Revenue commissioner resigns to focus on ministry

(AP) — The commissioner of Alaska's Department of Revenue is resigning to focus on ministry work. Randall Hoffbeck's last day will be Aug. 17. Hoffbeck was one of the first appointments Gov. Bill Walker made after winning office in 2014. Hoffbeck was serving in Kenya with his wife on a short-term medical mission at the time. In his resignation letter, Hoffbeck says it is time for him to "complete the call to ministry God has placed on my heart." Hoffbeck says he had a sense of being done after the recent special session on oil and gas tax credits. He tells The Associated Press he didn't have the energy to gear up for the next fight. He says he regrets not being able to deliver a complete fiscal plan for Alaska. Deputy Revenue Commissioner Jerry Burnett will lead the department on an interim basis until Walker selects Hoffbeck's permanent replacement, according to a release from the governor's office.

Walker working on new tax proposal

(AP) — Gov. Bill Walker said Friday that he will probably run for re-election. But he currently has more pressing issues on his mind — including crafting a tax bill that he hopes will garner support from lawmakers. In a wide-ranging interview with The Associated Press, Walker said it's imperative that revenue issues be addressed this year. He expects to unveil a tax proposal for consideration sometime this year, but he could not provide a timeline for doing so or details on what the bill might include. He did say it would not be an oil tax bill. "Now that the session is out, we will look at all that has been discussed, what's been passed, what wasn't passed, input from the public — there's been lots of input — and come up with a revenue concept that we think is going to garner support from both the House and the Senate," he said. The Republican-led Senate earlier this year rejected a House-passed income tax. Asked whether he thought the Senate is interested in taxes, Walker said he heard occasional references from senators about the need for revenues. "I guess I'll find that out," he said. The state is grappling with a multibillion-dollar deficit amid continued low oil prices. Lawmakers funded this year's budget out of savings — something Walker had hoped to avoid — after they failed to come to terms on a long-term fiscal plan. Since then, two bond rating agencies have downgraded the state's credit rating. Walker, a Republican-turned-independent, said he's not sure how many letters the state needs to get from rating agencies to spur action. He gave lawmakers credit for their work in addressing an oil tax credit system that he said had become unsustainable and for coming together on their own to reach agreement on a state capital budget. Lawmakers passed the capital budget during a one-day special session on Thursday. "I applaud what they have done. But I'm also saying that we're not finished until we have addressed the additional revenue side," he said. Lawmakers can sort out at a later date a bill that would allow for structured draws from the earnings of the state's oil-wealth fund, the Alaska Permanent Fund, to help pay for government, he said. The House and Senate each passed versions of a permanent-fund bill, but they never reached final agreement. On the issue of health care, Walker said he hopes there will be an opportunity now for governors to work with the Trump administration and Congress to improve the existing law. High health care costs are a major concern for this remote state. Republicans in the U.S. Senate failed in their effort to repeal much of the law, with Alaska Sen. Lisa Murkowski one of three Republicans who helped sink the effort. Murkowski, like Walker, had been critical of the process by which the overhaul was pushed. That vote opened the door for more collaborative input, Walker said. Walker faces re-election next year. "I'm sure I'll run again," he said. Republican Sen. Mike Dunleavy of Wasilla is the highest-profile candidate so far to file a letter of intent to run for the office.

Capital budget finally passed

The Alaska Legislature has passed a state capital budget during a one-day special session. Lawmakers announced a compromise had been reached before convening Thursday in Juneau. Some minority House Republicans criticized the process as rushed and lacking in openness. The measure includes $20 million for oil and gas tax credits, which would bring the total for credit payouts to $77 million this year, the statutory minimum. It has another $7 million for a replacement school for rural Kivalina. It also includes $8 million for community assistance, which would bring that program's funding to $38 million. About $1.2 billion in federal money will pay for most of the budget package. Passage comes three months behind schedule. The capital budget had been a casualty of legislative bickering over the best way to address the state's multibillion-dollar deficit.

