Alaska’s highest court ruled against the City of Soldotna on Friday in the city’s long standing annexation case. The decision sends the city back to the drawing board in its efforts to bring more central Kenai Peninsula residents into Soldotna’s boundaries.

Soldotna City manager Janette Bower says Alaska Supreme Court’s ruling is disappointing.

“It’s, you know, not the decision we wanted, but you know, of course, we’re going to always respect the Supreme Court and then we’ll review to see what other options may be available to us and whether we will continue to pursue the annexation,” she said.

The Friday ruling caps more than five years of work by the city to annex about two-and-a-half acres of land in Ridgeway, Funny River and Kalifornsky into Soldotna city limits. And it has implications beyond Soldotna — it sets a new precedent for how the Alaska Local Boundary Commission can advance those types of petitions.

“No other municipality has had to, basically, take the decision to a vote,” she said. “ … It’s usually done, you know, by unanimous decision by LBC. So This is, you know, uncharted territory, and part of the reason why we did appeal is because it could have an effect on other municipalities in the state.”

The ruling’s rooted in a 2020 decision by the Alaska Local Boundary Commission to send the city’s proposal to voters amid opposition from residents living in the areas proposed for annexation.

The city says annexing the properties will allow the city to grow and more equitably distribute the cost of city services like road maintenance among properties that benefit from them. But property owners who oppose annexation say they intentionally chose to live outside city limits, so they wouldn’t be subject to Soldotna’s laws.

On a 3-2 vote, local boundary commissioners amended Soldotna’s petition. The amendment made annexation contingent on approval by voters in the city and in the areas proposed for annexation. That’s instead of making it contingent on approval by state lawmakers. It was the first time the commission amended a petition in that manner.

The city wanted the decision to go to the Alaska Legislature. So it appealed the commission’s decision, as well as the superior court ruling that affirmed the commission vote.

Throughout the appeal, Soldotna’s lawyers have argued that the commission acted outside its authority, that the decision was inconsistent and that the underlying regulation was invalid. Here’s Bower again.

“Our argument is, and continues to be – as it states in the decision that we argued – that the commission’s constitutional obligation is to make decisions about municipal boundaries apart from the political process and local self interest,” she said.

In Friday’s ruling, though, the Alaska Supreme Court said the Local Boundary Commission “acted within its statutory grant of authority and had a reasonable basis for converting the petition.”

It will ultimately fall to Soldotna City Council members to decide how the city should move forward. That could include submitting a new annexation petition.

“What are we going to do next?” Bower said. “I can’t tell you what we’re doing next, because we don’t know, you know, just a few hours into the decision, we’re not quite sure of what that will look like, but we’ll be putting that all together for a report to the council and making a decision.”

A full history of Soldotna’s annexation efforts is available on the city’s website at soldotna.org/government/annexation.

One of the things that disappoints most about the Alaska media is its ongoing failure to report on – or even reference – the hugely regressive impact of using cuts in the Permanent Fund Dividend (PFD) to fund state government. The regressive approach the Legislature has used since 2016 to fund state government can be summarized by the mantra some observers use to describe it, usually in hushed tones – “the less you make, the more we take.”

It’s not that there isn’t source material that the media can use. Both the 2016 study for the then-administration of former Governor Bill Walker by researchers at the University of Alaska-Anchorage’s (UAA) Institute of Social and Economic Research (ISER) and the 2017 study for the then-Legislature by the Institute on Taxation and Economic Policy (ITEP) provide detailed analyses of the highly disproportionate impact on middle and lower-income – which together are 80% of – Alaska families that results from using PFD cuts to fund Alaska government.

For those who claim that’s old news, just last year, ISER Professor Matthew Berman, one of the authors of the 2016 ISER study and still on the faculty at UAA, made clear that the impact remains as regressive as ever. In an opinion piece in the Anchorage Daily News, Berman reiterated the points made in the 2016 ISER and other subsequent studies:

A cut in the PFD is a tax — the most regressive tax ever proposed. A $1,000 cut will push thousands of Alaska families below the poverty line. It will increase homelessness and food insecurity.

The two most relevant times to remind Alaskans of the impact of using PFD cuts to fund state government compared to the alternatives are each Spring as the Legislature develops the state budget, when the cuts are being made, and each Fall when the reduced PFD is distributed to Alaskans, when the cuts hit home. For the past several years, however, the media has done neither, leaving Alaskans repeatedly in the dark about one of the most – if not for many families the single most – significant economic decision affecting Alaska household income made annually by the Legislature.

