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Opinion: Worried about Alaska’s budget crisis? Fix this obvious tax loophole.

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Opinion: Worried about Alaska’s budget crisis? Fix this obvious tax loophole.


The trans-Alaska pipeline winds through the landscape alongside the Delta River near Castner Glacier in March 2024. (Loren Holmes / ADN)

Alaska is facing a persistent budget deficit. The Anchorage Daily News recently reported that without additional revenue, the state could face a shortfall of over $650 million in the next two fiscal years. This isn’t a new problem; Alaska’s spending has exceeded its revenue almost every year since 2012. Alaska is also the only state that receives more funding from the federal government than it does from all of our internal revenue combined. Our legislators will have to choose between devastating cuts to education and other social services, imposing new taxes on Alaskans, repurposing PFD dividends, or fixing tax loopholes that benefit out-of-state billionaires.

The best choice is obvious. The Alaska Constitution instructs the Legislature to ensure that Alaskans get the “maximum benefit” from the development of our natural resources. Yet a special class of businesses — S corporations — has made billions from our public lands without paying state income taxes. The S corporation structure allows these companies to enjoy a single layer of tax through a personal income tax, like private businesses, while protecting themselves from liability, like a traditional corporation. In most states, S corporation owners pay a state personal income tax on their earnings. Other states without a personal income tax, like Texas, impose a franchise tax on S corporations. Alaska is one of only two states in the country that taxes traditional corporations but not S corporations (the other state, Florida, brings in revenue with a sales tax instead).

Fortunately, the Legislature appears poised to correct the S corporation tax loophole. Senate Bill 92 would impose an income tax on oil and gas S corporations operating in Alaska — traditional corporations already pay income taxes in Alaska. The bill would make a meaningful dent in our state budget deficit; the Department of Revenue estimated that SB 92 would bring more than $100 million per year through 2030. That money could fund public schools and critical infrastructure.

Instead, we are giving that revenue away to a billionaire in Texas. In 2020, affiliated S corporations, Hilcorp and Harvest Midstream, acquired all of British Petroleum’s Alaska assets — including its nearly 50% share of the Trans-Alaska Pipeline System. Tens of millions in annual corporate income tax revenue from BP disappeared. While we can’t recover that lost revenue, we can modernize Alaska’s tax code to accommodate the increasing proportion of S corporations in our oil and gas industry.

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Alaskans should also be frustrated by the way that the S corporation loophole diverts tax revenue from the state to the federal government. S corporations, like anyone else, write off state income taxes on their federal tax returns. Alaska’s nonsensical tax code means that S corporations pay more income taxes to the federal government while the state gets no revenue at all.

Oil and gas interests have suggested that the state will somehow bring in more revenue by not taxing S corporations. This is a misguided argument that has been proven wrong throughout Alaska’s history. It is foolish to assume that a large company with operations across the country would reinvest extra profits in Alaska. That company is just as likely to transfer the capital to projects in the Lower 48 or simply enrich its billionaire owner. The Legislature can guarantee investment in Alaskans by taxing S corporations and using the revenue to fund public services.

It is equally silly to argue that imposing an income tax would be unfair to S corporations. It is unfair that traditional corporations pay state income taxes while S corporations don’t! Nearly every other state in the country — red or blue — creates a level playing field for business by taxing S corporations. Changing Alaska’s tax code to reflect the national consensus is foreseeable and common sense.

An overwhelming majority of Alaskans in every region of the state — 77% on average — want Hilcorp to pay a state income tax. This unusual consensus reflects the clear right choice on this issue. Do the state legislators representing you care about fiscal responsibility, tax parity, and addressing our budget deficit? Consider giving them a call to find out and to express your support for SB 92.

Catherine Rocchi is the regulatory lead for the Alaska Public Interest Research Group, a nonprofit consumer advocacy group. She holds a bachelor’s degree from Dartmouth College, a law degree from Stanford Law School and a master’s from the Stanford School of Earth. Before joining AKPIRG, she worked as a law clerk at the Alaska Supreme Court.

