132. Rules is where the bill gets put on the House floor calendar. Will she allow it?
LABOR COMMISH WALKS HALLS TO KILL UBER
Rep. Sam Kito, chair of Labor and Commerce, resisted pressure from Department of Labor Commissioner Heidi Drygas and he moved the bill out his committee on Friday over her objections. Even Vince Beltrami, president of the Alaska AFL-CIO, was out in force, calling legislators to tell them that he’d gotten them elected and he expected them to deliver. LeDoux is also getting pressure.
LeDoux’s poison might be to insist on local control, which would again create a patchwork of regulatory conflicts between municipalities, especially along the Railbelt. Or it might be to insist that unions could organize drivers. Such a pill would allow her and the union-dominated caucus to vote in favor of HB 132, and yet be assured that Uber and Lyft will never come to Alaska under such anti-free-market conditions.
For pro-union types like Rep. Josephson, that would be a win-win because they could state, with straight faces, that they voted in favor of Uber.
TEAMSTERS AGAINST MILLENNIALS
Teamsters’ legislative director Barbara Huff Tuckness, who hosted the LeDoux birthday bash, is on record saying her union won’t support HB 132 unless drivers are covered by workers’ compensation, unemployment insurance, and “other employee-employer related benefits.”
Such as collective bargaining, for example.
In other words, Uber drivers would have to be Uber employees, which is not the business model at Uber. Like taxi drivers, Uber drivers are independent contractors, which exempts them from the control of unions.
The battle over allowing technology-driven, innovative companies like Uber, where users can hail a ride by using an application on their smart phones, is also a battle for the hearts and minds of younger Alaskans.
“Transportation network companies cut down on drunk driving, increase the use of car-pooling, make it cheaper for people to get jobs because it takes down barriers for them to get to work,” said House Minority Leader Charisse Millett. “For those folks who aren’t in a position to own a car, this is an answer to being able to hold down a job. This is great for young people, and for shift workers who get off work late at night.”
As of Saturday, the Uber bill had the strangest set of sponsors: Democrat Adam Wool of Fairbanks, who owns a bar and knows the importance of sober drivers, is the main sponsor. But recently two of the most archly conservative members of the House, David Eastman and George Rauscher, have signed on as co-sponsors.
The bill clearly has significant bipartisan support. It will be worth watching to see if Rep. LeDoux bottles the bill up in her Rules Committee, providing yet another occasion for LeDoux to attend a party at Teamster headquarters in Juneau.
Gov. Bill Walker’s income taxe hits single women hard.
SINGLE WOMAN IN ALASKA? YOU’RE GOING TO NEED A SPOUSE
Gov. Bill Walker’s income tax plan is no friend to single Alaskans.
Especially single Alaska women. And especially senior citizens and the disabled, many of whom are — wait for it — single with no dependents.
If you’re an Alaska single person without dependents and you gross $50,000 a year, under the governor’s plan your tax will be about $867.
But if you’re married, you and your spouse will pay just $484.
HB 115, Gov. Walker’s tax plan, hits single women particularly hard because, in Alaska — and elsewhere — women earn less than men.
Now, not only are they earning less, the governor plans to tax them at a higher rate than their married peers.
The tax brackets provided by the Governor’s Office through the Department of Revenue play favorites with investment dividends, too.
If you are fortunate enough to be a shareholder of a Native Corporation, you’ll only be taxed at 2.5 percent on your dividend. But all other dividends — including those that senior citizens depend on — are taxed as regular income, through a complicated set of brackets and marginal tax rates established by a taxation expert from Connecticut.
Walker, who last week slipped his income tax plan into an existing bill, HB 115, does all that, and more.
Instead of raising the $200 million with his 2016 proposed income tax plan, this year he has ratcheted it up to $660-700 million in taxes from Alaskans’ paychecks. He’s asking for 60 new Revenue collectors to do the work, a number that appears highly unrealistic given the complexity of new tax plan.
TRANSPARENCY FAIL
Rep. Paul Seaton
Rep. Paul Seaton, co-chair of House Finance, offered his income tax bill on February 10, 2017. He held hearings and took testimony.
He knew last year, however, that the Governor’s Office had hired an outside tax consultant, Dr. Richard Pomp, of Connecticut, to craft a new tax bill, which Pomp had provided to the governor in mid-December at a cost of $85,000.
Rep. Les Gara knew about it too, he said on Thursday during House Finance hearings.
Dr. Pomp was paid for by funds from a vacant position, explained Department of Revenue Tax Division Director Ken Alper on Thursday.