House majority files bill for income tax, use of Fund earnings

JUNEAU (AP) — A fiscal plan proposed by Alaska House leaders Friday would reinstitute a personal state income tax for the first time in decades and use earnings from Alaska’s oil-wealth fund to help pay for government. It’s not the first bill this session that would tap Alaska Permanent Fund earnings and change how the annual dividend that Alaskans receive from the wealth fund is calculated. But it’s the only one that has income tax provisions tacked on. While many legislators see some use of permanent fund earnings as inevitable as Alaska grapples with a multibillion-dollar deficit, an income tax could be a tough sell, particularly with the Senate’s Republican-led majority, which has said it would see securing additional budget cuts and the use of fund earnings as big wins this session. The bill, introduced by House Finance Committee, calls for annual draws from permanent fund earnings of 4.75 percent of an average of the fund’s market value. One third of the draw would pay for dividends. The rest would go to the state treasury. While the fund’s principal is constitutionally protected, its earnings, from which dividends are derived, can be spent, if lawmakers choose. Under the new House bill, committee co-chairman Rep. Paul Seaton, a Homer Republican, said dividends are expected to start out at about $1,100. Dividends hit an all-time high of $2,072 in 2015, but they were slashed to $1,022 — about half of what they otherwise would have been — by Gov. Bill Walker last year after lawmakers failed to pass a deficit-reduction plan. Seaton sees the approach in House Bill 115 as simpler than one proposed by Walker, which calls for a higher draw from the oil-wealth fund and would base a portion of the dividend on a share of state mineral royalties. The bill also establishes an income tax under which people would be taxed at 15 percent of the amount they pay in taxes to the federal government, or $25, whichever is greater. That means if you owe the federal government $5,000, you would pay $750 in state taxes. The tax rate is more than double what Walker proposed last year. The previous income tax was repealed more than 35 years ago. Alaska is one of seven states with no income tax. The proposal also includes a capital gains tax and an option for residents to apply all or part of their dividends to their tax bill. The other committee co-chairman, Rep. Neal Foster, a Nome Democrat, said the aim is for fair fiscal plan that spreads the impacts. Both residents and non-residents, for example, would be subject to the income tax. The House also is looking at oil tax and credit changes. Speaker Bryce Edgmon, a Dillingham Democrat, said other ideas for addressing the deficit might still come forward. Several minority House Republicans voiced their opposition to the income tax provision Friday. Rep. Dan Saddler, an Eagle River Republican, said his caucus would give the bill fair consideration. But he said he worried that linking two contentious issues was setting the stage for the kind of gridlock experienced last year.

Consultant raises concerns with state leading AK LNG Project

JUNEAU (AP) — A legislative consultant has raised red flags about Alaska taking the lead on a major proposed liquefied natural gas project, even as Gov. Bill Walker has said he is comfortable with it. In a recent report to lawmakers, consultant Nikos Tsafos outlined challenges threatening the project’s potential for success. They include a competitive market and a laundry list of tasks the state will need to achieve, such as finding buyers, insulating itself from cost overruns and buying gas at commercially reasonable prices from its former project partners, the North Slope’s major energy companies. The state has offered little evidence to show why this approach might succeed, he wrote. Any effort to commercialize North Slope gas will require “serendipity,” an aligning of numerous elements, he said. Legislators were scheduled to hear a project update Monday. Rosetta Alcantra, a spokeswoman for the Alaska Gasline Development Corp., said Tsafos’ company didn’t contact the corporation in compiling the review. The state-sponsored corporation has become the project lead. “It doesn’t help us, I’ll just say that, but it doesn’t deter from our motivation as Alaskans to demonstrate that, yes, we can do this,” she said of the report. It’s the latest iteration of a long-hoped-for gas project taking shape after a market shift, an inability to get the costs down enough and hesitance among the North Slope companies to move to the next phase, Tsafos wrote. The governor said in his State of the State speech last week that Alaska is proceeding with an eye toward projected gas prices for 2023 to 2025, seeing that as a window of opportunity. The state opened an office in Tokyo to help promote trade and advance a natural gas pipeline project. “We have no other project that will revitalize our economy the way the gas line will,” Walker said to applause. He vowed the project only will be pursued if it has long-term customers and not “at all costs.” The Senate State Affairs Committee plans to hear legislation Tuesday that would restore the portion of Alaska residents’ yearly oil wealth checks that Walker vetoed last year. Public testimony is scheduled for Saturday. The House Finance Committee plans Thursday to hear a bill that failed last year that would provide survivor benefits to the families of peace officers and firefighters. The bill, from Minority Leader Charisse Millett, has support in the House majority. ——— Online:

