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Opinion: Homework for Alaska: Sales tax or income tax?

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Opinion: Homework for Alaska: Sales tax or income tax?


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This is a tax tutorial for gubernatorial candidates, for legislators who will report to work next year and for the Alaska public.

Think of it as homework, with more than eight months to complete the assignment that is not due until the November election. The homework is intended to inform, not settle the debate over a state sales tax or state income tax — or neither, which is the preferred option for many Alaskans.

But for those Alaskans willing to consider a tax as a personal responsibility to help fund schools, roads, public safety, child care, state troopers, prisons, foster care and everything else necessary for healthy and productive lives, someday they will need to decide on a state income tax or a state sales tax after they accept the checkbook reality that oil and Permanent Fund earnings are not enough.

This homework assignment is intended to get people thinking with facts, not emotions. Electing the right candidates will be the first test.

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Alaskans have until the next election because nothing will change this year. It will take a new political alignment led by a reality-based governor to organize support in the Legislature and among the public.

But next year, maybe, with the right elected leadership, Alaskans can debate a state sales tax or personal income tax. Plus, of course, corporate taxes and oil production taxes, but those are for another school day.

One of the biggest arguments in favor of a state sales tax is that visitors would pay it. Yes, they would, but not as much as many Alaskans think.

Air travel is exempt from sales taxes. So are cruise ship tickets. That’s federal law, which means much of what tourists spend on their Alaska vacation is beyond the reach of a state sales tax.

Cutting further into potential revenues, state and federal law exempts flightseeing tours from sales tax, which is a particularly costly exemption when you think about how much visitors spend on airplane and helicopter tours.

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That leaves sales tax supporters collecting from tourists on T-shirts, gifts for grandchildren, artwork, postcards, hotels, Airbnb, car rentals and restaurant meals. Still a substantial take for taxes, but far short of total tourism spending.

An argument against a state sales tax is that more than 100 cities and boroughs already depend on local sales taxes to pay for schools and other public services. Try to imagine what a state tax piled on top of a local tax would do to kill shopping in Homer, already at 7.85%, or Kodiak, Wrangell and Cordova, all at 7%, and all the other municipalities.

Supporters of an income tax say it would share the responsibility burden with nonresidents who earn income in Alaska and then return home to spend their money.

Almost one in four workers in Alaska in 2024 were nonresidents, as reported by the state Department of Labor in January. That doesn’t include federal employees, active-duty military or self-employed people.

Nonresidents earned roughly $3.8 billion, or about 17% of every dollar covered in the report.

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However, many of those nonresident workers are lower-wage and seasonal, employed in the seafood processing and tourism industries, unlikely to pay much in income taxes. But a tax could be structured so that they pay something, which is fair.

Meanwhile, higher-wage workers in oil and gas, mining, construction and airlines (freight and passenger service) would pay taxes on their income earned in Alaska, which also is fair.

It comes down to what would direct more of the tax burden to nonresidents: a tax on income or on visitor spending. Wages or wasabi-crusted salmon dinners.

Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal public policy work in Alaska and Washington, D.C. He lives in Anchorage and is publisher of the Wrangell Sentinel weekly newspaper.

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Senate committee strips homeschool funding overhaul from education bill, adds one-time ‘energy relief’ funding

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Senate committee strips homeschool funding overhaul from education bill, adds one-time ‘energy relief’ funding


Sen. Löki Tobin, D-Anchorage, talks with colleagues on the Senate floor on Jan. 22, 2025. (Marc Lester / ADN)

JUNEAU — The Alaska Senate Education Committee on Monday replaced a school funding bill introduced in March with a new version that strips out a controversial overhaul of publicly funded homeschooling programs.

The new version instead would require more legislative oversight over Alaska’s correspondence education programs, and removes additional correspondence funding in favor of broader one-time education funding measures.

The bill now includes a $58 million one-time school energy relief payment to offset high fuel prices, and a bump to student transportation funding. It still includes incentive grants for districts where students improve reading proficiency under the Alaska Reads Act.

Sen. Löki Tobin, an Anchorage Democrat and chair of the Senate Education Committee that sponsored the bill, said that removing the most controversial parts of the bill — how correspondence programs are funded — makes the bill more straightforward.