Seaton told members of the committee this week that the new tax plan was in response to the testimony the committee had received on his original bill.
And yet, the contract for Dr. Pomp began on Nov. 4, which means the bill Seaton offered was not in response to testimony received in Febuary, 2017.
The media has not yet asked Seaton when he knew of the existence of the tax plan that he allowed the governor to drop into House Finance last week under Seaton’s name.
Seaton has repeatedly told the press that the House Finance Committee is operating under the most transparent process in legislative history.
Yet, he neglected to inform his committee or the public that there was a completely new tax plan in the wings that would be inserted into his tax bill — a plan that would hit Alaskans squarely in their wallets.
Only through the insistence of Rep. Tammie Wilson, R-North Pole, were additional public hearings held this week on the massive changes that had been rolled into Seaton’s placeholder bill.
As this week’s public hearings went on, Seaton was evidently unfamiliar with the impacts that the governor’s tax plan will have on Alaskans. For example, neither he, nor the Department of Revenue, could answer why Alaskans who have trusts will be taxed, while Outsiders who have trusts in Alaska will be exempt. He was caught by surprise by one trust manager who said over 100 jobs would be lost as financial managers move out of state, and take the trusts with them to tax-friendly jurisdictions.
Rep. Les Gara, D-Anchorage admitted that he knew about the tax changes long before they came. He said he had spoken to Alper last year and learned that the department was using an Outside tax consultant to come up with a new tax strategy, after last year’s colossal failure to get any of the governor’s taxes through the Legislature.
“I don’t want anyone to think anything was hidden from them,” Gara said.
Gara said he supports Alaska having its own tax brackets like the ones being offered, rather than ones tied to the federal tax brackets, which could change.
Rep. Wilson asked that the consultant who wrote the bill be brought before the committee to answer the technical questions that neither Seaton nor Revenue could answer, but did not get an agreement from Seaton on Thursday.
Rep. Gabrielle LeDoux has a problem with the current election system: She doesn’t like her odds of succeeding during the next Primary Election in 2018.
The Republicans, which she joined after years as a Democrat, like their odds of defeating her. In fact, they consider her their top target for removal.
She knows it.
That’s because during the last election season, the East Anchorage lawyer ran as a Republican, and won as a Republican, only to leave her party and join with the Democrats in the Alaska House, where she now serves as Rules chairman.
Alaska Republicans felt betrayed by her, Rep. Louise Stutes of Kodiak and Rep. Paul Seaton of Homer. All three joined the Democrats in a coup to take over the House, even though the Democrats did not win a majority at the ballot box last November. Only by enticing three Republican “musk Ox” coalition members to cross over, were Democrats able to take power.
Statewide Republican leaders from Bettles to Ketchikan convened, debated, and decided: They sanctioned the three in a historic vote that removed all support — financial and organizational.
“It’s like if you sign on for a football or soccer team and then when you get to the game you decide to play for the other team,” said Alaska Republican Party Chairman Tuckerman Babcock.
Politics is, after all, a team sport. Being in the majority means you vote on the State budget with your majority team, and you stick together on strategy for moving your team and its ideas and legislation ahead. LeDoux, Stutes and Seaton joined the other team. Team switching is tolerated for legislators representing heavily Native districts, but there’s a bright line for the rest of them.
But LeDoux, a flower child from the ’60’s and a graduate of U.C. Berkeley (1970), has a cure for her electability predicament: Destroy the Republican Party by having candidates run in open primaries.
House Bill 200 would create a free-for-all primary for governor, lieutenant governor, legislature, U.S. House and U.S. Senate races. Sometimes it’s called a “jungle primary;” at other times it’s politely referred to as a “blanket primary.”
But let’s just call it a California primary, because that’s how they do it there. All candidates for the same office, regardless of political party, run against each other at once, instead of being designated by political party. The top two vote getters go on to the General Election ballot.
There would be no need for a party endorsement, and the person with the biggest political action committee would be the most likely to make it to the General. In San Francisco, Republicans don’t even bother running, because they are never going to make it past the Primary.
In LeDoux’s game theory, this would work for her. She could win a top-two slot in such a scenario in her district. And with unions behind her and name recognition, her odds improve.
LeDoux’s odds might also work for a handful of Democrats. But her bill would hit a wall of opposition as well as a likely legal challenge.
