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Airplane tax – via regulation – proposed by Gov. Walker

Suzanne Downing
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8

#ITAXALASKA

Alaska is not one of the two dozen states that require registration of airplanes. That’s a federal function and there’s not been a need to duplicate it in the 49th state.

Until now.

A new state registration system being proposed by Gov. Bill Walker would put every plane in a database and create a platform for an airplane tax.

Walker is looking to place a $150 tax on private airplanes of any size — whether Cessna 150s or 750s, single engine or turbo props — and a $250 tax on commercial aircraft of any size.

Think of it as a user fee — that’s what the Walker Administration says it is.

The Walker Aircraft Registration Tax, or WART, as critics are calling it, is expected to raise between $1.3 million and $1.5 million a year, a fraction of the motor fuel tax that is also being proposed by the Walker Administration earlier this year, which would raise as much as $80 million a year. Aviation fuels are included in that tax.

The aircraft registration program will cost $30,000 a year to administer. That is the equivalent of a half-time administrative assistant position in the Department of Transportation. There is no enforcement mechanism being created by the regulation, and the state thinks that aircraft owners will pay the fee via the honor system. No penalty will be imposed for ignoring the WART.

A poll conducted by the Alaska Airmens Association and the National Business Aviation Association showed that pilots in Alaska actually favor the motor fuel tax increase over either a registration fee or landing fees, “although a significant number of people responding commented that they opposed any increased fees or taxes.”

It looks like airplane owners are going to get both registration taxes and fuel tax.

 

In Anchorage, the municipality already charges between $75 and $150 to aircraft owners annually, and a $25 a month late fee. This would mean Anchorage aircraft owners will pay double taxation on their airplanes.

In Juneau, the borough owns and operates the airport, and charges a tax on commercial airlines.

WHAT ABOUT THAT PROPOSED AVIATION FUEL TAX INCREASE?

Senate Bill 25 and House Bill 60, introduced by Walker during the past legislative session, would triple the motor fuel tax, including maritime and jet fuels. Under the governor’s plan, the tax on aviation fuel in 2017 would have gone from 3.2 cents to 6.4 cents for jet fuel and 4.7 cents to 9.4 cents a gallon for aviation fuel. Then in 2018, the tax would have risen again.

Those bills are still alive for consideration in January, 2018 during regular session. The funds generated would be placed in the general fund for distribution throughout the state’s many needs, not just airport maintenance.

REGISTER, PAY STATE, RINSE, REPEAT

As the new regulation-based tax is currently proposed, much of the largest commercial airlines that frequent Alaska would be exempt because they are based out of state.

However, in-state airlines such as Ravn and Grant Aviation, Alaska Seaplanes out of Juneau and Taquan Air of Ketchikan, would be required to pay the tax, whether or not they use airstrips or waterways.

According to DOT, the tax is needed because aircraft owners should help pay for the cost of the aviation system. Commercial rates are set higher as they use the system on a daily or weekly basis, where as weekend pilots or experimental plane enthusiasts put little pressure on the system, according to DOT.

Nonprofits and faith-based groups such as Samaritan’s Purse or Bible camps that own aircraft based in Alaska would not be exempt from the tax. Senior citizens who own planes will not get an exemption, either. Any plane that is operable will be taxed under the proposed regulation, and that tax could be increased — or eliminated — in future years without going through the statutory process.

According to the FAA, there are 7,933 active pilots and 9,346 registered aircraft in Alaska.

Alaska has 400 public airports, 282 land-based, 4 public heliports, 114 seaplane bases, with a total of 747 landing areas (private, public, and military). Lakes, gravel bars, and frozen tundra areas number in the thousands, and are widely used by pilots. Seaplane bases number 114.

Alaska has 306 certified air carriers providing scheduled and on-demand services. Some, like Alaska Air and Delta, are based out of state, the FAA states.

The proposed tax is now open for public comment and public meetings are planned for November:

Nov. 9:  1st Floor Conference Room
Alaska DOT&PF 2-4 pm
3132 Channel Drive, Juneau

Nov. 14: Airport Response Center
Fairbanks International Airport 2-4 pm
5195 Brumbaugh Blvd, Fairbanks

Nov. 20: Central Region Main Conference Room
Alaska DOT&PF 2-4 pm
4111 Aviation Ave, Anchorage

Comments may also be submitted by mail to:

Rich Sewell, Aviation Policy Planner
Alaska Department of Transportation & Public Facilities
PO Box 196900
Anchorage, AK 99519

Or via email to:  [email protected]

Comments must be received by 5:00 pm Alaska Standard Time on January 5, 2018.