It’s not that the state’s politicians are much better. Unlike as in some past years, this year’s announcement of the per PFD amount by the Dunleavy administration – relegated to a press release by Revenue Commissioner Adam Crum, which doesn’t even appear on the Governor’s website – doesn’t even whisper a mention of the level of the reduction from the current law level. Instead, the press release leads the third paragraph with the misleading claim that “[t]his is the 43rd year Alaskans have received their share of the state’s natural resources and investment earnings;” it fails to mention that this is, instead, the ninth year that the amount set by the Legislature – and signed by Governor Mike Dunleavy (R – Alaska) – has been significantly below Alaskans’ “share” set by state statute, much less the size of the cut or its hugely regressive impact on Alaska families.

While there may be others, in glancing through various posts from the state’s elected officials, the only one we noticed that even mentioned the cut was a tweet from Senator Bill Wielechowski (D – Anchorage), but in an era where many claim to be concerned about the outmigration of middle and lower-income – working – Alaska families, even that post didn’t focus on the regressive nature of the cut. Others, like those from self-proclaimed PFD defenders Senator Shelly Hughes (R – Palmer) and Representative Sarah Vance (R – Homer), just regurgitate the Dunleavy administration’s press release without noting the deficiency or its impact.

So, as we have done before, we will use one of these columns to address the level of the cut and its impact on Alaskan families by income bracket.

Calculating the level of the PFD cut at the aggregate level is easy. Using data available from the Permanent Fund Corporation’s monthly “History and Projections” report, we (and others) can easily calculate, to use the words of the applicable statute (AS 37.13.140(a)), the gross amount of the “income available for distribution” from the fund. The annual level of the cut is the difference between that and the amount appropriated by the Legislature for distribution, which is easily calculable from the annual appropriations bill.

For dividend (calendar) year 2024, the “income available for distribution” calculated per the statute is $2.34 billion. On the other hand, the amount appropriated by the Legislature, including both the amount being distributed as the PFD and the amount euphemistically described as the “energy relief payment,” totals $1.10 billion. The difference – the amount of the PFD cut – is $1.24 billion, more than half the statutory amount.

As we explained in a previous column, to put that amount in context, PFD cuts alone (adjusted for the final budget numbers) represent about a quarter of overall projected state revenues. For those who like to claim that Alaska is “fiscally conservative,” the cuts – or, to use Professor Berman’s term, the “taxes” – are being used to plug a deficit in the state budget about the same size on a percentage basis, as the deficit in the federal budget.

Calculating the amount of the cut per individual PFD is more complex. As we explained in a previous column, the amount of the individual PFD is calculated first by making some statutory adjustments to the gross amount and then second by dividing the remainder by the number of approved recipients. The size of the adjustments and the number of recipients are published by the Department of Revenue’s (DOR) Permanent Fund Dividend Division (PFD Division) only in arrears, sometimes a couple of years after the fact.

However, pending the publication of the final numbers, we can make a reasonably close approximation for 2024 using a combination of data available from the Legislative Finance Division (LegFin) and the information included by DOR in its announcement. LegFin reported in its July 2024 Newsletter that the amount available for the so-called “Energy Relief” payment is $190.3 million, the full amount conditionally appropriated by the Legislature as part of the overall budget (HB 268, Section 27). For its part, DOR’s announcement reported that the individual energy relief payment is $298.17. Dividing the former by the latter results in a recipient base of roughly 638,225, a larger number than reported by the PFD Division for 2023 but not out of line historically.

Multiplying that recipient base by the individual amount reported by DOR for the PFD ($1,403.83) equals approximately $896.0 million, indicating a net deduction by the PFD Division of approximately $18.3 million in adjustments from the $914.3 million appropriated by the Legislature. Deducting the same amount of adjustments from the gross statutory PFD level and dividing the result by the same number of recipients results in an estimated 2024 statutory PFD of $3,640 and, compared to the $1,702 being distributed, a PFD cut of approximately $1,938.

As the following chart indicates, while lower than some, on a dollar basis, the amount of the 2024 cut ($1,938) is materially higher than the average size of the cuts made over the past nine years ($1,659). On the other hand, the percentage of the cut is about the same. Over the past nine years, PFD cuts have been about 52% of the statutory amount. The 2024 cut is a bit over 53% of the statutory amount. Put another way, the amount paid in 2024, including the so-called “energy relief” payment, totals about 47% of the statutory amount compared to an average of 48% over the full period.