HB 200 was referred to House Judiciary, chaired by Rep. Matt Claman, who serves a district that is not a natural fit for him. There were no sponsor statements to view, no cosponsors. And in spite of the fact that LeDoux is part of the new Democrat majority, Capitol observers detect she is isolated. The Democrats don’t quite trust her.
The LeDoux bill also might make a guy like Claman uncomfortable. His District 21 race was named one of the top 2016 races to watch by the National Republican State Leadership Committee. He could be taken out in a free-for-all primary battle.
DEMOCRATS THROWING KITCHEN SINK AT ELECTION PROCESS
Unable to win in Republican-leaning Ketchikan, Democrats in 2014 tested the waters with an independent candidate, Daniel Ortiz. Ortiz, a popular school teacher, said he’d caucus with the Republicans, but he’s been solid with the Democrats ever since taking office. He’s as reliable a Democratic vote as Nancy Pelosi.
Gov. Walker also dropped his Republican affiliation because he could not win in the primary, and ran as a nonpartisan candidate, pairing up with Democrat Byron Mallott after the primary, and working closely with the Democrats to ease into office in 2014 and then govern hard-left ever since.
His administration is full to the brim with functionaries handpicked by liberal Juneau operative Bruce Botelho, who led Walker’s transition team and is seen still wheeling and dealing on the Third Floor.
The next up to bat was Jason Grenn, who ran in 2016 as a “nonpartisan” with union help and took out South Anchorage’s Rep. Liz Vazquez in the general election. The Democrats had convinced the Democrat candidate Ed Cullinane that he didn’t feel well enough to continue, so he dropped, making it mainly a two-way race, except for a third party who turned out to get just enough votes to be a spoiler for Rep. Vazquez.
Democrats are running independents consistently now, as the Democratic Party brand becomes more radical and less palatable.
ALASKA STILL R-COUNTRY
In Alaska, more than 146,000 registered voters are Republicans and they vote a semi-closed ballot to prevent the kinds of shenanigans that can occur when an opposing party — be it Democrat or Libertarian — tries to overwhelm the ballot box.
Currently, Republicans, nonpartisan, and undeclared voters all may vote the Republican ballot.
Democrats or members of other organized parties are not allowed to vote the Republican primary ballot. It’s a semi-closed format that has been challenged but upheld, because the U.S. Supreme Court affirmed the parties’ right to political association and organization.
The party-rule ballot has the names of candidates who filed for the Republican nomination and would be available to Republican, nonpartisan and undeclared voters. The other ballot contains all non-Republican candidates, is available to all voters, and is known as a Statutory ballot. A voter may only votes one of the two ballots, although in rural Alaska in 2016, many voters were allowed to vote both the Republican and statutory ballots — illegally.
If LeDoux has her way, there will be locations in the state where Democrats will never make it to the General Election, and voters will never get to hear the wide range of ideas that third party candidates also bring.
Instead, out in the Mat-Su Valley, you’ll have Republican vs. Republican in the General as well as the Primary. Democrats will not advance due to the conservative nature of that part of the state.
The same goes for a deeply Democrat environ such as District 33, the downtown Juneau district, where a Republican would never get a chance to have his or her ideas heard in the General Election season. The battle would be between a Democrat and another Democrat. The thoughts of the loyal opposition would be lost.
PRIMARIES SWAMPED BY SPECIAL INTERESTS
In the 2016 Primary Election, fewer than 16 percent of registered voters went to the polls, which was several percentage points better than the 2000 Primary, when barely more than 9 percent bothered to vote during the height of summer.
With numbers like that, a highly motivated and well-funded group from Outside the state could easily take over the primaries in a small-population state like Alaska, especially with our strict campaign fundraising laws. Armed with political action committee cash and Big Data, a surrogate group for the Sierra Club, or the “Resist” movement could run circles around local candidates, even more than they do now. You’d never know what a candidate really stood for. Kind of in the same way the public really doesn’t know what Rep. Grenn stands for.
LeDoux herself has a political action committee, Gabby’s Tuesday PAC, and she requires lobbyists to pay her handsomely so that she can back “commonsense conservatives,” as she defines the term.
Last year she backed Jim Colver, Bob Lynn, Paul Seaton, and a handful of others with the 18 checks she took into her coffers, the largest of which was from the AFL-CIO.
It appears that LeDoux is now trying to eliminate the party system in Alaska entirely, by withholding information from voters, like HB 200 seeks to do. She also has an axe to grind with the Republican Party, which voted to withdraw all support from her and run a candidate to oppose her next time as a result of her defection the Democrats.
