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OPINION: Alaska should consider a state income tax

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OPINION: Alaska should consider a state income tax


There is clearly a need for improved public services throughout Alaska, and for this, we must establish a new dependable source of state income.

Recently, the ADN highlighted the fact that the state is losing working-age residents, creating a shortage of workers in Alaska, and stunting local economic growth. Alaska’s state demographer, David Howell, says that a key factor is simply the healthy labor market outside. People are leaving Alaska for better jobs.

However, others argue that another big factor is underfunded community services, especially public schools, and preschool child care. Unless legislators take strong action to reverse this trend by finding the necessary revenue to pay for these services, our shrinking population could become a self-perpetuating cycle with a major effect on the state’s economy. Businesses close, then others close because the population continues to shrink, and so on into the grim future.

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Recently the UAA’s Institute of Social and Economic Research projected that this year, essential state expenditures could cost up to $800 million more than state income. This should be particularly shocking to legislators who have listened to the raucous rallies supporting an increase in the school system’s basic allowance per student, or BSA.

It does appear that there is growing legislative recognition of this dire situation. Last session several legislators showed political bravery and introduced bills proposing new sources of revenue. To his credit, at one time Gov. Mike Dunleavy proposed a special session on Alaska’s fiscal future, noting that “everything is on the table.” Let’s hope this includes a reliable source of revenue that will result in consistent annual funding for high-quality schools, public safety, transportation and other public services that draw productive young people to Alaska and encourage them to stay here.

So far, proposals for new revenue sources have been for statewide sales taxes. But there are serious problems with this approach. A sales tax would be particularly costly for people living in the most remote, difficult to reach parts of Alaska, especially the small, isolated communities along the waterways of the western and northwest coast where prices are already high.

In addition, a statewide sales tax would be on top of sales taxes that already exist in more than 100 local jurisdictions. This may violate Alaska’s constitution, which prohibits an overlap of taxing jurisdictions.

So, let’s consider a graduated income tax based on a percentage of a person’s federal income tax. There is an essential fairness about a tax that is structured so payment comes from those who are most able to pay, and people with low to moderate incomes are spared. Levying the tax on temporary residents, summer tour guides, for example, is also fair. They use roads and transportation and benefit from state services while they are here.

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Most of the outside states use the income tax system in some form. Alaska residents pay taxes to other states where they earn income. Many Alaskans own income-producing property in another state and pay taxes accordingly — but currently, this is a one-way street.

Historically, as a territory and then as a new state, Alaska relied on a personal income tax to pay for public services. In 1949, residents and nonresidents of the Territory of Alaska paid 10% of their federal income tax for territorial services. After statehood in 1959, the system continued, and the amount was increased to 16% of federal taxes. Though the state switched to a graduated structure independent of federal income tax rates, the amount of revenue was relatively unchanged.

The personal income tax served the state well as it developed a needed array of state services, but after the Prudhoe Bay oil boom, it was repealed in 1980.

At a conference in 2004, shortly before his death, former Gov. Jay Hammond argued strongly for restoration of a state income tax, saying that his biggest mistake as governor was not having vetoed the bill that repealed the income tax in 1980. In many ways, Jay Hammond, a Republican, was our greatest governor, caring deeply for our state and the provision of excellent state services. I expect he would have shared the enthusiasm of the raucous educators rallying to support an increase in Alaska’s basic student allowance.

Janet McCabe and her husband David came to Alaska in 1964. She is a graduate of Harvard’s Kennedy School of Government and a member of Alaska Common Ground and Commonwealth North.

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The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.





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Alaska Senate bill spurs debate over funding of homeschool programs

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Alaska Senate bill spurs debate over funding of homeschool programs


(iStock / Getty Images)

JUNEAU — Lawmakers in the Alaska Senate have introduced an omnibus education bill that would overhaul the administration of publicly funded homeschooling programs.

Senate Bill 277, introduced last week, would increase Alaska’s annual $1.3 billion public school budget by roughly $100 million by adjusting the annual budget for inflation, adding new reading proficiency grants and boosting spending on student transportation.

It would also make changes to the state’s subsidized homeschooling system, for which the bill drew swift criticism.

Under the bill, correspondence programs — which provide cash allotments to the families of homeschoolers each year — would receive tens of millions of dollars in additional annual funding, a change that homeschooling proponents have long sought. But the state would require that funding to be funneled through students’ home districts.

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Alaska last year had over 24,000 students enrolled in more than 30 correspondence programs. Of those, nearly 16,000 students were enrolled in correspondence programs administered by districts other than the ones in which they resided.

