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Walker set himself up for failure – again

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COMMENTARY / ANDREW JENSEN
ALASKA JOURNAL OF COMMERCE

Gov. Bill Walker appears to have not learned his lesson when calling a special session.

After the Legislature went all 121 days it was allowed this year without producing a budget or a way to pay for it, Walker called a special session with a loaded agenda that proved a recipe for disaster as the divided House and Senate exerted their respective leverage over the various pieces and it ended after 30 days at the same stalemate.

Now with a government shutdown looming, Walker called another special session with one agenda item: the operating budget. With no leverage over each other and an understanding of the consequences of not passing a budget by June 30, the House and Senate were finally able to agree on something and accomplished their one constitutionally-mandated task.

After the operating budget was agreed upon June 22, Walker added a second item to the session: ending the cashable credit program for North Slope explorers and small producers.

Again, with one item to consider and with both sides understanding the need to end a program with a $1 billion liability to the state budget, the House and Senate eventually agreed to kill the program retroactively to the start of the current fiscal year on July 1.

By this point the per diem counters were running and the public anger was growing over legislators collecting thousands of dollars per day while only a handful were actually involved in the heavy lifting of negotiation.

Acknowledging that anger, Walker declared he would not call a third special session until a capital budget bill was ready to pass. Like the limited call of the second session, with one thing to work on the House and Senate leaders finalized a deal and were able to come to order for a single day and pass it.

With the fourth special session of the year now set to begin Oct. 23, Walker has set himself up for another failure.

[Read more at Alaska Journal of Commerce]

Ketchikan school board’s final blow in Obama’s cupcake war

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KETCHIKAN – During the previous presidential administration, former First Lady Michelle Obama championed school nutrition, and the Department of Agriculture complied, tying school lunch funding to specific nutrition guidelines through the Healthy Hunger-Free Kids Act.

Michelle Obama became the patron saint of carrot sticks, and the bane of brownie bakers.

The rules implemented in school cafeterias in 2012 were supposed to improve nutrition and reduce obesity. They dictated everything from number of calories to grams of sugar and types of fat.

The 10 pages of federal guidelines, however, stepped on the toes of local control, and made it impossible, or at least impractical, to have bake sales on campus to support school activities.

The new policy became known as the “Obama war on cupcakes.”

This year, the Ketchikan Board of Education struck back. On Wednesday night, it cancelled the 10-page policy that had been given to the district by the feds in favor of a 2-paragraph set of guidelines that returned control of the food offerings to the superintendent and school principals.

Trevor Shaw, Ketchikan Board of Education president

“The role as a board is to set policy more on a broad level and incorporate into that policy a vision for the school district with regard to health and nutrition. It’s not our job to micromanage how that is done. There’s a difference between governance and management,” said Trevor Shaw, the 22-year-old president of the Ketchikan Board of Education.

Board member Glen Brown expressed the need for the board to stick a fork in the debate and vote:  “I think we’ve absolutely murdered this issue. This has been the summer of Policy 50-40,” he said, referring to the months-long debate over the substitute school district health and wellness policy, which the body finally adopted 4-1, with two members absent.

The result of the Obama-era Healthy Hunger-Free Kids Act was a lot of unhappy students across the country, who resisted the meager portions and flavorless offerings. The standards extended to vending machine snacks and baked items sold during fundraisers for teams and clubs.

The new two-paragraph policy is backed by 10 pages of locally written administrative directives to limit the marketing of unhealthy food and beverages, to support Alaska farm and fish on school menus when possible, and to encourage greater physical activity.

“We made the decision that just because the federal bureaucracy says this is what you need to do to get funds, we are going to do what we do locally that is best for our school district,” Shaw said.

With all the skirmishes over cupcakes and carrot cakes that have taken up the time of school boards across the country, Shaw said that Ketchikan’s patience in taking the long view in the fight for local control finally paid off.

“We kind of won the cupcake war,” he said.

Fourth special session — why not in Anchorage?

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Gov. Bill Walker is landing in Anchorage this week after a trip to China to peddle Alaska gas. At Commonwealth North on Friday, he and Revenue Commissioner Sheldon Fisher will once again make their case for income taxes on wage-earners.

And in just three weeks those proposed taxes will be heard and legislated on by 60 legislators who will convene in Juneau for an the ninth special session of Walker’s three years in office.

Senate Republicans will also try to convince the Democrats in the House to pass SB 54, a clean-up bill to correct problems with the crime reform package known as SB 91.