But even if LeDoux’s gambit passes, she would face legal hurdles. According to the Alaska Constitution, the lieutenant governor runs on the same ticket as the winning member of the party. It’s unclear how that would work if two Democrats or two Republicans advance for governor on the General Election ballot.
HB 175 — KILLING THE ELECTORAL COLLEGE — PASSES WITH DEMS IN CHARGE
HB 200 goes hand in hand with another piece of liberal legislation, HB 175, which would eliminate the Electoral College process in Alaska and award all three Electoral College votes to the candidate who won the most votes in the United States as a whole.
That bill is sponsored by Democrats Rep. Zach Fansler, Les Gara, Justin Parish, Harriet Drummond, Scott Kawasaki, and Geran Tarr. It creates an interstate compact and if enough states joined the compact, the presidential election would essentially become a popular vote.
In the most recent presidential election, all three of Alaska’s Electoral College votes would have been awarded to Hillary Clinton.
As HB 175 was voted on in the House State Affairs committee this week, Rep. LeDoux took a pass, and wouldn’t vote the bill up or down. It passed with the majority Democrats voting for it and only Republicans DeLena Johnson, Gary Knopp and Chris Birch voting no. Democrat Adam Wool also took a pass.
Between HB 175 and HB 200, House Democrats (and the “Republicans” who joined them) are attempting to make over the election process in Alaska — a process that is not broken.
Dr. Richard Pomp, a law professor at the University of Connecticut, was contracted by the Alaska Department of Law to provide a blueprint for a new income tax for Alaska, according to the contract.
The contract for Dr. Richard Pomp, the man who wrote the proposed Alaska income tax that was inserted by the Governor into House Bill 115, shows that Pomp has been on contract with the Walker Administration since Nov. 4, 2016.
And he will remain on contract through June 30, 2017.
Although his contract stipulates he’ll be available to testify on the bill he authored, he has not yet been called by the co-chairs of House Finance, which is hearing the bill this week.
He’s not been seen in the Capitol as questions are raised by both committee members and the public, for whom this tax plan is a difficult structure to understand.
Public hearings continue on Thursday. The committee, dominated by Democrats, could vote on HB 115 on Friday, if the co-chairs choose to move the bill out of committee.
“Version L” of HB 115 introduced numerous tax brackets and marginal tax rates. There are precious few deductions.
Alaska Natives who receive Native Corporation dividends get those taxed at 2.5 percent, while Alaskans with trusts get taxed at 7 percent. All income – pensions, fixed, rental, or wages – is treated as income. Even unions pensions are taxed as regular income.
The devil of this tax plan is in the details, however, and there are precious few details to be found in HB 115. Most of the tax rules will come through hundreds of companion regulations that would have to be written by the Department of Revenue.
Republican members of House Finance have posed numerous questions that neither Rep. Seaton nor his aide Taneeka Hansen have been able to answer this week.
Seaton allowed Gov. Walker to insert the “Pomp Tax Plan” language into his pre-existing bill, which had an entirely different tax plan in its original form.
But the news that Pomp was hired by the Administration to write the income tax plan came out Monday and has reverberated throughout the Capitol.
Instead of hearing from the author himself, the committee has heard from Carl Davis, who is a research director at the Institute on Taxation and Economic Policy, a pro-income tax group. Pomp serves on the board of ITEP.
Additionally, Pomp’s contract is not with the Department of Revenue, but actually with the Department of Law. Approved by Deputy Attorney General Jim Cantor in early December, the start date of Nov. 4 indicates the search for an appropriate person to write an income tax plan for Alaska took place throughout the fall.
In other words, Governor Walker’s Administration has been quietly working on developing new, more aggressive income tax legislation for months prior to the convening of the legislative session.
Twitter messages such as the one above are a regular feature in Gov. Bill Walker’s Twitter feed.
With Gov. Walker making statements weekly about the need for new revenue, it’s likely he signed off on the contract with Pomp. His Attorney General Jahna Lindemuth would also have been in the loop. Walker would have needed a tax expert with the “progressive tax” sympathies that reflect that of the Democrats, his current political allies.
Walker found that soul mate in Richard Pomp.
Pomp, whose curriculum vitae is 16 pages long, is a guy who lives, eats, and breathes tax policy. He is no stranger to Alaska, having served as a consultant to the Department of Revenue from 2009-2010. He has also been a consultant to the left-leaning Citizens for Tax Justice.
