Newly minted Sen. Rob Yundt of Wasilla surprised his fellow Republicans when he submitted his first bill, and it was a tax increase.
The Yundt tax, Senate Bill 92, is designed to enact a specific 9.2% tax on Hilcorp, the company that runs Prudhoe Bay, having taken over for BP Alaska when it exited the state.
Hilcorp is an S corporation, and currently those are not taxed in Alaska. But the bill opens up the door to taxing all S corporations, large and small, and business owners will want to pay heed.
Yundt’s bill threatens to destabilize the oil industry in Alaska. Many conservatives are “livid,” according to Must Read Alaska sources, that Yundt effectively sandbagged his Republican colleagues by not having a conversation with them first. But Democrat Sen. Bill Wielechowski was pleased, saying that good ideas can come from all sides. Wielechowski has been trying to increase taxes on oil companies his entire career. He’s known in circles as “Bill Will Tax.”
SB 92 is similar to a bill offered in 2023, SB 114, which was act “establishing an income tax on certain entities producing or transporting oil or gas in the state; relating to the oil and gas production tax.”
Yundt’s bill has nearly the same language as Wielechowski’s : “An Act establishing an income tax on certain entities producing or transporting oil or gas in the state.”
The tax is supposed to close what some say is a loophole. The S-Corp tax category bypasses income taxes on the company, enabling tax liability to “pass through” and apply to earnings of the company’s shareholders.
In 1980 Alaska repealed its personal income tax, so the shareholders in Alaska do not pay an income tax on their gains.
The statement from the Senate Republican Caucus said the Republican minority was measured, but pointed: They said they are “a non-binding caucus, meaning our members are free to pursue policy proposals that align with their constituent goals and personal values. While Senator Yundt is a valued and respected member of our team, the entirety of the caucus does not align with the proposed legislation SB 92.”
In the House, the Republicans were equally surprised as the Republican minority in the Senate. No one was brought into the discussion before Yundt introduced the bill on Monday.
Although the House and Senate are controlled by pro-tax Democrats, Yundt will still have to appear in front of the respective Resource committees and testify, and he may not be able to answer detailed questions about his own legislation. Oil and gas tax is an extremely specialized and complicated subject that takes years to master.
Some in Juneau have suggested that Yundt is being used by Democrats to find a way to fund their big-spending items, such as returning massive pensions to state and city employees in Alaska through the defined benefits package, and enacting a major spending increase for Alaska’s woefully mismanaged schools. If the tax increase is tied to either of these spending programs, it may improve its chance of passing.
In the past, Gov. Mike Dunleavy has threatened to veto similar legislation.
Who put Yundt up to it as a freshman legislator who has only been in office for less than a month and who never mentioned oil taxes during his campaign against Sen. David Wilson? That’s the burning question among Republicans in the Capitol this week.
Rep Yundt …
Hey Dude(!), we don’t have a “Revenue” problem that needs to be solved at the Sate and Muni level, we specifically have a “SPENDING” problem that needs to be solved!!!
That’s the crux of the budget “problem”.
I don’t follow valley politics. Was the guy perceived to be a conservative during the campaign?
See, the Alaskan GOP is dead and the democrats are running it. Who said you’re vote matters? Not in Alaska.
Got to give it to Sen. Yundt, he knows how to spur economic development.
Just think of all the advertising dollars that will circulate through the economy to defeat his deceitful RINO rear end.
Please tell me we don’t have another Murkowski!
Yes Kenai. I live in the valley and voted for the other guy. Looks like we got LISA’ d.We got rid of Wilson, and a replacement for him is this jerk. Like Kelly in Eagle River, or Geisel in Anchorage. Maybe we should demand our candidates take a lie detector tests.
Cathy Giessel.
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The Weasel.
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Why do the dirty work yourself?
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Much easier to get a dumb freshman legislator to obey, with future promises of promotion.
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Wasilla….you got screwed.
Problem is it isn’t just Wasilla that got screwed.
Traitor much?
We tax enough in this state.
I’m shocked – I’ve known you in a business.
No effort to examine spending or an Alaska DOGE effort.
First thing you can do is try and raise taxes.
You will be a one termer sir!
It isn’t hard to figure it out. The sooner this guy can help kill gas production, the better his odds of selling the carbon capture plant with some electrical generation attached for his Chinese and Canadian investors. Remember, a few years ago Yundt, out of the blue, introduced a carbon capture resolution to the Matsu Borough. He ran from that so fast his mullet fell off!
I’m for the tax on Hilcorp!
More stupidity.
We have Federal Judge Sharon Gleason who shut down Hilcorp’s drilling for OUR source of gas to heat homes for MORE EPA studies, and Enstar suing Hilcorp for the result of that: Lack of gas to deliver to Alaskans, and now THIS?
Do I really need to run for office?
I left the oil industry 25 years ago. The mantra then was that Alaska had a less stable tax regime than Azerbaijan or Venezuela. It remains true today. Hey, Yundt, how’s about cutting spending? There are plenty of opportunities. Basic economics says that the more you tax something, the less you get of it. Want to choke the life out of the Alaska oil industry, just keep doing what you’re doing, you dipstick.
Here we go again with the same old song & dance; the ‘Juneau 2-Step’: One step forward, 2 steps back, spin your constituents with a line of smack.
A reading of Mr. Yundt’s election web site & under the heading “Robs Policy Positions” I found the following dated March 25th 2024, (for the liberals reading this (I know, oxymoron) that means not quite a year old) I found the following: “Fostering Alaska Prosperity: a case against state taxes”. Under this heading Mr. Yundt stated the following,
“History teaches us that over taxing residents often yields unintended consequences like stifling economic growth & burdening residents. Instead, Alaska’s focus should be on reducing or at the very least capping state spending while at the same time nurturing economic expansion through responsible resource development, technological innovation & reducing the many bureaucratic hurdles slowing private enterprises.”
Well, well, well, sounds pretty conservative(ish) to me… yet if you dig a little deeper into the same policy statement, you find that Mr. Yundt specifically mentions mining & timber but deliberately does not mention oil & gas. Not once. Yet when speaking of timber harvests he states; “sustainable timber harvests not only contribute to the economy but also promote environmental stewardship.” (Liberal code word alert).
I believe this approach to policy statements is called ‘riding-the-fence’. For all the years I’ve lived in the valley I really didn’t run across too many other matsu residents who prided themselves on ‘riding-the-fence’.
There is however a positive side to this. On the same web site under the heading of “Policy Achievements”, the number one policy achievement articulated by Mr. Yundt is; “Sponsored lifetime term limit legislation for Mayor & Assembly (no more career politicians).
Perhaps the best thing we can do as voters is to take Mr. Yundt’s advice and make sure he doesnt become one of those dreaded “career politicians” by making sure he is rewarded with a “term limit” the next time we see his name on the ballot.
I’ve totally changed my mind about this guy and forgive him for building in his pond.