However, that analysis is only the starting point for calculating the impact of the PFD cuts on Alaskan families. As both the 2016 ISER and 2017 ITEP studies emphasized, and as ISER Professor Matthew Berman reiterated in his column last year, at a household level, the impact of the PFD cut is felt through its effect on overall household income. The lower the income, the more the PFD – and therefore the more PFD cuts – matter.

Using the most recent measure of Alaska household income by income level available – the calendar year 2021 income statistics from the Internal Revenue Service (IRS) – we have calculated the impact of the 2024 PFD cuts (or, as Professor Berman calls them, the “tax”) by income bracket.

To do that, we start by taking the average Alaska household income reported by the IRS for each income bracket for which it provides data for 2021 and adjusting that to projected 2024 levels using a compound annual growth rate (CAGR) of 2.5%. Some might argue we should use different escalation factors by income bracket because, in past years, income growth in Alaska’s upper-income brackets has far exceeded that in the lower-income brackets. However, we have forgone that step because it wouldn’t have a material impact over the short time frame for which we use the escalation adjustment.

After that, we calculate the impact by income bracket by increasing the resulting household income by the level of the PFD cut – so that household income reflects what it would have been at a full PFD – then dividing the level of the PFD cut by the resulting household income, reflecting the impact of the cut as a share of household income. In calculating the adjustment, we use the average household size – the number of recipients – in each income bracket calculated from the IRS data. That recognizes that, in Alaska, households at higher income levels tend to be larger – have more recipients – than those at lower income levels.

Here is the result:

Each quartile contains one-quarter – about 81,000 –  of Alaska’s 323,074 households. As the chart shows, within the Top 25% of Alaska households – the quarter of Alaska households with the highest income – the average income at a full PFD is $253,183. Using PFD cuts to fund state government reduces that income by $5,039, or 2.0%.

Using the same breakdown as the IRS, the left columns show the impacts among the Top 10%, Top 5%, and Top 1% of Alaska households. Understandably, as income rises, the impact of using PFD cuts falls. At the average income of the Alaska households with the highest 5% of incomes, for example, PFD cuts to fund state government only reduce income by 0.8%. At the average income of those in the Top 1%, using PFD cuts only reduces income by 0.3%.

The reverse is true, however, as the focus moves down the income scale. For example, within the quarter of Alaska households in the Upper Middle-Income bracket, the average income at a full PFD is $87,497. Because of the smaller household size, using PFD cuts to fund state government only reduces that income by $3,973. However, because of their lower overall income, that still represents 4.5% of total household income.

Again, because of smaller household sizes, using PFD cuts to fund state government only reduces the average income of the quarter of Alaska households falling in the Lower Middle-Income bracket by $3,295. However, because of their lower overall income, that still represents 7% of total household income.

And while the $2,713 reduction in the average income of the quarter of Alaska households falling in the Lowest 25% is lower than in any other bracket, because of their lower overall income, using PFD cuts to fund state government reduces overall income by 14.8%, far more significant than for any other bracket.

In short, as the mantra goes, by using PFD cuts to fund state government, the Legislature is using an approach that takes more as a share of income from Alaska households – indeed, much more – the less the household makes. Again, to reference Professor Berman, the approach is “the most regressive tax ever proposed.”

For context, we also have included on the chart the level of take that would result if all Alaska households contributed the same share of household income toward the costs of state government. That level – 3.6% of household income – is reflected on the chart as a gold dashed line. Using it would raise the same overall amount – $1.24 billion – as using PFD cuts, but in a much more distributionally neutral way. Government action wouldn’t decide winners and losers; all Alaska families would contribute the same.

While using that approach, those in the Top 25% would pay slightly more as a share of income than they do using PFD cuts, the remaining 75% of Alaska families – the 50% in the middle-income brackets and the 25% of those in the lowest bracket – would pay less. Most importantly, unlike as occurs using PFD cuts, no Alaska household would be required to contribute any more toward the cost of state government than any other.

Instead of a mantra of “the less you make, the more we take,” using an average rate approach would result in a mantra of “we take the same share of income to pay for Alaska government from all Alaska families, regardless of whether they are rich, poor, or in between. They all have the same skin in the game. Unlike in the past, we no longer favor the rich over working-class families.”

Alaskans should be aware of the impact of the current approach and options to change it. Alaska’s politicians and the Alaska media should play a significant role in informing them of both.

Brad Keithley is the Managing Director of Alaskans for Sustainable Budgets, a project focused on developing and advocating for economically robust and durable state fiscal policies. You can follow the work of the project on its website, at @AK4SB on Twitter, on its Facebook page or by subscribing to its weekly podcast on Substack.