In the contract appendix, it’s noted that Pomp is expected to testify before the Legislature:
“At the specific direction of the Attorney General’s Office, the Contractor shall provide legal research and advice on two pieces of proposed legislation concerning income tax: 1) a personal income tax calculated as a percentage of the Adjusted Gross Income reported on federal income tax returns and 2) a measure to modify the rate structure of Alaska’s existing corporate tax and make provision for taxation of income from S-Corporations. It may be necessary to also provide expert testimony as the bills work their way through the legislature.”
Appendix D indicates that Pomp would be available:
“In full consideration of the Contractor’s performance under this agreement, the State shall pay the Contractor for the professional services of Richard Pomp $85,000 upon completion of the scope of work on or about December 15. That fee will include subsequent testimony on the work product.”
The concerns and questions keep adding up for HB 115, but the proposed income tax author is nowhere to be found in the Capitol.
A University of Connecticut School of Law professor of tax law is the apparent author of the newest version of Governor Bill Walker’s income tax, HB 115, according to sources in the Department of Revenue.
Notable in the proposed income tax is how closely the tax structure that Dr. Richard Pomp has provided to the Department of Revenue mirrors the complex state tax brackets of Connecticut. Connecticut has a $15,000 personal exemption, for example; the one Gov. Walker is proposing has a $14,000 personal exemption.
Connecticut’s state tax system is unique and has various phase-out provisions that make it hard to compare with HB 115, but both tax systems contain several tax brackets. This bracketed approach is in contrast to the much simpler tax that Walker promoted last year.
Pomp is also on the board of the Institute for Taxation and Economic Policy, a pro-tax group that is being used heavily by the Democrat-led House Finance Committee. Pomp is said to have been paid $85,000 for his efforts on behalf of the governor and Department of Revenue.
Pomp is the author of a textbook, State and Local Taxation.
Testimony under way in House Finance today, with stiff opposition from most who are testifying. Rep. Paul Seaton, co-chair of the committee, and Rep. Les Gara, vice-chair, challenged several of those opposing the bill, indicating that they don’t know what they are talking about, and making sure they as tax proponents had the last word.
One testifier who owns a financial management company told the committee that over 100 jobs would be lost when financial companies who manage trusts move their operations to other states.
Bob Pawlowski, a retired captain of the National Oceanic and Atmospheric Administration, expressed concern about the impact of the income tax on pensions.
“As a senior, I think it’s really important that we have something that recognizes fixed income,” he said. “We bring a lot of money into this state but we have no earning potential.”
He also asked the committee to consider the impact of an income tax on military retirees, who have a choice to retire here or elsewhere.
Libby Dalton Slane, a 60-year resident of Fairbanks, said: “State operating costs have grown an average of 8 percent annually. Why is that? The answer is simple. We have a spending problem. Unemployment is the highest in the nation. You are already capping our PFD. Imposing an income tax will further damage our sluggish economy.”
She offered alternatives, including using existing savings to bridge to a sustainable budget in four years, implementing revenue limits, making spending reductions, and protecting the Permanent Fund Dividend as well as the Permanent Fund Earnings Reserve Account. In other words, she outlined much of what is in Senate Bill 26, which passed the Senate earlier this month but is languishing on the House side.
Kate Blair of Tesoro says there is a flaw in HB 115 as it relates to publicly traded companies and how the tax would apply to shares that are bought and sold numerous times. Blair is the government and public affairs manager at Tesoro Corporation.
Juneauite Judy Andree of the Alaska League of Women Voters supported the income tax because it is progressive. She opposes further cuts to State government.
Public hearings: Alaskans to offer their opinions starting today at 1 pm, when House Finance opens up HB 115 — an Alaska income tax — for public comment.
“The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the smallest possible amount of hissing.” – Jean-Baptiste Colbert, finance minister to Louis XIV of France.
Jean-Baptiste Colbert described what HB 115 is attempting to do in 2017.
Less than a week ago, Rep. Paul Seaton, a tax advocate from Homer, whipped out a completely new plan for his proposed income tax in HB 115.
There’s going to be some hissing from Alaskans.
The radically different HB 115 was a complicated piece of tax machinery that must have taken him months to complete.
Except that Seaton didn’t do the work.
The plan came from the Department of Revenue at the direction of Gov. Bill Walker.
This may be one reason Seaton’s s aide, Taneeka Hanson, was struggling to answer the House Finance Committee’s questions this week about the new “progressive” tax structure and its impacts on the lives of real Alaskans.
Hansen told the Finance Committee that she would have to defer to the Department of Revenue on matters of detail. She only had the high-level talking points in front of her.