Tongass National Forest plan moves to young-growth timber

JUNEAU, Alaska (AP) — Plans for managing the nation's largest national forest call for changes in timber harvests that one critic says will be "the demise of the timber industry as we know it right now." The Tongass National Forest released a management plan update Friday that it says will emphasize young-growth timber sales in the forest, which covers much of southeast Alaska, and allow for a logging rate that it says will meet projected timber demand. This stems from a 2013 memo from U.S. Agriculture Secretary Tom Vilsack, directing Tongass managers to speed the transition from old-growth harvests toward a wood-products industry that mainly uses young-growth timber. The move was to be done in a way that preserves a viable timber industry. The transition goal was 10 years to 15 years, compared to the prior target of 32 years. The decision released Friday calls for a full transition in 16 years and expects most timber sold by the Tongass to be young growth in 10-15 years. Much of the wildlife found in the forest is linked to or at least partially reliant on old-growth forest, including a major brown bear population, high densities of breeding bald eagles, the Alexander Archipelago wolf and species important for subsistence, according to a Tongass decision document. The supervisor of the Tongass, M. Earl Stewart, told reporters Friday that the Forest Service is working with the state on a young-growth inventory. He said the agency also is evaluating a potential study to determine the type, volume and quality of products that can be made with young-growth Sitka spruce and western hemlock growing in southeast Alaska. Harvests will be monitored to see if any changes will need to be made, he said. Stewart's decision is based on recommendations from an advisory group that included representatives from conservation groups, the timber industry, Alaska Native groups and federal, state and local governments, he said. The update is to take effect in 30 days. Asked if this could be changed by the incoming Donald Trump administration, Stewart read a statement from the Washington, D.C. office. It said in part that the Forest Service is working to ensure a smooth transition and that its employees will remain focused on their missions. Alaska's congressional delegation sees the plan update as a blow to the timber industry and communities. The delegation will explore options to overturn the planned changes, a release from Republican U.S. Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young said. Shelly Wright, executive director of the Southeast Conference, a regional economic development group, also expressed concerns. "I think that it will be the demise of the timber industry as we know it right now," she said. One mid-sized mill remains in southeast Alaska, but it's built for larger logs and would have to invest millions of dollars if it wants to move to smaller logs, she said. There are smaller mills that do specialty work but only need a couple trees a year, she said. "The opinion of people that believe in resource development is that trees grow. Trees grow back," she said. "There will always be mature timber because trees grow, and if you let them grow to a mature size, then we'll have mature timber." In a release, Mark Kaelke, southeast Alaska project director for Trout Unlimited, noted protections for an area that his group says includes the forest's most important and productive wild salmon areas. Kristen Miller, conservation director with the Alaska Wilderness League, offered praise while noting her group wants a speedier transition to young-growth harvest. The region's economy "is built on sustainable fisheries and wild places that draw visitors from around the world," she said in a release, adding that it's time for Forest Service management "to look beyond logging."

Walker hires former AG as oil and gas consultant

Gov. Bill Walker has hired Craig Richards as an oil and gas consultant, less than a month after Richards resigned as Alaska's attorney general. Walker's office on Friday released the contract signed earlier this week. The contract, with the Natural Resources Division of the Department of Law, runs through year's end and is for up to $50,000. Richards resigned last month as attorney general, citing a desire to re-focus on his family. "We are fortunate to retain an Alaskan with Craig's talent and legal knowledge to advise us on oil and gas issues. I'm pleased we are able to continue to draw upon Craig's legal expertise," Walker said in a release from his office. As attorney general, Richards was a public face of Walker's unsuccessful proposal calling for structured annual draws from Alaska Permanent Fund earnings to help pay for state government. Richards' legal experience includes areas of oil and gas and taxation. Walker's office said other attorneys general went on to work on oil and gas issues, including John Burns, who is outside counsel for the Alaska Gasline Development Corp.

House asks Senate for joint session on overrides

JUNEAU — The Alaska House has asked the Senate to meet in joint session to consider potential overrides of vetoes made by Gov. Bill Walker, Speaker Mike Chenault said Wednesday. The Nikiski Republican said he sent a letter to Senate President Kevin Meyer asking for a joint session Friday. Chenault said he's not sure where the votes might be to try to override any particular veto. But he said there's enough interest on his side to at least hold a session to consider potential overrides. Walker vetoed nearly $1.3 billion from the budget, the bulk of which came from limiting the amount available for Alaska Permanent Fund dividends and for oil and gas tax credits. The Legislature, in passing the budget, provided enough money for a status quo dividend this year. The Senate later passed legislation that would limit dividends to about $1,000 for the next three years. That bill, the centerpiece of Walker's fiscal plan, would allow for use of permanent fund earnings to help pay for state government. It faltered in the House during the last special session. The Senate on Monday decided to wait to see whether a joint session invitation would come from the House rather than initiating one. The Senate is not scheduled to meet again until Friday. Suzanne Cunningham, Meyer's chief of staff, said his office had received the letter. Meyer is traveling but plans to be in Juneau on Thursday and is continuing to talk with his members, she said.