[Click here to find out more details about the new airplane tax.]

[Click here to read FAA fact sheet on Alaska aviation]

 

Attorney General challenges ruling on Democrat primary

Suzanne Downing
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5
Attorney General challenges ruling on Democrat primary

Attorney General Jahna Lindemuth today appealed to the Alaska Supreme Court in the case of Alaska Democratic Party v. State of Alaska, which challenged a state statute requiring candidates who run in a political party’s primary to be actually registered as voters in that party.

The Alaska Democratic Party filed a suit against the State to be allowed to run unaffiliated candidates in its 2018 primary.

In October, Juneau Superior Court Judge Philip Pallenberg ruled the statute unconstitutional as it violates the Alaska Democratic Party’s First Amendment “freedom of association” with candidates who are not actual Democrats.

Lindemuth today said the matter is important enough to take to the Alaska Supreme Court for further review.

“We don’t agree with the superior court that the party membership requirement in state statute places an unconstitutional burden on political parties,” she said in a statement.

This story will be updated.

ANWR is a dot on Don Young’s nose

Suzanne Downing
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5

WATCH HIS TESTIMONY IN THE SENATE

At times the footprint of the proposed drilling in the Arctic National Wildlife Refuge is described as no bigger than a dime on a football field.

Alaska Congressman Don Young used a different tactic to explain it. He took out a blue marker and put a dot on his nose while testifying before the Senate Energy and Natural Resources Committee to advocate for oil and gas development in the 1002 Area of ANWR.

Young said technology has improved so much that no more than 2,000 acres ( or 3 square miles) of the 19 million acre refuge would be required to develop the 20 billion barrels of oil estimated to be in the coastal plain.

After Young drew the dot on the tip of his nose, he remarked: “You see anything different on my nose right now? This little dot on my nose – I weigh 225 lbs. – this little dot is what we’re talking about in surface impact in the 1002 Area. That’s a potential for approximately – early estimates were 10 billion barrels – and now estimates are probably around 20 billion barrels of oil.”

 

Rogoff bankruptcy fight continues as lawyers ‘pierce the veil’

Suzanne Downing
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5
Rogoff bankruptcy fight continues as lawyers ‘pierce the veil’

THEY’RE STABBING AT THE VEIL, AT LEAST

The best advice anyone can give Erin Austin today is: Get a lawyer.

[Editor’s note: No one has impugned Erin Austin’s professional work in these proceedings. She is represented as an employee of the Binkley Company.]

The former financial officer for Alice Rogoff’s collection of shell companies is getting the cold shoulder from her former boss, Rogoff, who is saying that she (Rogoff) had no idea that money was being moved around from one limited liability corporation to another to pay bills for the Alaska Dispatch News.

The Chapter 7 bankruptcy hearing for Rogoff took place at the Historic Courthouse on 4th Avenue in Anchorage on Thursday. Rogoff, with a wolf-ruff parka draped over her chair, was classically noncommittal in answering the questions of some of the creditors.

All these transactions that the creditors were asking about were done by Erin Austin, Rogoff said, and she just knew nothing about it.

Here are the main takeaways from the meeting, which lasted about an hour:

  • It appears the Alaska Dispatch News is being renamed the Anchorage Daily News. When asked who she worked for, CFO Erin Austin said “Anchorage Daily News” and it was with hesitancy and under her breath.
  • Northrim Bank may be nervous that the interest payments that Rogoff paid the bank — some $55,000 a month — might be clawed back by the bankruptcy court. At least some of the payments she made earlier this year.
  • The Chapter 7 trustee has filed a motion regarding fraudulent transfers. It may be that any transfers in the weeks or months leading up to bankruptcy will be seen as fraudulent. This indicates an actual crime.
  • “I did not involve myself in the recording of journal entries,” Rogoff said. This is important because whoever did may be in trouble if fraud is alleged by the bankruptcy court.