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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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Opinion: Thanks to Alaska lawmakers for supporting public education

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Opinion: Thanks to Alaska lawmakers for supporting public education


Votes are displayed as a joint session of the Alaska Legislature overrode a veto by Gov. Mike Dunleavy on the education bill on May 20. (Marc Lester / ADN)

Dear members of the Alaska Legislature,

On behalf of the Anchorage School District, we offer our heartfelt thanks for your leadership in overriding the governor’s veto of House Bill 57.

We deeply appreciate and commend the bipartisan action — a powerful, united stand that reflects not only a shared commitment to sound education policy, but also to protecting Alaska’s students, supporting their future, and upholding the strength of our public schools. Your willingness to rise above partisanship in service of our students is leadership at its best.

Securing the 46 votes needed to override the veto was no small feat. Each of you came together to make a resounding commitment to public education. We are grateful for this historic vote — a result of more than a year of conversation, advocacy, and careful negotiation. The $700 increase to the Base Student Allocation represents the largest permanent increase in Alaska’s history, accompanied by high-impact policy reforms that were thoughtfully shaped with input from educators and communities across the state. This legislation is much more than a funding bill — it’s a promise to Alaska’s students, and we are profoundly thankful to the legislators who worked across party lines to make it a reality.

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[News coverage: Alaska lawmakers override Dunleavy’s veto of education bill]

We are also deeply grateful to the students, families, educators and community members who raised their voices in support of the override. Their advocacy was essential in moving this legislation forward and ensuring lawmakers heard the collective call for change.

Because of your leadership, ASD has started the process of restoring critical services and hiring teachers for the next school year. Though the threat of a veto to the education appropriation still looms, ASD is committed to moving forward, albeit cautiously, in service of our students and families. We understand that the decisions ahead will be difficult. As you work to develop and implement the sustainable, long-term fiscal plan our state urgently needs — one that ensures funding for the essential services Alaskans rely on — your commitment to bold action gives us hope.

We are proud to stand with you in support of strong, stable, and fully funded public education across Alaska.

Jharrett Bryantt is superintendent of the Anchorage School District.

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Carl Jacobs is president of the Anchorage School Board.

• • •

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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Gov. Dunleavy promised a fiscal plan. Alaska lawmakers aren’t so sure.

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Gov. Dunleavy promised a fiscal plan. Alaska lawmakers aren’t so sure.


Rep. Andy Josephson, D-Anchorage, packs papers into a box in his office at the Alaska State Capitol in Juneau on Wednesday. Josephson said he planned to take the ferry to Haines and drive home to Anchorage this week. The Alaska Legislature adjourned on Tuesday. (Marc Lester / ADN)

JUNEAU — On what would have been the 121st day of the first regular session of Alaska’s 34th Legislature, the co-chair of the House Finance Committee was wearing a Hawaiian shirt and piling paperwork into boxes.

Lawmakers had successfully adjourned on Tuesday, a day ahead of the constitutional deadline for the end of the first regular session, surprising even themselves after last year’s session ended one hour after the constitutional deadline.

“Yesterday was odd because we adjourned at 2 in the afternoon, and people started celebrating, but it’s like — ‘Wow, it’s daylight,’” Rep. Andy Josephson, D-Anchorage, said from his office Wednesday.

Lawmakers attributed their efficient passage of the budget and the relatively peaceful end of the session in part to the fact that the House and Senate are led by ideologically aligned majorities — something that hasn’t happened since 2016.

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“We meet regularly and pretty much are in agreement. So that’s been one of the greatest things this whole session, I think, is the closeness we‘ve had with the House majority,” said Senate President Gary Stevens.

Hanna Davis, of Juneau, a page, wipes down desks on the floor of the Alaska House at the Alaska State Capitol in Juneau on Wednesday. (Marc Lester / ADN)

The broad agreement between the House and Senate — which allowed legislators to pass a budget plan and adjourn around 1:30 p.m. Tuesday — stands in contrast to lawmakers’ deepening divisions with Gov. Mike Dunleavy.

Dunleavy’s discord with the Legislature was in stark relief when lawmakers overrode his veto of an education bill Tuesday morning, just hours before adjourning. It was the first time in more than 15 years that lawmakers had mustered the votes to override a governor’s veto.