Alaska Senate passes compromise state operating budget

JUNEAU (AP) — The Alaska Senate on Tuesday passed a compromise state operating budget that restores funding for public schools, reduces a proposed cut to the university system and aims to prevent layoff warnings being sent to state workers. The vote came after House and Senate negotiators reached a deal late Monday. The House was expected to take up the measure later Tuesday. The compromise addresses a number of issues that were important to minority House Democrats. Support from the minority is needed in the House to access a reserve fund to cover costs not covered by revenue. Rep. Les Gara, D-Anchorage, the lone minority member on the budget conference committee that announced the compromise, said he hoped it could be broadly accepted. Even with a budget deal, committee members acknowledged there was still work to do during the special session. The state faces a multibillion-dollar budget deficit amid low oil prices, and the pieces of a long-range fiscal plan proposed by Gov. Bill Walker to help dig the state out of the hole were pending. Legislative leaders have wanted to avoid a repeat of last year, when a budget fight spilled into June and thousands of state workers received notices warning of possible layoffs if a budget wasn't approved by July 1. The deadline for mailing those warnings is Wednesday afternoon. Asked if the governor would accept a budget funded with money from the constitutional budget reserve, Walker spokeswoman Grace Jang said he typically doesn't comment on pending legislation until it reaches his desk. Senate Finance Committee co-chair Anna MacKinnon, a Republican from Eagle River, said the budget represents a bipartisan effort and addresses "the need to cut, the need to invest and the need to compromise." Senate Finance Committee co-chair Pete Kelly, R-Fairbanks, said the cutting will continue next year, given the state's fiscal situation. The budget deal eases the level of a proposed cut to the University of Alaska system, provides funding for prekindergarten and early childhood education programs, reduces a cut to the state ferry system and allows for collected cruise ship passenger taxes to flow to certain communities where the ships stop. The committee previously recommended not distributing the taxes during the coming fiscal year. The deal also restores K-12 funding to previously anticipated levels and adds a bit extra to that, according to Legislative Finance Division Director David Teal. It also addresses funding for public broadcasting. The package includes some money from the current year. During the regular and extended session, disagreement over how much to change Alaska's oil and gas tax credit structure proved to be a stumbling block, and legislators said they saw resolution on that issue as key to making further progress on the budget and on revenue bills. That issue still wasn't resolved, but Gara said the expectation is that work on it will continue.

Hopkins resigns from gasline board for Senate run

Luke Hopkins, who was narrowly confirmed to the board of the Alaska Gasline Development Corp. last month, has resigned from that post to run for the state Senate. In a letter to Gov. Bill Walker, dated Wednesday, Hopkins said his decision to run was motivated by what he considers a lack of leadership in the Legislature. He says he remains committed to the corporation's mission and doesn't want to see that further politicized by his campaign. His resignation is effective immediately. Hopkins is a former mayor of the Fairbanks North Star Borough. The Senate seat he would be vying for is held by Republican Senate Majority Leader John Coghill. In a statement, Walker thanked Hopkins for bringing his knowledge, experience and passion for a gas line to the board. Walker says he'll start the process of finding a replacement soon.

Moda Health leaving Alaska individual health market in 2017

JUNEAU (AP) — One of the two companies offering individual health insurance policies for Alaskans announced Monday that it will not be participating in that market next year. The announcement by Moda Health would leave Premera Blue Cross Blue Shield as the only company providing individual health insurance policies in the state as of Jan. 1. Moda said current individual health insurance policyholders and those who enroll in such plans in 2016 in Alaska will be covered through Dec. 31. The company has about 14,000 individual members in Alaska, it said. High claim costs and a relatively small market have been ongoing concerns in Alaska. The state approved average rate increases of close to 40 percent for each of the companies for 2016. That was on top of double-digit rate increases for 2015. In a release, Moda's director of Alaska sales and service, Jason Gootee, said preliminary calculations by the company indicated it would need a significant premium increase in 2017 to be sustainable on the individual market. "At some point, you can't keep passing these significant costs on to consumers," he said in the release. "Like many others, we want this market to have long term sustainability and we look forward to continuing the conversations with our many statewide partners on future market reforms." Late in the regular legislative session, Gov. Bill Walker proposed a program aimed at spreading the cost of claims for the costliest conditions across all insured markets, rather than to have them just be borne by the smaller individual market. The legislation received hearings but did not reach floor votes. It so far has not resurfaced during the extended session that began April 18. As of Jan. 1, as the situation stands that with Moda's announcement, the choice for individual health coverage on or off the federally facilitated online marketplace will be Premera, said Lori Wing-Heier, the director of Alaska's Division of Insurance. Wing-Heier said she learned of Moda's plans Monday morning. Gootee said Moda decided to leave the individual market in the state to focus on other lines of business in Alaska, such as group medical and individual and group dental plans. Moda said it would re-evaluate the individual market early next year and consider a possible return "in future years." Wing-Heier said under federal law, if a company leaves the federally facilitated marketplace it cannot return for five years. Concerns with Moda's financial situation prompted officials in Alaska and Oregon earlier this year to temporarily suspend Moda from accepting new or renewal policies in their respective states. But that action was lifted shortly thereafter, when the Alaska Division of Insurance and Oregon Department of Consumer and Business Services said they had reached an agreement with Moda aimed at stabilizing its financial position.  