All that will happen Oct. 23 against the background of an increasingly discontent Southcentral Alaska voter. At a town hall meeting on Monday in South Anchorage, citizens were livid at the level of crime taking over the community.

After hearing their concerns at the meeting organized by Rep. Charisse Millett, Rep. Chris Birch wrote to Gov. Walker and said that constituents were loud and clear that they want the special session to be held in Anchorage so they can hold lawmakers’ feet to the fire about crime, punishment, and the proposed income tax.

“In addition to their understandable concerns, several expressed a strong desire that the Legislature should conduct its upcoming special session not in Juneau, but in Anchorage, to maximize public engagement in the process, and public access to legislative deliberation on the crime bill and the proposed income tax. The high cost of travel and lodging greatly limit direct in-person participation by most of our constituents in these hearings,” Birch wrote.

This is not about moving the capital, he told Must Read Alaska today. It’s about saving the state money in per diem and travel.

Many lawmakers, including those from rural parts of the state, will already be in Anchorage for the Alaska Federation of Natives annual convention.

As of Thursday afternoon, Birch had not heard back from the governor, although he spoke with Walker’s Chief of Staff Scott Kendall.

“There’s a disconnect,” Birch said. “There are a lot of very concerned and even fearful people in Anchorage who want to have a voice in the deliberations revolving around the crime issue and remedies for the problem.”

This is no way to run a tax policy

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Higher taxes, like those under debate in Alaska, would only add to the challenges the industry faces.

COMMENTARY / Dr. MARGARET THORNING
ALASKA JOURNAL OF COMMERCE

This summer, observers across the nation watched as lawmakers in the state of Alaska pulled together a buzzer-beating compromise that prevented a potentially catastrophic budget shutdown and kept the government funded through the coming fiscal year.

For countless Alaskans who simply wanted their government to continue to operate, the compromise is a win. The alternative — an unprecedented shutdown — would have been untenable, resulting in significant upheaval for Alaskans seeking to utilize programs ranging from fishery permitting to cruise ship oversight to early education and Head Start services.

For political and policy junkies, it was a budget showdown that checked nearly every box, complete with flaring tempers, bruised egos, high stakes, and the discussion of policy shifts that could send ripples through the economic landscape for years to come.

This is particularly true in the case of the oil and gas industry, a sector that is looking at increased taxes in the eye in Alaska while simultaneously facing extremely challenging market conditions across the nation and around the world.

On the heels of a massive surge in domestic production driven by advances in extraction technology and finds from the Bakken to the Marcellus, fortunes have changed somewhat for the American oil and gas sector.

Prices have fallen steadily in recent years, hovering around $47 per barrel, and analysts expect the price to remain in the $40 to $60 range for the next five years. The cost of producing a barrel of oil is also increasing alongside advances in extraction technology, with companies pursuing projects that are riskier, more difficult to access, and ultimately more expensive.

The oil and gas industry is strong, and no one will mistake it for a struggling mom-and-pop operation. But these are no longer the boom times of the early 2010s – margins are thinner, profits are lower, and the challenges on the horizon are greater than they have been in some time.

[Read more at Alaska Journal of Commerce]

Ketchikan stripe show makes national news

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KETCHIKAN – It was a pavement striping job so crooked it made the New York Post. The new yellow double lines on Tongass Highway wiggled, went wide, and stayed wet too long.

The paint job made the news because the car belonging to Ketchikan Gateway Borough Mayor David Landis ended up with yellow paint splotches.

“You come to expect having highway striping like that to be straight and have orderly looking lines and be professionally applied,” Landis told a reporter. “Something was clearly wrong with the equipment or the operation of that equipment to have so many things wrong all at once.”

The Ketchikan Daily News said that the State Department of Transportation explained that due to humidity, the paint didn’t dry as quickly a it should. But the state isn’t planning to repaint the highway.

And on further inspection, it appears that drivers on Tongass Highway, the city’s main thoroughfare, were weaving onto the freshly painted yellow lines.

That said, locals wondered aloud why DOT didn’t use the last three weeks, Ketchikan’s version of an Indian summer, to get the striping cone.

According to the newspaper, DOT recommends people who have the telltale yellow spatters get their vehicles pressure washed. If that doesn’t work, use WD-40, and after soaking the yellow spatters, wash the car. And finally, if that doesn’t do the trick, use a “liberal coating of Vaseline,” and then pressure wash.