  • The Binkley Company is the custodian of record for all the ledgers and documents related to the newspaper it bought, and because of that, is getting dragged into the Chapter 7 proceedings because the new company will have to release every scrap of paper asked for by the court.
  • Bill Armus, the attorney for the creditors, has indicated he will request a 2004 exam. That would require Rogoff to bring in every document she has — every checkbook, her marital settlement, and every single asset that she owns. The creditors want those assets exposed.
  • Evidence of a fight ahead over the Rule 2004 exam became apparent today, with lawyers in the room rushing to declare that lines of questioning were not relevant. “Rule 2004 provides a process for examining virtually anybody who might have any knowledge of anything touching on the debtor’s finances, property, schedules, plan of reorganization or ability to pay debts. Because of its broad scope, a Rule 2004 exam is often a fishing expedition with no real goal in mind other than to trip up the debtor or uncover evidence of abuse or financial mismanagement. For that reason, even filing a motion with the court requesting a 2004 exam can engender a fight and even a mini-examination by the court to determine the relevance of the information sought.” – TheBalance.com
  • Rogoff has no employees for the “digital news compilation” site, ArcticNow.com. It is being operated by her “personally,” she said. That would indicate the staff running it are on contract.
  • Arctic Partners, one of the major creditors, was not represented in the creditors’ meeting today. Tony Hopfinger, who is owed as much as $900,000 by Rogoff, attended by phone but did not speak or ask questions.
  • Everyone of the creditors are out for themselves. And Rogoff is trying to keep them out of her bank account.

[Read: Craig Medred breaks it down further]

 

Alaska among hottest gubernatorial races for 2018

Suzanne Downing
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6
Alaska among hottest gubernatorial races for 2018

WALKER APPROVAL RATING SINKS

Gov. Bill Walker’s approval rating is 40 percent, and his disapproval rating is 47 percent, according to a compilation of recent polls from July through September. In political parlance, he is “upside down” on his approval ratings.

The hottest general election contests in 2018 are expected to be Alaska, Colorado, Connecticut, Florida, Illinois, Maine, Michigan, Minnesota, Nevada, New Mexico and Ohio, wrote Ron Faucheux, president of Clarus Research Group, a research and polling company based in Washington DC.

All 10 of the top 10 governors in terms of approval ratings are Republicans. Of the bottom 10, 7 are Republicans, 2 are Democrats and 1 — Walker — is an an undeclared. Seven governors are approved of less than Walker.

TOP RANGE – APPROVAL/DISAPPROVAL

1. Massachusetts, Charlie Baker (R): 69%/17%
2. Maryland, Larry Hogan (R): 66%/18%
3. Arkansas, Asa Hutchinson (R): 63%/19%
4. Alabama, Kay Ivey (R): 62%/12%
5. North Dakota, Doug Burgum (R): 62%/17%
6. Nevada, Brian Sandoval (R): 61%/21%
7. Vermont, Phil Scott (R): 60%/21%
8. New Hampshire , Chris Sununu (R): 59%/22%
9. Wyoming, Matt Mead (R): 59%/23%
10. South Dakota, Dennis Daugaard (R): 59%/25%

MIDDLE RANGE – APPROVAL/DISAPPROVAL

11. Texas, Greg Abbott (R): 58%/25%
12. Tennessee, Bill Haslam (R): 57%/23%
13. Montana, Steve Bullock (D): 57%/26%
14. Georgia, Nathan Deal (R): 56%/24%
15. Nebraska, Pete Ricketts (R): 56%/29%
Utah, Gary Herbert (R): 56%/29%
16. Mississippi, Phil Bryant (R): 55%/27%
17. Ohio, John Kasich (R): 55%/30%
18. New York, Andrew Cuomo (D): 55%/33%
19. Colorado, John Hickenlooper (D): 54%/30%
20. Florida, Rick Scott (R): 54%/34%
21. Indiana,  Eric Holcomb (R): 53%/21%
21. Indiana,  Eric Holcomb (R): 53%/21%
22. Louisiana, John Bel Edwards (D): 53%/32%
23. Minnesota, Mark Dayton (D): 52%/34%
24. South Carolina, Henry McMaster (R): 51%/21%
25. Delaware, John Carney (D): 51%/27%
26. Idaho, Butch Otter (R): 51%/35%
27. North Carolina, Roy Cooper (D): 50%/28%
28. Oregon, Kate Brown (D): 50%/34%
29. Missouri, Eric Greitens (R): 49%/29%
30. Virginia, Terry McAuliffe (D): 48%/31%
31. Washington, Jay Inslee (D): 48%/33%
32. California, Jerry Brown (D): 48%/37%
33. Hawaii, David Ige (D): 47%/39%
34. Arizona, Doug Ducey (R): 46%/33%
35. Pennsylvania, Tom Wolf (D): 46%/38%
36. Iowa, Kim Reynolds (R):  45%/27%
37. Kentucky, Matt Bevin (R): 45%/41%
38. Wisconsin, Scott Walker (R): 44%/48%
39. Maine, Paul LePage (R): 42%/52%