Marijuana board to take up onsite consumption rules

JUNEAU (AP) — Marijuana regulators in Alaska plan to consider rules this week for consuming marijuana products at authorized retail pot stores — a first among states that have legalized the recreational use of pot. Late last year, the Marijuana Control Board voted to allow people to use marijuana at certain stores that will sell it. But rules surrounding in-store use still need to be ironed out. No licenses have been issued yet. At its meeting in Anchorage on Wednesday, the board plans to consider three sets of proposed rules for onsite consumption. Whatever is settled on is expected to be put out for public comment. Board staff, board chair Bruce Schulte and board member Peter Mlynarik each proposed a set of draft rules to be discussed. Schulte said each is conservative in its approach and it will be up to the board to pull something together from the proposals. All three call for separation between consumption and non-consumption areas, with varying details for how that would look. Two, for example, propose a separation by a securable door. Differences between the drafts crop up in areas such as quantities and whether to allow for marijuana purchased for in-store use to be taken off site if not fully consumed. Schulte said he expects some discussion Wednesday about the timeline for approval of applications. He said concerns have been raised about the schedule. The board began accepting applications in February. A tentative timeline has suggested the first licenses for cultivation and testing could be approved in June, with the first retail and product manufacturing facility licenses approved later in the year. State lawmakers last week approved legislation allowing for national criminal history checks for license applicants. That bill will go to Gov. Bill Walker for consideration. Cynthia Franklin, director of the Alcohol and Marijuana Control Office, said the impact of waiting for that language has been "very minimal to none" because few applications have gotten to that point. One of her more immediate concerns is the level of office staffing to handle the workload. She said the office doesn't have enough staff and the idea of doing more with less is a fallacy. "You cannot have a highly regulated industry where people are carefully examining documents and then skimp on the number of people that are available to do that and have the expectation that that is going to have no effect on the time that it takes to process the application," she said.

Walker says he’ll call special session if Legislature doesn’t ‘finish the job’

JUNEAU (AP) — Gov. Bill Walker on Wednesday said he wouldn't veto legislation calling for structured, annual draws from Alaska Permanent Fund earnings if he doesn't get other pieces of his fiscal plan. But he made clear he wants a broader package from lawmakers. The comments came during a briefing with legislators requested by the House Finance Committee co-chairs on the latest version of Walker's Permanent Fund plan. The proposal is central to Walker's plan to address a multibillion-dollar budget deficit, and one of the thorny, unresolved issues in the extended legislative session. Taxes and budget cuts also have been proposed to help close the gap. Rep. Dan Saddler, R-Eagle River, asked if Walker would veto a Permanent Fund bill if the governor didn't also get bills he's proposed dealing with taxes and credits. Walker has proposed a personal state income tax, higher taxes on motor fuels and various industries and changes to the state's oil and gas tax credit system. Walker called the Permanent Fund bill a critical piece of a broader package that needs to come together. If pieces are left out, "you don't close the gap, you don't finish the job," Walker said. But, he said later, "I'm not going to stop something going through because not everything is in line exactly." Walker in a brief interview said he would not reject a "good, solid piece" passed by lawmakers but wants a complete fiscal plan. He would take each bill as he got it, he said. If legislators passed the Permanent Fund piece and adjourned, Walker said he wouldn't veto it. But, "I'd call them back to finish up," he said. Walker has said he sees spending cuts, a restructuring of Permanent Fund earnings and the dividend program and new revenues that include a broad-based tax as key pieces for a sustainable budget. He said he'd be happy to hold similar briefings on other proposals. An inability to come to an agreement on oil and gas tax credits on the House side sent lawmakers into overtime this week. Resolution on that issue is seen as key to further discussions on the budget and revenue measures. There is division over taxes, particularly an income tax proposed by Walker. Senate President Kevin Meyer said Tuesday that not including tax bills, the Permanent Fund bill would be the hardest bill of those left in play for the Senate to pass.