We consulted to autogeekonline.net and found these instructions:

  1. Put on rubber gloves.
  2. Moisten a small shop towel with lacquer-paint-thinning solvent. Wring out the towel to prevent dripping.
  3. Apply solvent to the road-line paint, using the damp towel.
  4. Wait 10 to 15 seconds for the lacquer solvent to loosen the paint
  5. Wipe the road-line paint from your car, using a terry cloth. Massage the road paint in a circular motion until it comes loose.
  6. Moisten a fresh towel with lacquer-paint-thinning solvent and wipe down any remaining road-line paint. Use the buffer, equipped with a wool pad, to clean off the remaining road paint.
  7. Dry excess lacquer solvent with a new, dry towel.

Revenue pulls gaming permit for United Way Anchorage

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United Way of Anchorage is sideways with the Department of Revenue. Enough so that the State department’s tax division suspended the charitable agency’s gaming permit, as listed on the Department’s online database:

The suspension appears to have come in the middle of United Way’s fall campaign, which kicked off Aug 30.

Must Read Alaska called United Way to find out why the suspension was made, but the individual responding to the call was unaware of the problem. This story will be updated if more information becomes available. The Department of Revenue could not be reached this evening for an explanation.

Update: Elizabeth Miller, Vice President for Resource Development said that due to a miscommunication that led to a mistake in the permit application, the United Way of Anchorage gaming license from the State of Alaska has been temporarily suspended. “We are currently working to rectify the situation as quickly as possible,” the organization wrote this morning.

Update II: Thursday afternoon the gaming permit was restored.

One could wonder, why would Dept. of Revenue not just reach out to UWA and resolve it rather than suspending the permit of one of Alaska’s largest charities?

Quote of the week: Armchair quarterbacks

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“Not my job. I hear that a lot as our economy continues to struggle. We need fewer armchair quarterbacks and more players.”

Rep. Ivy Spohnholz, dismissing citizen activist Brad Keithley for his critical analysis of the Alaska House Democrats’ tax-and-spend plan.

In other words, if your opinions differ from Rep. Spohnholz, she’s not listening.

On April 16, 2017, Spohnholz voted in favor of HB 115, which would have established an income tax in Alaska that would have generated between $600 million and $800 million in revenue for state government. Under the plan she voted for, a single person making $50,000 per year would pay nearly $1,000 in income taxes to the state, and receive a Permanent Fund dividend that was cut to $1,200 — from $2,000.

The result of the legislation, which failed in the Senate, would mean that by 2019 Alaskans making $50,000 would be paying to the State of Alaska about $2 for every $25 in income (we are designating the PFD cut as a defacto tax in that calculation).

Crime townhall brings out frustration, anger of residents

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It’s not just anecdotal. Alaska has, in fact, become less safe, according to 2016 statistics released by the FBI this week.

At a Monday town hall meeting in Anchorage hosted by Rep. Charisse Millett, about 100 people came from all over the city — not just District 25 — to voice their concerns about the rise in crime. Some shouted, some screamed, some cried, and others held forth with specific criticisms and recommendations for several minutes until told by their fellow attendees to sit down.

Millett put no time limit on speakers, but they self-policed.

“It was the  most emotionally charged town hall we’ve seen in a long time. People just needed to be heard, and we were there to listen,” Millett said.

They were not emotional without reason. According to the FBI:

  • Property crime rose in Alaska 18.9 percent last year — the largest increase nationwide, according to the FBI report.
  • Auto theft in Alaska jumped 48.6 percent, the nation’s largest year-over-year change.
  • Violent crime in Alaska rose 10 percent. Robbery, aggravated assault, burglary, theft, and car theft also rose.
  • Sexual assault jumped by 16 percent in 2016.

Nationwide, property crime dropped 2 percent, violent crime rose 3.2 percent, auto theft rose 6.6 percent, and sexual assault rose just under 4 percent.

In addition to Millett, lawmakers in attendance at the Abbott Loop Elementary School town hall included Reps. Chris Birch, Andy Josephson, and Dan Saddler, Sen. Kevin Meyer and Anchorage mayoral candidate Rebecca Logan.
For some, it was a chance to voice their concerns face to face with lawmakers and law enforcement.

Many blamed SB 91 for the rise in crime, although defenders of the legislation said that crime was already going up under Gov. Bill Walker before he signed SB 91 into law.

Quote of the week: Gara on class warfare

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“Politics shouldn’t be about class warfare and eyeing the next election. I’m proud of the many wealthier Alaskans who have said they’d like chip in. So today over 6,000 Alaska corporations and lawyers, realtors, banks and doctors are exempted from paying corporate or any other taxes.”

Rep. Les Gara, advocating for income taxes in an Alaska Dispatch News op-ed.

In other words, class warfare is bad. Long live class warfare.