BOTTOM 10 – APPROVAL/DISAPPROVAL

40. West Virginia, Jim Justice (R): 41%/46%
41. Rhode Island, Gina Raimondo (D): 41%/47%
42. Alaska, Bill Walker (I): 40%/47%
43. Michigan, Rick Snyder (R): 37%/50%
44. New Mexico, Susana Martinez (R): 37%/52%
45. Illinois, Bruce Rauner (R): 30%/55%
46. Oklahoma, Mary Fallin (R): 30%/58%
47. Kansas, Sam Brownback  (R): 24%/66%
48. Connecticut, Dan Malloy (D): 23%/68%
49. New Jersey, Chris Christie (R): 18%/77%

Sen. Maria Cantwell cuts Lt. Gov. Byron Mallott off during ANWR testimony

Suzanne Downing
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6
Sen. Maria Cantwell cuts Lt. Gov. Byron Mallott off during ANWR testimony

Lt. Gov. Byron Mallott tends to go long in his remarks. As a Tlingit elder, he holds forth when given the microphone. It can be tedious. But you don’t interrupt a Tlingit elder when he’s holding forth.

Unless you are Sen. Maria Cantwell of Washington State, especially if Mallott, a fellow Democrat, is not supporting her position of keeping the Arctic National Wildlife Refuge off-limits to drilling.

IRONY OR NO IRONY?

During today’s testimony in front of the Senate Energy Committee, Mallott was answering a question posed by Sen. Al Franken, D-Minnesota, who wanted Mallott to answer if he found it ironic that Alaska, impacted by climate change more than any other state, was supporting “drilling in the habitat of the food source for an indigenous people. Do you disagree that there’s some irony here?”

Franken had gone on too long, and his time had expired, but committee Chairman Lisa Murkowski said she would allow Mallott to answer.

“I disagree,” Mallott said. “We need to continue to evolve our petroleum-based economy as we also seek to be responsive to our climate change reality. Nobody knows that better than we do. We live with it every single day. It will take decades for us to withdraw from reliance on a petroleum-based economy.”

“And for us in the meantime to rely on sources on our own raises national security issues, it raises economic issues, it raises issues that impact us in Alaska very directly…” Mallott said.

Mallott went on for a couple of more sentences when Sen. Cantwell, the ranking Democrat on the committee, blurted out: “Madam Chair, Madam Chair, I think there’s going to be two votes at noon. And there’s several of our colleagues who have been here …. I hope we can get a short summation so we can move on.”

Mallott responded: “Sure. I disagree that it’s ironic. It’s in the national interest, it is in Alaska’s interest, and it is the world’s interest that we allow this kind of development to take place.”

Later in the hearing, Mallott said with a sense of irony:

“I am a Tlingit Indian, and when people ask me to be brief, I’m doing my damnedest.”

That rejoiner to Cantwell is now part of the Congressional Record.

Quote of the day: We will not become conservation refugees

Suzanne Downing
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3
Quote of the day: We will not become conservation refugees

The Arctic Iñupiat will not become conservation refugees. We do not approve of efforts to turn our homeland into one giant national park, which literally guarantees us a fate with no economy, no jobs, reduced subsistence and no hope for the future of our people. We are already being impacted by restrictions of access to the federal lands for subsistence purposes – this is really disturbing to us since we have lived here long before there ever was a refuge designated.”

– Matthew Rexford, tribal administrator, Kaktovik, in testimony before the Senate Energy Committee on Nov. 2, 2017.

Time to fully repeal Senate Bill 91

Suzanne Downing
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0

By MIA COSTELLO
ALASKA STATE SENATOR

Alaska needs to repeal Senate Bill 91. I say this as a former supporter of the criminal justice reform bill. I even co-sponsored it. I fully believed in the bill. I don’t believe in it anymore.

Senate Bill 91 has failed — and ever since its passage I have watched my neighbors and fellow Alaskans suffer as crime has increased, seemingly without end. We need to start over.

We got it wrong and we need to say so. If we don’t acknowledge it’s broken, we won’t be able to fix it. The good intentions of Senate Bill 91, and the results seen in other states, are meaningless if Alaskans are not safe. We need to recognize the law failed us and has hurt Alaskans, families and businesses. The public has lost its trust in our criminal justice system, and repealing this law is the first step to gain it back.