Meyer: Permanent Fund bill could be difficult in Senate

JUNEAU (AP) — Senate President Kevin Meyer said Tuesday that he doesn't think there's broad support in his chamber for a restructuring of Alaska Permanent Fund earnings. He said that not including tax bills, it would be the hardest bill of those left in play for the Senate to pass. Rewrites of Gov. Bill Walker's bill calling for structured annual draws from Permanent Fund earnings and changes to the dividend program are pending in the House and Senate Finance committees. They call for annual draws of 5.25 percent of the average market value of the permanent fund for the first five of the six preceding fiscal years. A dividend of $1,000 would be guaranteed for three years and after that be based on 20 percent of the draw and an amount equal to 20 percent of resource royalties. During a House hearing Tuesday, Rep. Les Gara, D-Anchorage, said he worries that provisions of the rewrite reducing the payout as oil prices rise are a "pathway to austerity" since they would limit the revenue available to address areas that have been cut in recent years. Attorney General Craig Richards said the provisions speak to concerns about budget volatility and growing government when oil prices rise. "What that does is, one, it's frankly, I think, the right way to handle the Permanent Fund, which is, we're not spending it when we really don't need it," he said during the hearing. The portion of the draw dedicated for dividends would not be affected by the reduced payout. Sen. Mike Dunleavy, R-Wasilla, said he doesn't support a Permanent Fund restructuring this year. He said there are a number of members in the Senate who see room for further budget cuts "before you go to Alaskans and say, ‘Give me your money.’" The structured use of Permanent Fund earnings is seen as a cornerstone of Walker's fiscal plan. It's one of the big pieces still under consideration during the extended legislative session, along with oil and gas tax credits, tax bills, state spending plans and changes to the state's criminal justice system. The Permanent Fund piece alone wouldn't close the state's budget deficit. Resolution on credits is seen as key to making further progress on the budget and revenue bills. The House Rules Committee scheduled a meeting on the credits bill that stalled in the House for April 20. Minority Democrats on April 19 laid out concerns with the current oil and gas tax and credit structures, with Sen. Bill Wielechowski, D-Anchorage, calling the need to make fixes to the system a "line in the sand." Walker proposed eliminating certain credits and raising the minimum tax on North Slope producers, an idea that's been a hard sell. House Minority Leader Chris Tuck, D-Anchorage, has said his caucus wants changes at least on par with what Walker proposed. A number of legislators have expressed openness to addressing elements like credits in Cook Inlet. But some lawmakers have worried about the impact that big changes will have on an industry hit by low oil prices. Lawmakers also had yet to resolve differences on a bill that would allow for national criminal history checks for applicants for legal marijuana business licenses. That bill has been stuck over differences on a provision that would bar legal marijuana operations in unincorporated areas outside of organized boroughs but allow communities in those areas to hold local elections to allow for pot businesses.

Walker says he'd veto Anchorage legislative office purchase

Gov. Bill Walker said Thursday that he would veto the purchase of a legislative office building in Anchorage if that item remains in the state infrastructure budget. Walker told The Associated Press the purchase is not compatible with where the state is financially right now. He said legislators should know where he stands on the issue as they put the budget together. The current Senate version of the capital budget includes $32.5 million for the building and land purchase of the Anchorage LIO. The debate over buying the building comes after a state court judge last month ruled that the Legislature's lease of the building violated state contracting rules and should be tossed out. Alaska faces an estimated $4 billion budget deficit exacerbated by low oil prices. "I think that when we're not able to fund many, many, many things, asking people to do things differently, pay taxes, lower dividends, those kinds of things, I think to acquire that building for legislative offices when we have vacant space available in our own buildings, which we already own, I think is not fiscally responsible," he said. Senate Finance Committee co-chair Anna MacKinnon, who takes the lead on the capital budget on the Senate side, said she went to Walker before introducing her draft rewrite of the bill to ask him his thoughts. The governor told her he needed to consider it, she said. MacKinnon, R-Eagle River, said she never heard from him directly that he had made a decision. "I'll find out why later," she told reporters when asked for reaction to Walker's decision, adding later: "Maybe I have a memo in my inbox." Walker's legislative director informed MacKinnon's chief of staff of the governor's decision after Walker disclosed it when asked during the AP interview. The choice to advance for consideration the purchase of the building was made because it was the least costly way to close out a lawsuit that is a potential liability for the state, among other reasons, MacKinnon said. The state Atwood building would not be immediately ready for the Legislature to move there, which would require renting space somewhere else in the meantime, she said. "I think the governor has acted in a way that is inconsistent with the best financial choices for the Legislature," she said. Amy Slinker, spokeswoman for 716 West Fourth Avenue LLC, the building owner group, wrote in an emailed statement that the group agreed to the $32.5 million purchase price proposed by the Legislative Council March 31. "We stand ready to work with the parties to accomplish the council's directive," Slinker wrote. The Senate Finance Committee proposed using money from the Alaska Capital Income Fund, a subset of the state General Fund, to make a simple, one-time cash payment for the building. There are a myriad of ways the Legislature could finance the purchase through bonds and with the help of state finance agencies and avoid the large, visible budget line item; however the governor would still have the final verdict over the debt payments. Longtime Anchorage real estate developer and managing member of the building owner group Mark Pfeffer has said 716 would likely sue the Legislature if it walks away from its obligation for the office building that was custom-built for the governing body just two years ago at a cost of $44.5 million. The Legislative Council had considered moving Anchorage legislative offices to the state-owned Atwood Building in Downtown Anchorage, which currenlty houses executive branch agencies. Department of Administration Commissioner Sheldon Fisher testified to the council March 31 that the full office space requested by the council would not be ready until January 2018 and that other state personnel would move into the Atwood space as it becomes available if the Legislature choses not to. Journal reporter Elwood Brehmer contributed to this story.  