The fissure between lawmakers and the executive extends beyond education policy, and it has increasingly been playing out openly in the halls of the Capitol, after several years in which Dunleavy repeatedly vetoed bipartisan bills and budget items and left lawmakers to debate contentious plans to address Alaska’s ongoing fiscal crisis without his involvement.

Now in his seventh and penultimate year as governor, Dunleavy is calling lawmakers to work with his administration on a fiscal plan based on a legislative package that he will introduce in the coming months.

“I’ve said to the Legislature, not just this year, but years past, let’s get together and put together a long-term, sustainable approach to fiscals, sideboards, growing the economy in Alaska, competing with other states for investments, and I’m going to actually put together a package for that in the coming year,” Dunleavy said in a press conference Monday.

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Gov. Mike Dunleavy speaks to reporters during a news conference at the Alaska State Capitol on Monday. (Marc Lester / ADN)

Dunleavy did not immediately provide details on what elements his fiscal plan would include. The announcement was met with some skepticism by legislative leaders, who said they wanted assurances from the governor that he would be directly involved in the talks.

“The administration has failed to invest early on, politically and intellectually, in overall fiscal policy,” said Josephson. “As a consequence, we‘re just standing in place.”

Dunleavy has not agreed to an interview with the Daily News, despite dozens of requests, since 2022. He declined another request Wednesday.

Dunleavy’s new call for a fiscal working group comes after lawmakers convened one in 2021 that failed to yield significant legislative changes.

To pay for basic state services that Alaskans have come to expect — like schools, troopers, roads and prisons — and still pay an annual Permanent Fund dividend, would require hundreds of millions of dollars more in dependable annual revenue than the state is currently bringing in, lawmakers have said.

Sen. Lyman Hoffman, a Bethel Democrat who has served in the Legislature for more than 38 years, said in February that Alaska is “probably facing its largest fiscal problem in 30 years.”

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After the House adjourned for the legislative session, Nellie Unangiq Jimmie, D-Toksook Bay, posed for photos with colleagues and danced outside the Alaska State Capitol on Tuesday. (Marc Lester / ADN)

In response, the Senate majority took the lead this year in advancing three revenue measures that they say will help begin to address the state‘s structural deficit — one to tax online enterprises, most of which are based outside the state; one to impose corporate income tax on privately held oil companies; and one to reduce the per-barrel oil tax credits. Only the first was adopted by the Legislature this year, while the other two are poised for consideration when lawmakers reconvene in January.

But Dunleavy has said he will oppose those stand-alone revenue measures, despite the fact that his own revenue commissioner told lawmakers in 2021 that he would support those measures as part of a broader fiscal plan. (The governor’s office has since disavowed the commissioner’s statements.)

Leaders in the House and Senate say they are open to hearing what the governor is proposing, but Dunleavy’s ideas — coming in the final year of his governorship — may be too little, too late for lawmakers who have for months been asking Dunleavy to be more involved in their fiscal negotiations.

“This is his legacy at stake,” said Sen. Bill Wielechowski, an Anchorage Democrat who has taken the lead in crafting some of the Senate‘s revenue proposals.

Dunleavy “is on the verge of being, categorically, without question, the worst governor in the history of our state,” Wielechowski added. “If he wants that to be his legacy, that’s his choice. If he wants his legacy to be that he ran on a full PFD and now the PFD is on the verge of disappearing, and he ran as the education governor and now our schools are in shambles, that will be his legacy. It is up to him how he wants to approach the upcoming vetoes and his last year in office.”

Dunleavy began his tenure as governor promising Alaskans that he would deliver statutory dividends by slashing funding for state services. Facing unprecedented pushback, Dunleavy changed tack, calling instead for a fiscal plan predicated on new revenue measures and sideboards on how that revenue could be used.

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Dunleavy called several special sessions in 2021 that yielded minimal results. At the time, Dunleavy unveiled a new dividend formula, which he has since abandoned. In 2023, Dunleavy decided against calling lawmakers into a special session amid divisions between the House and Senate leadership.