Tens of millions of dollars in state funding are diverted annually to districts that administer statewide homeschooling programs.

Some educators have raised alarm over the diversion of public funds from students’ home districts, especially after correspondence programs grew in popularity during the coronavirus pandemic.

Under the Senate bill, the correspondence students’ funding would first flow to the districts in which they reside, which would then be required to enter into cooperative agreements with the districts that administer the correspondence programs.

Under these agreements, the home district would retain a percentage of the students’ funding to pay for administrative costs, as well as additional costs for students to access other in-person classes or services, such as sports teams.

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The bill could potentially increase funding substantially in districts where thousands of correspondence students live, including in Anchorage, Fairbanks, the Matanuska-Susitna Borough and the Kenai Peninsula.

The bill would increase overall state spending on education by $100 million annually, including a $25 million increase in per-student formula funding for correspondence students; $4.8 million for student transportation costs; and $22 million for grants to incentivize reading proficiency. The bill would include a modest increase to per-student formula funding, raising the Base Student Allocation by about $125, from $6,660 to roughly $6,785.

The proposed funding boost is meant to keep up with inflation, said Sen. Löki Tobin, an Anchorage Democrat and chair of the Senate Education Committee. Inflation-adjusted spending on education has dropped in the past decade.

Sen. Löki Tobin, D-Anchorage, right, listens during a Senate majority news conference at the Alaska State Capitol in Juneau on Jan. 20. (Marc Lester / ADN)

Even after the Legislature pushed through last year’s $175 million education funding increase, school districts across the state face multimillion-dollar budget deficits going into next school year. The Anchorage School District, in response to a $90 million deficit, passed a budget last month including school closures, increased class sizes and cuts to staff.

Correspondence funding a central debate

Some of the most substantial and controversial changes in the bill are around how correspondence programs are funded.

Correspondence programs originated in the state’s territorial days, when students in remote areas would correspond with educators in a central program by mail. The system today allows students from across the state to enroll in district-run homeschool programs, and receive an annual allotment of public funds to cover educational materials, classes and activities.

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Homeschooling programs have faced increased scrutiny in recent years after a lawsuit challenged the use of correspondence allotments to cover the cost of tuition in Christian private schools. That litigation is ongoing.

The bill’s changes would apply, for instance, to Galena City School District’s IDEA, the state’s largest correspondence program. IDEA enrolls more than 7,000 students across the state, ranking Galena among some of the largest districts across the state, measured by attendance. As of last school year, only one of those students lived in Galena, a village of roughly 500 residents.

At a Senate Education Committee meeting Wednesday, Tobin said that requiring correspondence students to enroll in the district where they live addresses concerns from school districts that offer services for those students but are struggling to keep their facilities and services open — making choices between whether they close pools or cut middle school sports, for example.

“The hope for this is to continue to support our brick-and-mortar schools and then also recognize that they are also providing services, sometimes, to students who aren’t enrolled in their district, and to ensure that there is no loss of that ability to continue to offer those services or any costs that shifted onto the family,” Tobin said.

Tobin said increasing the BSA for correspondence students, alongside funneling more money into students’ home districts, would allow for those students to continue their state-funded correspondence education while utilizing services and programs offered by their local school district.

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In its first week, however, the bill has garnered significant pushback from correspondence families and programs, many of whom asserted the bill is a threat to their programs.

Galena City School District superintendent Jason Johnson said he believes the bill poses an existential threat to correspondence programs. While there is an 8% cap on administrative fees in the bill, he said the lack of a cap on fees levied for education services leaves local districts able to charge unchecked amounts from correspondence students’ BSAs.

In an email to IDEA families supplied by Tobin’s office, Johnson called for parents to write to lawmakers in opposition to the bill, stating that if SB 277 remains, “most Alaskan statewide correspondence programs will sink and Alaskan families will suffer the loss of Alaska’s current robust school choice options.”

Tobin in an interview Thursday contested the presumption that local districts can charge correspondence programs 100% of state funding, calling it “ill-placed.”

She pointed to the requirement for a collaborative agreement, a process overseen by the state education department, that she said would stop local districts from taking more than would be needed to cover costs of what correspondence students utilize at the local district.

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North Pole resident Kendra Piper, parent of a correspondence student, testified in opposition to the bill Wednesday. She said that more than just the dollar amount, the bill ties correspondence students closer to the school districts they’ve stepped away from.