Bill seeks to address rising health insurance rates

JUNEAU (AP) — State officials in Alaska are proposing a program to address high-cost health insurance claims in hopes of stabilizing rising rates on the individual policy market. Just two companies — Premera Blue Cross Blue Shield and Moda Health Plan Inc. — serve the individual market in Alaska and have filed for double-digit rate increases each of the past two years. State officials say that's not sustainable. They hope that reviving a high-risk pool to handle claims for the costliest conditions will bring some relief. The idea is to spread the cost of those claims across all insured markets, rather than to have them just be borne by the smaller individual market. The claims would be handled through the Alaska Comprehensive Health Insurance Association, which before the federal health care law provided insurance to Alaska residents who had been denied coverage. Under the proposal, insurers would transfer premiums for those consumers to the program, said Division of Insurance Director Lori Wing-Heier. The hope is to ease high rate increases by taking high-risk claims from the individual market and having more than 220,000 Alaskans pay a portion of those claims rather than 22,000, she said. There would be an assessment passed on to insured Alaskans to contribute to the pool, she said. The cost of that is not yet known. But it's not the intent to make it so expensive that people who have insurance would no longer be able to afford it, she said. Wing-Heier told lawmakers Tuesday that without a change, the state runs the risk of the individual market going into a "death spiral," with people potentially forced from the market by the high rates. The state struggles with high health care costs and that has translated to high insurance costs, she said. Wing-Heier said the goal of the proposal from Gov. Bill Walker is to minimize the size of rate increases and provide some stability to the market. With the state down to two insurers in the individual market, there's concern with how long they continue to incur the losses they have, she said. Both Premera and Moda experienced "significant losses" in 2014 and 2015, according to the Division of Insurance. Last year, each filed for average rate increases of close to 40 percent. Early indications this year suggest continued losses and likely rate increases for next year of more than 25 percent, the division said.  

Walker picks Spohnholz to succeed Gruenberg in Alaska House

Gov. Bill Walker on Tuesday appointed Ivy Spohnholz to fill the state House seat vacated when Anchorage Democratic Rep. Max Gruenberg died last month, calling Spohnholz a "worthy successor." Spohnholz was one of three finalists for the job whose names were sent to Walker for consideration by Anchorage Democrats. The other two were Taylor Brelsford and Kendra Kloster. By law, the appointee must be a member of the same political party as the predecessor, and in this case, would be subject to confirmation by House Democrats. If confirmed, Spohnholz, 43, said she plans to seek election to the seat later this year. She said she would caucus with minority Democrats. In a release, Walker said Spohnholz has a heart "for the youngest and most vulnerable among us." She will keep the state's future in mind in working toward a balanced, sustainable budget, he said. Spohnholz, who works for the Alaska division of the Salvation Army, said that when she was considering seeking the seat, she thought about what is at stake for the state and felt compelled to be a part of the conversation. Legislators are grappling with a multibillion-dollar deficit amid chronically low oil prices. Spohnholz said she's been following the budget and the state's fiscal situation closely. One thing that's been missing in the discussions so far, she said, is "what kind of a state do we want to have." "We've been talking about what we're willing to pay for government, and that is a very important conversation," she said. But more important than that is asking: "What kind of a state do we want to have and what are we going to do to get there?" she said. "Do we want to have a state where people don't want to go to our university system because we have starved it and our best and brightest move out of state?" Spohnholz said. "I don't think that's the state that we want to have, for example."

Alaska judge tosses lawmaker challenge to Medicaid expansion

A state court judge in Alaska on Tuesday upheld Gov. Bill Walker’s decision to expand Medicaid without legislative approval, finding that the federal Social Security Act requires Medicaid expansion. Superior Court Judge Frank Pfiffner dismissed a challenge to Walker’s authority by the Legislative Council, which is comprised of state House and Senate lawmakers. That decision can be appealed. A spokeswoman for the Senate majority said the Republican-led majority is looking over the decision and will evaluate its options. The decision came as Republicans in Alaska were participating in the state’s presidential preference poll. A key argument in the case centered on whether the expansion population is a mandatory group for coverage under Medicaid or an optional group that cannot be covered unless approved by the Legislature. The Legislative Council, in its lawsuit, argued that Walker overstepped his authority in expanding Medicaid on his own. The federal health care law expanded eligibility for Medicaid, and the U.S. Supreme Court in 2012 upheld most of the law. But it also found that states cannot lose existing Medicaid funding if they don’t expand Medicaid coverage. Pfiffner found that the U.S. Supreme Court decision striking down a penalty for not complying with expansion did not affect the requirement that states provide Medicaid to the expansion group. “This requirement may lack the coerciveness that Congress intended, but it is still a requirement,” Pfiffner wrote. The Legislature can change state law to reject the expansion if it wants, he wrote. Until then, state law requires the governor to provide Medicaid services to the expansion group, Pfiffner wrote. The population targeted by expansion is people between the ages of 19 and 64 who are not caring for dependent children, not disabled and not pregnant, and who earn up to 138 percent of the federal poverty level. Expansion in the state took effect last September. More than 10,000 people have been covered by the expansion, according to the state health department. Walker, in a statement, said he is pleased with the decision. He said the administration would continue to work with the Legislature on efforts to redesign and reform the Medicaid program. Becky Bohrer can be reached at