Sen. Mike Cronk, R-Tok/Northway, packs a suitcoat into a bin in his office at the Alaska State Capitol in Juneau on Wednesday. (Marc Lester / ADN)

During his tenure, Dunleavy repeatedly backed off the revenue measures he promised. A plan to create a statewide lottery was abandoned early in his tenure. A statewide sales tax was promised in 2023 but never materialized. A carbon sequestration measure was introduced in 2023, but has not yet yielded the billions of dollars in revenue that Dunleavy initially touted.

Dunleavy began this year by introducing a 10-year plan that projected $12 billion in new state debt by 2035, starting with a $1.5 billion deficit for the coming fiscal year. Asked in December about his vision for balancing the budget in the long term, Dunleavy made no indication that a fiscal plan would be introduced by his administration. Instead, he said he would look to the Legislature for ideas.

In the following months, Senate majority members doubled down on their efforts to both balance the coming year’s budget and to introduce revenue measures that they thought could be palatable to the governor.

“The Senate has been working quite a bit on revenue issues,” said Stevens. “The hope is that as time passes, there‘ll be support for additional revenue that solves a lot of the problems we are facing right now.”

The three revenue measures ultimately introduced in the Senate were taken from a list presented by Dunleavy’s former Revenue Commissioner Lucinda Mahoney in August 2021.

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That list included reducing the per-barrel tax credit; requiring all oil and gas companies to pay corporate income tax (eliminating a loophole that exempts Hilcorp from the tax); implementing a statewide sales tax; establishing legalized gambling in Alaska; implementing a tax on businesses that operate online, also called the “internet tax bill”; monetizing carbon offsets; and increasing motor fuel taxes, among other ideas.

“If the Legislature supports these measures, these are revenue measures that the governor supports as well,” Mahoney told lawmakers in August 2021. She resigned a year later, and Dunleavy has since distanced himself from some of the proposals, including the sales tax idea.

Dunleavy spokesperson Jeff Turner said earlier this year in an email that Mahoney “misspoke when she said the governor is willing to introduce a tax credit bill. That was not the governor’s plan.”

That has left lawmakers with limited willingness to take on politically risky revenue proposals — knowing that their efforts could be thwarted by Dunleavy’s veto pen.

“Unless the governor personally gets involved, but more importantly, puts political capital into making some hard choice, the whole thing will be for naught,” House Speaker Bryce Edgmon said Tuesday, shortly after the House adjourned.

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House Speaker Bryce Edgmon answers questions after the House adjourned on Tuesday. (Marc Lester / ADN)

Dunleavy on Monday promised to heed lawmakers’ request that he be actively involved in fiscal plan negotiations, but he also made light of the idea that his presence was necessary.

“I’ll be in the room. I’m willing to come in with a package, but there‘s also got to be agreement on sideboards, which is difficult for some folks,” Dunleavy said. Then he added, “I’m not the 61st legislator — Big Daddy, or whatever they want to call somebody — I am an executive. I’ve got a state to run. It’s a big state, so I can’t be here all the time.”





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Hammered by staffing cuts, Alaska’s national parks brace for millions of visitors

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Hammered by staffing cuts, Alaska’s national parks brace for millions of visitors



Staffing cuts at Alaska’s national parks will save taxpayer dollars. But also likely to limit land management, visitor experience.

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Staffing cuts at the National Park Service in Alaska will mean less oversight of wolves, whales, weather and fast-melting glaciers this summer. The cuts raise questions about the experiences that 3.3 million visitors will have in a state that’s home to half of all national park lands as the tourism and cruise-ship season ramps up.

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But for now, Fat Bear Week remains safe.

President Donald Trump has been slashing employment across the federal government as he makes good on his campaign promises to shrink bureaucracy and save taxpayer dollars. And Interior Secretary Doug Burgum has given Elon Musk’s DOGE team sweeping powers to cut or reallocate spending at the National Park Service in order to prioritize coal, oil and gas development.

Public lands advocates say the cuts imperil important work both on the frontlines and behind the scenes in managing public lands across the country, including in Alaska, which is home to 60% of all land under park service control.

When Trump took office, park service staffing was already 20% lower than in 2010, even though 2024 was the busiest year for park visitation in history, with 332 million visitors.