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“I think the part that was most infuriating was the mis- and disinformation that was promulgated by certain entities that the outreach we received would talk to components or pieces that weren’t in the legislation at all, or the legislation didn’t do what they were claiming it did,” she said in an interview Tuesday.

She said the “deep trove of mal-information” created a response and pushback she “was unwilling to continue to bear.”

The bill originally sought to funnel funding for homeschoolers through the school districts in which they reside, potentially with significant impacts to large correspondence programs that are administered by rural school districts. That funding change came alongside a 10% increase in per-student funding for correspondence students overall. Both of those elements are removed from the new version of the bill.

There are over 30 correspondence programs enrolling more than 24,000 students across Alaska, as of last year. More than half of those students were enrolled in correspondence programs administered by districts outside of the district where they reside.

That includes programs like IDEA, run by the Galena City School District, the state’s largest correspondence program. IDEA serves over 7,000 students statewide.

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Superintendents and families of correspondence students pushed back against the original bill, saying that it represented an existential threat to correspondence programs. The bill received hundreds of letters and public testimony opposing the changes to correspondence funding.

The new version of the bill removes some of the bill’s most controversial aspects.

Jason Johnson, the superintendent of the Galena City School District, sent an email to IDEA families prior to the bill’s first hearing urging them to contact their representatives to oppose the bill and asserting that under the bill as written, correspondence programs would receive zero state funding.

Tobin said in an interview in March following the influx of opposition that the bill would not have diverted all state funding away from correspondence programs.

Johnson said as of Tuesday morning, he had not yet reviewed the new version of the bill.

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Homeschool reporting requirements

The new version of the bill requires that Alaska school districts provide an annual report to the Legislature with details on the correspondence programs they operate, including how much money the district provides to students in the programs, how many students are in the programs, where those students live, what the allotments are used for, and more.

The new reporting requirements mirror those included in a 2024 bill that called for a one-time report to the Legislature on correspondence allotment spending.

At the time, state spending on homeschooled students was scrutinized following litigation challenging a practice by some Alaska families — including that of former Attorney General Treg Taylor — to subsidize tuition in private Christian schools using public correspondence school allotments.

Tobin said last year that the 2024 report revealed there is “just a lot we don’t know about how public dollars are being used.”

A much larger percentage of students in non-correspondence schools take AK STAR state standardized tests compared to those in correspondence programs. Correspondence programs often see lower graduation rates than standard public schools in Alaska.

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Families whose students are enrolled in IDEA, for example, receive an allotment of $2,700 per student per year, according to IDEA’s website. There is little clarity or government oversight on how that money can be spent. A pending lawsuit will answer whether or not correspondence allotments can cover the cost of tuition at a private school.

Tobin says these discrepancies and outstanding questions call for more state oversight on correspondence programs.

“We’re asking for all that information because it’s difficult, as we’ve learned, to create good public policy that helps support our correspondence students, if we don’t have the information that is needed to inform how that policy is created,” Tobin said.

Education funding prospects

The committee substitute to the Senate bill also cuts the $125 increase to the state’s annual per-student formula funding, intended as inflation-proofing in the bill’s original version, which would have raised the Base Student Allocation from $6,660 to roughly $6,785.

Tobin said removing the increase to annual per-student funding in favor of a one-time payment is more politically feasible in the Legislature this session.

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“Whether it’s inflationary or it’s additional funds for this year, there is a disinterest in increasing the Base Student Allocation this cycle, and so we’re trying to figure out other ways that we can target funding and support students and communities and schools,” Tobin said Tuesday. It is unlikely that the Legislature can muster the votes needed to override a governor’s veto of additional education funding, she said.

Tobin also said she thinks one-time funding is more likely to get the governor’s signature. The Legislature narrowly voted last session to override Gov. Mike Dunleavy’s veto of an increase in the Base Student Allocation.

But Alaska’s public schools still say they don’t have the money they need, with districts such as the Anchorage School District voting to close schools and reducing staff positions and programs to mitigate severe deficits.

The latest version of the Senate bill is in conflict with a spending plan adopted by the House this week.

The House operating budget calls for adding $147 million in one-time funding for K-12 school operations along with nearly $11 million in new funding for student transportation. The House figure, majority members say, is needed to make up for years of inflation.