“SB 277 shifts funding and control back towards the very districts that many families like mine have chosen to leave. Even if it’s described as a small change, the reality is that it weakens the idea that funding should follow the student fully,” Piper said.

Sen. Rob Yundt, a Wasilla Republican and Education Committee member who took part in drafting the bill, said part of his support for the bill is rooted in the increasing per-student state funding for correspondence students.

“For a long time, folks have wanted to see this increase,” Yundt said. “I don’t think anybody wants to hear that their child’s not a whole child, that they’re only 90% of a child.”

Senate Education Committee member Jesse Kiehl, a Juneau Democrat, took issue with that characterization.

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“What we do here in this section we’re talking about is pump additional cash into providing correspondence study. That’s a policy decision the Legislature may make, but it’s got nothing to do with the value of a child,” Kiehl said.

Kiehl questioned whether it costs the same amount to fund education for a homeschooled student as a brick-and-mortar school student.

“Are we paying the amount we need to educate the child in that way?” he said.

Yundt said at the Wednesday meeting that the committee is already weighing feedback to draft another version of the legislation.

Tobin told reporters earlier this week that the bill represents perspectives from both caucuses.

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Tobin implied that, in working with the Senate minority and the House, she hopes the bill will garner enough support to withstand a potential governor’s veto.

Yundt told reporters earlier this month that correspondence funding and reading grants were two top priorities for the minority.

House Minority Whip Justin Ruffridge, a Soldotna Republican, said Thursday that he has not yet reviewed the bill.

Jeff Turner, a spokesperson for Gov. Mike Dunleavy, said the governor had no comment on the bill at this time.

House bills call for broader funding

Other bills in the Legislature this session seek to increase funding streams for Alaska public schools, including raising per-student funding and changing how and when attendance is calculated.

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The House Education Committee introduced a bill earlier this month to increase the state’s per-student funding for schools.

House Bill 374 seeks to increase the Base Student Allocation by $630, an increase from $6,660 to $7,290 per student per year. That amounts to an estimated $158 million increase in yearly funding.

House Education Co-Chair Rebecca Himschoot, a Sitka independent, said lawmakers arrived at the $630 BSA increase by calculating what the five largest school districts by student count would need to have a balanced budget for fiscal year 2027.

Ruffridge was one of 10 minority members to vote to override the governor’s veto of the education formula boost last year. A member of the joint task force on education funding, he said he’s skeptical that the Legislature will have the same drive to get another similarly sized increase on the books this year.

“From my perspective, having been a part of the group that supported the largest BSA increase in Alaska history, I know that the efforts that we made to get there were extensive, and, you know, my sense of where we’re at right now is that it will be very difficult to repeat anything like that again,” Ruffridge said in an interview earlier this month.

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Another House bill seeks a different change to the education formula calculation.

Schools receive state funding based on the average daily membership of their school. That number is typically not finalized until the fall, leaving districts unsure how much money they will be getting from the state until just before the school year begins.

HB 261 aims to make education funding more predictable, says its sponsor, Juneau Democratic Rep. Andi Story, co-chair of the House Education Committee.

It would allow school districts to calculate their average daily membership based on the average from the last three years, or the most recent known student count period.

That bill would cost the state an estimated $147 million per year.

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Daily News reporter Iris Samuels contributed from Anchorage.





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Alaska Airlines, FedEx cargo planes narrowly avoid catastrophic crash while landing at Newark airport

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Alaska Airlines, FedEx cargo planes narrowly avoid catastrophic crash while landing at Newark airport


An Alaska Airlines aircraft nearly collided with a FedEx cargo plane during an aborted landing at Newark Liberty International Airport Tuesday evening, radar data shows.

Alaska Airlines Flight 294 was ordered to perform a go-around when FedEx Flight 721 was cleared to approach an intersecting runway for landing, the FAA said in a statement.

The passenger plane cleared the FedEx charter by as little as 300 feet — close to the length of the average American football field — data from FlightRadar24 indicated.

Two planes nearly crashed into one another at Newark Liberty International Airport on Tuesday. Luiz C. Ribeiro for New York Post

Air traffic controllers directed the Alaska flight to reroute just seconds before it was supposed to touch down, according to audio obtained by the same software.

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Michael McCormick, the former vice president of the FAA, told ABC 7 New York that the near-mishap came down to two intersecting runways.

“”It is a challenge for a tower controller to try to get that timing perfect, it doesn’t always work and that’s what happened in this case, so the tower controller waited and unfortunately, in my opinion, too long and they had to send the aircraft on a go-around,” McCormick said.