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Now, a first-of-its-kind analysis shows an estimated 60 staffers from the National Park Service’s regional offices in Alaska have departed under the Trump administration via firings, layoffs retirements and buyouts. The cuts represent about 33% of the regional staffing across Alaska, which is home to 54 million acres of park service land.

Overall National Park Service staffing changes are not publicly available, in part because the federal government exempted itself from regulations requiring private employers to disclose job-cut data.

Alex Johnson, the campaign director for the National Parks Conservation Association’s Arctic and Interior Alaska area said he’s worried the cuts will impact the public’s experience.

For many Americans, a visit to Alaska via a cruise remains a one-in-a-lifetime opportunity. Almost 60% of all tourists to Alaska arrive by cruise ship each year, according to state statistics, many of them traveling through Glacier Bay National Park or Kenai Fjords National Park before taking a scenic bus or train ride to Denali National Park.

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“There are so many people who dream of coming to Alaska for that national park experience, to see the bears, to see the glaciers, to see the caribou, and essentially at this point the park service doesn’t have the resources or expertise to maintain those landscapes,” Johnson said.

Impact of staffing cuts

The nonprofit NCPA cross-referenced a list of current employees with last year’s directory to help build the list of departed staff. Those approximately 60 departures do not include staffing reductions in the parks themselves, or regional IT or human resources employees whose positions have been centralized to the Interior Department. An Interior Department spokeswoman declined to comment on the staffing reductions.

The regional office departures include wildlife biologists, historians, fire ecologists, tribal liaisons and interpretive specialists. Also gone: the employee responsible for overseeing the service’s automated weather monitoring stations, which are heavily used by pilots across Alaska to plot safe flights.

The tally also does not include the current vacancies in the top spots of six Alaska national parks.

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In Alaska, the National Park Service manages an area larger than the entire state of Utah ‒ from renowned Denali National Park and Kenai Fjords National Park to the nation’s largest national park, the Wrangell-St. Elias National Park and Preserve, which alone is nearly the size of West Virginia.

The NCPA estimates that at least 2,5000 park service employees nationwide have left under Trump, in addition to the approximately 1,000 probationary employees who were summarily fired. Congress is currently debating a federal budget plan that could cut up to $1 billion from the National Park Service.

USA TODAY spoke with multiple park service employees in Alaska to confirm the numbers of departures and the impact those job losses are having.

One regional office staffer in Anchorage said they and their colleagues have been backing up all their data and writing down how they do their jobs. That way, said the staffer, who was granted anonymity because they fear for their job, said they want to ensure park service employees some years down the road will be able to understand the previous work. It’s equivalent, the worker said, to writing your own will.

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Short-term approach ‘will have an enormous financial impact on the communities’

Trump has promised to hire a more-than-normal number of seasonal employees to help ensure parks remain open for visitors. But current and former park service staffers who spoke with USA TODAY said those seasonal employees won’t be taking on long-term projects like tracking bears or monitoring receding glaciers.

Earlier this month, five former National Park Service directors, along with multiple other former park service leaders, warned that budget cuts risk violating federal law requiring the park service to protect its properties for future generations. Interior Secretary Doug Burgum has ordered current park service leaders to shift staffing to preserve visitor experiences, like keeping open visitor centers and campgrounds.

“…We fear that these messages will put NPS superintendents in a difficult situation when confronted with decisions necessary to protect the resources of the units of the National Park System,” wrote the former leaders, who served under both Democratic and Republic presidents.

“The crippling of our parks and public lands, and the threat to the future of the National Park System, will have an enormous financial impact on the communities that rely on parks and other public lands that support their economies,” they concluded.

One bright spot is Katmai National Park and Preserve, which appears to have largely been spared significant job losses, several park service experts said.

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Park officials confirmed to USA TODAY that they will continue running the wildly popular Fat Bear Week competition livestream, which last year drew 10 million viewers.

The livestream webcams at Katmai’s Brooks Falls area show brown bears ‒ the correct name for grizzlies living in coastal areas ‒ as they gorge on spawning salmon each fall in preparation for winter hibernation.



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