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That funding in the operating budget was included to guarantee some additional education funding this year. During debates on the House floor, members of the Republican minority repeatedly spoke out against one-time spending on education, including arguments that they wanted a more specific plan for how the funds would be used and that it could lead districts to expect funding to continue at that level in future years.

The Senate bill proposes to increase student transportation funding by roughly $15 million, distribute just under $59 million in energy relief payments to K-12 schools, and spend around $22 million on incentive payments for reading improvement.

All told, the Senate proposal calls for close to $100 million in new education spending, far below the amount identified by the House.

Daily News reporter Iris Samuels contributed to this report.





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Alaska AG Enters Into $800K Settlement With Car Dealer Group (via Passle)

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Alaska AG Enters Into 0K Settlement With Car Dealer Group (via Passle)


Last month, Alaska Attorney General Stephen J. Cox announced that his office entered into a settlement with a group of Swickard car dealerships, resolving false advertising allegations against the dealers.  As part of the settlement, the dealers agree to pay a civil penalty of $800,000.  

The Alaska AG alleged that the dealers engaged in bait and switch advertising by promoting vehicles that were not actually available for purchase in order to draw customers to its lots.  The AG also alleged that the dealers refused to honor advertised prices, requiring customers to purchase expensive dealer add-ons.  

In announcing the settlement, Cox said, “Car dealers don’t get to advertise one price and charge another—or advertise cars that aren’t really there.  That’s a bait-and-switch, and it’s unlawful. Alaskans already face higher costs than most—this settlement holds Swickard accountable and reinforces that the price you see should be the price you pay.”

Interestingly, the consent decree includes a provision that says that if the dealers engage “in a reckless violation or persistent violations” of Alaska’s consumer protection laws in the future, the court may impose an additional penalty of up to $200,000. 

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This enforcement action is yet another example of the heightened scrutiny that car dealer advertising is under right now.  Earlier this month, the Federal Trade Commission settled a similar action.  And, in March, the FTC sent warning letters to nearly 100 car dealers. 



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Palmer high school robotics team makes Alaska history with regional win

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Palmer high school robotics team makes Alaska history with regional win


ANCHORAGE, Alaska (KTUU) – Palmer’s Colony High School Northern Knights Robotics won the First Robotics Competition (FRC) regional championship on April 4, becoming the first team from Alaska to win the title.

The Northern Knights’ business manager, sophomore Carter Fickes, said that the FRC is one of the most prestigious robotics competitions in the world.

“The game elements are a lot bigger,” he said.

“There’s a lot of more coding challenges as well, because you have what is called an autonomous period where your robot’s running strictly on code, and then you have a teleop period where it’s driver controlled.”

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According to Fickes, the regional competition in Minneapolis saw the team paired with and against groups from Minnesota, Illinois, the Czech Republic, Japan, and China.

Teams were required to make “alliances” with each other, before competing together in the quarterfinals.

“Being collaborative with other teams and being open to their strategy is great.” he said.

“We were telling them our main marketing strategy was ‘we’re flexible, and if you want us to do something, we can do it.’”

Fickes told Alaska’s News Source that the competition required teams to program and direct their robots to shoot balls towards targets in order to score points.

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The Northern Knights programmed their 85-pound robot to focus on defense, blocking shots from the opposing team.

“Our alliance partners had semi-automatic turrets that could shoot like hundreds of balls in a minute,” he said.

“We were blocking the other robots from getting on the other side and scoring fuel.”

Fickes said this was the first year that their team was selected to be a part of an alliance.

After the quarterfinals, the Northern Knights went on to dominate the rest of the competition.

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“We were untouched,” he said.

“We were outscoring them by 200 points, and then the finals matches, I think it ended up being like 400 to 200 or 300.”

By winning both the finals match, as well as the Rookie Team of the Year award, the Northern Knights earned themselves a ticket to the FRC Worlds Competition in Texas beginning on April 29.

“Our mentality is kind of like, ‘we’ve made it this far, so why not try our best?’” he said.

“If we don’t win the whole competition, it’s not the end of the world. A team from Alaska has never done this before, and if we like our goal is to win and to qualify and do good.”

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Unlike many other robotics teams across the country, Ficker said the Northern Knights are entirely funded through private donations.

“We built our robot in our team captain’s basement. He let us use his house, and we spent hours upon hours upon hours in his basement building and testing.”

See a spelling or grammar error? Report it to web@ktuu.com



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