The FAA and the NTSB are probing the near crash.

The aircrafts came within a few hundred feet of each other. Flightradar

The ongoing partial government shutdown has caused significant staffing shortages at a several major airports across the country — with TSA workers currently not receiving pay.

White House economists estimated that the shutdown has caused upwards of $2.5 billion in losses.

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The air traffic controller ordered a go-around moments before the Alaska Airlines flight was set to land. dima – stock.adobe.com

Last week, Senate Democrats blocked a bill that would have restored funding to the DHS for the fourth time in the past month.

Delta Air Lines CEO Ed Bastian slammed Congress for the ongoing shutdown, calling politicians’ apparent refusal to settle the funding debacle “inexcusable.”

“We’re outraged,” Bastian seethed.

The partial shutdown entered its 33rd day on Thursday.

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Coast Guard investigating

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Coast Guard investigating


Two crew members of a tugboat were killed and two others were injured in what the Coast Guard described Wednesday as a “confined space incident” aboard a barge moored in southeast Alaska last weekend.

A Coast Guard news release provided limited details about what happened to the four, but said they were in a confined space aboard the freight barge Waynehoe on Sunday when other crew members from their tug, the Chukchi Sea, lost contact with them. The barge was moored about 25 miles northwest of Ketchikan.

The deceased crew members were identified as Sidney Mohorovich and Ben Fowler, according to the Coast Guard. Its news release didn’t identify the surviving crew by name. Coast Guard spokesperson Alexander Ransom later told the Associated Press in an email that both survivors were reported to be in good condition.

The parents of Mohorovich, 28, said they were told by Coast Guard officials there was methane gas present in the confined space.

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“We don’t know why the series of events that led to all the people being in the confined space, if they all like went down as a team or in separate stages,” Todd Mohorovich told the AP by phone from his home in Sedro-Woolley, Washington. “I have no information on that, but what I can tell you is that the confined space had high levels of methane gas in it.”

He did not know the source of the gas or why it was present. The Coast Guard did not immediately respond to an email seeking confirmation of the presence of methane gas.

Todd and Eva Mohorovich last spoke to their son Saturday night when he told them about impending bad weather. “He said that the barge was in a spot where they were going to be able to be sheltered from that storm,” Todd Mohorovich said.

This undated photo provided by the Mohorovich family shows Sidney “Sid” Mohorovich holding a fish in Deming, Washington.

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Mohorovich family via AP


The crew planned to perform normal deck duties to make sure everything was secured ahead of the storm.

Federal regulations define “confined space” on a vessel as “a compartment of small size and limited access such as a double bottom tank … or other space which by its small size and confined nature can readily create or aggravate a hazardous exposure.” That could include a lack of oxygen.

Watchstanders at the Coast Guard’s command center in Alaska’s capital Juneau received a mayday call at 9:14 a.m. local time Sunday, informing them that the crew of the Chukchi Sea had lost contact with the barge, the Coast Guard said. The tugboat crew recovered the body of one of the victims and helped both survivors escape the confined space while the Coast Guard was on its way to the scene.

The barge was then towed to Ketchikan, where the confined space “was able to be safely cleared for the recovery of the second deceased crew member,” Ransom told AP.

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The causes of death were not released, and the bodies were sent to Anchorage for autopsies.

“Our deepest condolences are with the families and colleagues of the crewmembers affected by this tragic incident,” said Capt. Stanley Fields, commander of the Coast Guard sector for Southeast Alaska, in a statement. “This is a heartbreaking reminder that confined spaces on vessels can contain extremely dangerous, invisible hazards.”

Sidney Mohorovich was one month into his new job with Hamilton Marine Construction.

The company didn’t return a message seeking comment.

Mohorovich, a large equipment mechanic, was on his first job in Alaska. He lived in Deming, Washington, with his fiancee ahead of their planned June wedding.

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He previously was a logger and welder, and before that he learned how to build houses and do electrical work. “He could pretty much figure anything out,” his mother said.

“He was loved by so many,” Eva Mohorovich said of her son’s outgoing personality. “Just an exceptional human being, smarty, witty, funny, loving.”

It was in his heart to lend a hand to people in need, and he was unselfish in so many ways, his father said.

“We’re just really thankful for who he was,” Todd Mohorovich said. “I wouldn’t change a thing in the life that we’ve all shared together, regardless of this the tragedy at this time. If we were to change something, it would lead to other changes that we don’t know about.”

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