When I was growing up in Turnagain, my parents left the front door unlocked for friends and neighbors. Today those same friends and neighbors tell me they no longer feel safe in their homes. With unprecedented levels of car theft and other crimes, we’ve lost the sense that our community is a safe place to live.

The first step toward feeling safe in our communities is a full repeal of Senate Bill 91. Here’s why.

Those on the front lines of public safety — our police — tell us they no longer have the tools in law to keep us safe. Decreasing sentences under Senate Bill 91 was supposed to provide for rehabilitation and other alternatives for offenders that would prevent crime. That isn’t happening. Alaskans are frustrated and angry to see thieves walk away from crime scenes with merely a citation.

The wholesale rewrite of our criminal statutes happened during an economic recession and drug epidemic in Alaska. Our criminal justice system is overwhelmed and not able to keep up with rapid changes required by Senate Bill 91. Lowering sentences, a new bail schedule, and changes to probation and parole have created confusion around our efforts to improve public safety.

Since the passage of Senate Bill 91, Alaska’s crime rates have spiked. According to crime data collected by the FBI, Alaska jumped from being 25th in the country in burglary to 14th. For larceny, we went from 13th to second. In property crime, we’ve gone from 17th in the nation to third. Alaska is in the top 15 in every category of crime for the first time in our history — just since Senate Bill 91 passed.

Some fervent supporters of Senate Bill 91 say that crime has been increasing for years and that Senate Bill 91 isn’t to blame. But this isn’t quite true. According to the Department of Public Safety’s Crime in Alaska 2016 report, over the last 15 years, the trends for larceny, burglary and vehicle thefts were down — until last year, when Senate Bill 91 was signed into law.

All categories showed sharp spikes upward in 2016. In fact, except for murder, crime rates in all offenses increased in 2016.

Naturally, Alaskans don’t want a knee-jerk reaction to public policy, and neither do I. Repealing the law, and reviewing the provisions that we agree can work one by one, is the best way to restart this process. We need continue thoughtful, focused dialogue with the Legislature and the public. However, that conversation needs to begin by listening to those of you who have been affected by Senate Bill 91.

Right now, criminals are emboldened, and law-abiding Alaskans have lost our sense of safety. We need to send a clear message.  We owe it to our communities to repeal Senate Bill 91 and start over.

Sen. Mia Costello chairs the Senate Labor and Commerce Committee and serves on the Senate Judiciary Committee. A graduate of West High, Harvard University and University of Alaska Southeast, she has served West Anchorage in the Legislature since 2011.

Armstrong extracting itself from Alaska

Suzanne Downing
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0
BY ELWOOD BREHMER
ALASKA JOURNAL OF COMMERCE

Despite holding one of the largest North Slope oil prospects, Armstrong Energy is cashing out some of its stake in Alaska.

Oil Search, a publicly traded company based in Papua New Guinea, announced Oct. 31 (Nov. 1 local date) that it has reached a $400 million deal with Armstrong Energy and GMT Exploration Co., a silent partner, to buy into the Pikka Unit and other Slope prospects.

Under the deal, Oil Search will get a 25.5 percent stake in the Pikka Unit — which is operated by Armstrong and holds the 1.2 billion barrel-plus Nanushuk oil prospect — and a 37.5 percent interest in the “Horseshoe” leases to the south.

Armstrong currently operates the Pikka Unit for its partners Denver-based GMT and Spanish major Repsol. Armstrong is also in the midst of the environmental impact statement process to develop the Nanushuk field, which could produce up to 120,000 barrels of oil per day.

Oil Search will take over as operator of Pikka from Armstrong on June 1, 2018, according to a company release. The company also has until June 30, 2019, to buy the rest of Armstrong’s and GMT’s interests in the prospects for another $450 million.

Currently, Repsol holds a 49 percent share of the Pikka Unit, while Armstong has 38.25 percent and GMT Exploration the remaining 12.75 percent interest, according to the Division of Oil and Gas.

Oil Search says it is in the process of setting up a U.S.-based subsidiary to manage its new Alaska holdings. Armstrong has estimated the cost of developing Nanushuk at $5 billion.

“The acquisition, exploration, appraisal and development costs will be fully covered by existing cash, cash flows and dedicated additional financing facilities,” according to the Oil Search release.

Repsol and Oil Search are partners in oil and gas projects in Papua New Guinea, according to the press release.

[Read more at Alaska Journal of Commerce]

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