Except that the Department of Revenue also didn’t do the work.
Revenue brought in an outside contractor to design the income tax, said Seaton, as he attempted to explain why neither he nor Hansen could answer simple questions, such as, “Can landlords take deductions off of their rent income, or do they have to declare all rent as income, even though they have expenses related to the property such as maintenance?”
The public doesn’t know who the contractor is who designed the governor’s tax plan or what tax policy he or she represents. Must Read Alaska has asked for the information through a public records request. We are told off the record that the contractor was paid more than $100,000.
Carl Davis, who works for the Institute for Taxation and Economic Policy, has been advising Democrats and Seaton, who are running House Finance. Davis is on the phone a lot during the committee’s discussions, available to answer committee questions on the new “progressive tax plan” being debated.
Today, Davis wrote an extensive opinion at the ITEP blog, lauding Gov. Walker’s tax plan as “the right balance.”
Whoever the author of the governor’s new tax plan is, they are in lock step with ITEP; the plan looks like it came directly from the institute.
THE MAN BEHIND THE TAX CURTAIN
Who this Institute on Taxation and Economic Policy that is influencing income tax for Alaska?
ITEP describes itself as a “non-profit, non-partisan research organization” that works on federal, state, and local tax policy issues. Robert Reich, former Labor Secretary under President Bill Clinton, is on its board. But others who are on the board or on the staff have published bios that boast of their passion for income taxes and closing corporate tax loopholes.
ITEP has received funding from various poverty-focused foundations, and these are some of them:
Annie E. Casey Foundation
Bauman Foundation
Coydog Foundation
Ford Foundation
Nathan Cummings Foundation
Popplestone Foundation
Steven M Silberstein Foundation
Stoneman Family Fund
“ITEP’s mission is to ensure that elected officials, the media, and the general public have access to accurate, timely, and straightforward information that allows them to understand the effects of current and proposed tax policies. ITEP’s work focuses particularly on issues of tax fairness and sustainability,” the organization writes.
Taxation fairness is a laudable goal, but the definition of fairness is entirely subjective. Ultimately, ITEP’s recommendations are to redistribute income. They would love to add Alaska to their “win” column for personal income taxes.
One Capitol observer is not impressed: “An economy based upon taxing one another instead of increasing production of goods and services to sell to the rest of the world is to attempt prosperity by taking in one another’s washing,” said the retiree, on condition on anonymity because he’s from Juneau, after all.
Tax Foundation is another think-tank group, and is the opposite of ITEP. It advocates for less taxation and more economic growth. Here’s what Tax Foundation says about ITEP’s push for “highly progressive income taxes” in ITEP’s most recent annual report, “Who Pays?”
ITEP advocates tax policies that suppress economic growth in favor of income redistribution.
Unlike ITEP, Tax Foundation believes that a tax system should choose long-term economic growth over short-term redistribution.
The relationship between economic growth and taxes is compelling. Tax Foundation research concludes that the most harmful taxes to growth are corporate and individual income taxes, followed by consumption (sales) tax.
Right now, economic growth is what most business leaders say Alaska needs the most.
“The more we try to make an income tax progressive, the more we undermine the factors that contribute most to economic growth: investment, risk-taking, entrepreneurship, and productivity. This is because high-income earners tend to do much of the saving, investing, risk-taking, and high-productivity labor,” writes the Tax Foundation in response to the ITEP report on all 50 states’ tax policies.
ITEP recommends that state and local governments rely on unstable sources of revenue.
ITEP suggests states move more toward progressive income tax systems. However, Tax Foundation argues that income taxes are the second least stable form of taxation, following corporate taxes.
Tax Foundation analyzed state and local government financial data obtained from the U.S. Census Bureau to come up with this chart showing the stability of various tax schemes:
The chart above shows that the most volatile source of combined state and local government taxes are the corporate income tax, followed by tax on individual income, and sales tax. Property tax revenues are the least volatile from year to year.
“In their analysis, ITEP punishes states that depend heavily on consumption taxes as a main source of revenue while advocating moving toward income taxation,” says Tax Foundation’s criticism of ITEP. “Depending largely on a volatile source of revenue can cause budget issues in the event of an economic downturn.”
HEARINGS WEDNESDAY AND THURSDAY
Americans for Prosperity Alaska has put out a call to action, in an effort to mobilize Alaskans and get them to put pressure on legislators. On Tuesday, the Alaska Chamber of Commerce launched a robust ad campaign against the income tax.
GOOD MORNING from somewhere in Alaska … It’s 