Alaska judge tosses lawmaker challenge to Medicaid expansion

(AP) — A state court judge in Alaska on Tuesday upheld Gov. Bill Walker's decision to expand Medicaid without legislative approval, finding that the federal Social Security Act requires Medicaid expansion. Superior Court Judge Frank Pfiffner dismissed a challenge to Walker's authority by the Legislative Council, which is comprised of state House and Senate lawmakers. That decision can be appealed. A spokeswoman for the Senate majority said the Republican-led majority is looking over the decision and will evaluate its options. The decision came as Republicans in Alaska were participating in the state's presidential preference poll. A key argument in the case centered on whether the expansion population is a mandatory group for coverage under Medicaid or an optional group that cannot be covered unless approved by the Legislature. The Legislative Council, in its lawsuit, argued that Walker overstepped his authority in expanding Medicaid on his own. The federal health care law expanded eligibility for Medicaid, and the U.S. Supreme Court in 2012 upheld most of the law. But it also found that states cannot lose existing Medicaid funding if they don't expand Medicaid coverage. Pfiffner found that the U.S. Supreme Court decision striking down a penalty for not complying with expansion did not affect the requirement that states provide Medicaid to the expansion group. "This requirement may lack the coerciveness that Congress intended, but it is still a requirement," Pfiffner wrote. The Legislature can change state law to reject the expansion if it wants, he wrote. Until then, state law requires the governor to provide Medicaid services to the expansion group, Pfiffner wrote. The population targeted by expansion is people between the ages of 19 and 64 who are not caring for dependent children, not disabled and not pregnant, and who earn up to 138 percent of the federal poverty level.

Legislators pay fond tribute to Rep. Gruenberg

JUNEAU — Legislators paid tribute Feb. 16 to the late state Rep. Max Gruenberg, remembering the Anchorage Democrat as a kind man and a stickler for details with a penchant for amending bills that he thought could be improved. There were tears and laughs at the remembrance, held in the House speaker’s chambers, as stories were shared. There were jokes about Gruenberg’s amendments and breaks in floor sessions, known as “at eases,” so Gruenberg could iron out details or nail down answers to questions. There were tears remembering acts of kindness and the impression that he left. House and Senate lawmakers from both parties attended, along with aides and Gruenberg’s widow, Kayla Epstein. Gov. Bill Walker and Lt. Gov. Byron Mallott paid their respects, as did several former legislators. Gruenberg served in the House from 1985 to 1993 and from 2003 until his death. He was 72. House Speaker Mike Chenault, R-Nikiski, said Gruenberg had a good heart and tried to improve legislation. Even if he didn’t agree with the bill, he wanted to make sure that if it was done, it was done right, Chenault said. He enjoyed Gruenberg’s company, “even though sometimes, and I’ll say it, he was a pain the butt,” Chenault said to laughs. “But he was our pain in the butt.” House Minority Leader Chris Tuck, D-Anchorage, said Gruenberg was often a crutch for him to lean on. He left a big hole, Tuck said. Senate Minority Leader Berta Gardner, D-Anchorage, said Gruenberg had a joy for life and would listen with his full attention. She said to laughter that there were times he would fall asleep, but when the talking stopped, he would open his eyes and ask a pertinent question. Rep. Les Gara, D-Anchorage, said Gruenberg’s “true passion was giving people a chance in the world, regardless of their background, regardless of whether they were born wealthy, poor or whatever.” He believed everyone deserved a fair shake, Gara said. Epstein asked legislators to consider going back to 120-day sessions. She said her husband was working hard. State law calls for sessions to run 90 days, the result of a 2006 voter initiative. The constitution allows for sessions of up to 121 days, with an option to extend for up to 10 days. Under the law, when a vacancy occurs in the Legislature, the governor is to appoint a qualified replacement within 30 days of the vacancy. The law states the appointee shall be a member of the same political party as the predecessor and in this case would be subject to confirmation by a majority of House Democrats. In a release, the state Democratic party and House District 16 Democrats said that district Democrats will accept applications to fill the seat until 5 p.m. Feb. 22. Applicants must live in District 16, the Anchorage district that Gruenberg represented. Interviews will be conducted on Feb. 24 and 25. Three nominees will be sent to Walker. The person appointed would fill the remainder of Gruenberg’s term, which ends in January.  


Subscribe to RSS - BECKY BOHRER