A member of Congress from Alaska voted against a bill allowing parents to access the curriculum at their children’s school while accepting thousands from groups that support schools hiding gender identity from parents.

Democratic Rep. Mary Peltola voted against the Parents Bill of Rights Act in March 2023, which would have required schools to allow parents to inspect curriculum and library books; to obtain parental consent before letting a child socially transition at school; and to inform parents of violent activity at school.

Aimed at protecting the right of parents to guide their children’s education, the Parents Bill of Rights passed the U.S. House of Representatives on March 24 on a 213-208 party-line vote. Peltola was one of the 208 Democrats who voted against parental transparency in education.

Peltola has received more than $40,000 from far-left groups’ political arms that support schools socially transitioning kids and giving kids access to sexually explicit library books, like the National Education Association, American Federation of Teachers, and Human Rights Campaign.

Since 2022, Peltola has accepted $20,000 from the PAC of the far-left National Education Association, which also opposed the Parents Bill of Rights. The NEA, America’s largest teachers’ union, recommended that teachers assign “Gender Queer” as summer reading even though the comic book style novel graphically depicts gay sex.

Peltola has received $15,000 from the American Federation of Teachers’s AFL-CIO Committee on Political Education since 2022. AFT President Randi Weingarten said the Parents Bill of Rights “would require schools to divert their limited resources from teaching, censor education, ban books, and harm children who are just trying to be themselves and live their lives in peace.”

The Alaska Democrat also has taken $6,000 from the Human Rights Campaign Fund. The Human Rights Campaign supports irreversible transgender medical interventions for children and peddles the lie that children are less likely to commit suicide if they transition.

The Human Rights Campaign’s Welcoming Schools Program trains elementary school teachers on “creating LGBTQ+ and gender inclusive schools.”

Last summer, Peltola took to X to urge followers to donate to Identity, which helps children get sterilizing hormone treatments and irreversible transgender surgeries.

“Many people feel alienated from their bodies during puberty under the best of circumstances, and for children who are trans* and aware of their sex incongruence, being forced to undergo puberty and have their bodies change into the wrong sex is devastating,” Identity’s website says, promoting puberty blockers for children.

Peltola became the representative of Alaska’s singular congressional district after beating former Gov. Sarah Palin and small business owner Nick Begich in a ranked-choice voting election in 2022.

She will face Begich again in November.

The Alaska congressional race could determine whether Republicans or Democrats control Congress in 2025. Peltola’s race is a key toss-up election, according to the Center for Politics.

Begich told The Daily Signal that his opponent, Peltola, is on board with the Biden-Harris administration’s plans to push gender ideology into the classroom, “forcing teachers to push concepts that are neither rooted in science nor basic logic.”

“Parents trust the school system to educate and protect children while at school, not indoctrinate them in the latest leftwing political fads,” Begich said. “Congresswoman Peltola has been part and parcel with this agenda, voting against the Parents Bill of Rights and even encouraging Alaskans to donate to organizations that support so-called ‘gender transitions’ for children.”

“Parents should have a right to access their children’s curriculum, receive full transparency from the school system, and continue to be the ones responsible for raising their children,” Begich added.

Cindy Glassmaker, an Alaska mother of three girls,was disappointed in her congresswoman’s vote against the Parents Bill of Rights.

“To me, being a parent means having a say in decisions that affect our children until they reach 18,” Glassmaker told The Daily Signal. “I believe our congresswoman should be advocating for greater parental involvement, fostering a partnership between parents and schools to prioritize the well-being of our students.

“I am outraged that she accepted significant donations from anti-parent groups that support schools keeping gender identity issues hidden from parents,” Glassmaker continued.

Peltola told Anchorage Daily News she voted against the Parents Bill of Rights to protect students’ “right to privacy.” The bill prohibits schools from hiding student gender identity from the parents.

“The reason I did not vote for this particular bill, is because I feel like students should have some right to privacy,” Peltola said in 2023. “And I think they should have a right to feel safe at school.”

Peltola did not respond to The Daily Signal’s request for comment about her position on parental rights.

Alaska mother and Anchorage Moms for Liberty Chair Gabby Ide told The Daily Signal she feels Peltola doesn’t stand up for her rights as a parent.

“Mary Peltola isn’t looking out for Alaska’s families,” Ide said. “She voted against the Protection of Women and Girls in Sports Act of 2023. She co-sponsored the Equality Act, which would allow males in female locker rooms and bathrooms. When she does vote, she appears totally out of touch with parents’ desire for accountability in education results and our fundamental right to direct the upbringing of our children.”