Opinion

AJOC EDITORIAL: A tax for two Alaskas

Gov. Bill Walker appears to have not learned his lesson when calling a special session. After the Legislature went all 121 days it was allowed this year without producing a budget or a way to pay for it, Walker called a special session with a loaded agenda that proved a recipe for disaster as the divided House and Senate exerted their respective leverage over the various pieces and it ended after 30 days at the same stalemate. Now with a government shutdown looming, Walker called another special session with one agenda item: the operating budget. With no leverage over each other and an understanding of the consequences of not passing a budget by June 30, the House and Senate were finally able to agree on something and accomplished their one constitutionally-mandated task. After the operating budget was agreed upon June 22, Walker added a second item to the session: ending the cashable credit program for North Slope explorers and small producers. Again, with one item to consider and with both sides understanding the need to end a program with a $1 billion liability to the state budget, the House and Senate eventually agreed to kill the program retroactively to the start of the current fiscal year on July 1. By this point the per diem counters were running and the public anger was growing over legislators collecting thousands of dollars per day while only a handful were actually involved in the heavy lifting of negotiation. Acknowledging that anger, Walker declared he would not call a third special session until a capital budget bill was ready to pass. Like the limited call of the second session, with one thing to work on the House and Senate leaders finalized a deal and were able to come to order for a single day and pass it. With the fourth special session of the year now set to begin Oct. 23, Walker has set himself up for another failure. The agenda is limited to just two items, neither of which is the use of Permanent Fund earnings to cover the budget deficit that have passed in some form by both the House and Senate in the last two years. Instead of putting a version of one of those bills on the call, Walker chose instead to introduce an income tax that will effectively end the Permanent Fund Dividend and create two classes of Alaskans: those who get one and those who don’t. This proposal — unlike his veto to set the PFD at $1,000 in 2016 or the Legislature’s decision to set it at $1,100 this year — is the real fundamental change because Alaskans are no longer treated equally as the program intended. What Walker is pitching is that the PFD be reduced by half from what it would be under the current statutory formula and the remaining half would be taxed away from those making more than $75,000 per year. Quite simply, some Alaskan income earners would get a PFD and some would not, which transforms it from an equal distribution into a welfare program. The governor can cite spending cuts until he turns blue in defense of his tax plan, yet he cannot point to any structural changes in how state government works to make his pitch because none have happened. When the state’s largest public employee union contract was negotiated over the past year, Walker’s administration didn’t even achieve bare minimums of a wage freeze or a health plan contribution that resembles the private sector. The Senate Majority, which has stood fast against any income tax, did not outright reject Walker’s proposal but President Pete Kelly did make a reasonable request for a realistic oil production and revenue forecast. Currently, the production forecast for this fiscal year is just 459,000 barrels per day that no one believes yet hasn’t been officially revised and isn’t required to be until December. North Slope production is now tracking even with last year when 529,000 barrels per day flowed through the pipeline in the second straight year of growth after annual declines in every year but 2002 since the peak of 1988. Through the first 25 days of September, production for the month is averaging 508,000 barrels per day compared to 474,000 barrels per day in the same month a year ago. Prices are also rebounding, which combined with production and the success of the financial managers at the Permanent Fund changes the state fiscal picture greatly. If the goal is to get something done, Walker’s special session call makes no sense. If the goal is to set up an election that will feature class warfare between those who want an income tax and those who don’t it will be a smashing success. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Wealth creation, not taxes, is the solution to state fiscal woes

The rumors swirling around about yet another special legislative session devoted to a broad-based tax are both troubling and wrong. This whole narrative, concept and belief coming out of Juneau that “we can tax ourselves into prosperity” is a shortsighted plan that in the long term is simply not sustainable. Alaska is a wonderful state with abundant resources, vast amounts of wide-open spaces, pristine water and a global position of strategic and geographic importance. Instead of talking about taxes, new taxes and more taxes that will likely cause our economy to further constrict, we should be talking about plans, opportunities and incentives to create new wealth. New wealth, not more taxes, is the only real answer to our state’s fiscal woes. We’ve just experienced back-to-back special sessions that mark 2017 as the year with the most legislative days since statehood and not one of them was spent discussing a vision of hope and prosperity. The concept of wealth creation was never even discussed let alone put on the table. Government seems to suck the creativity and entrepreneurial spirit out of the best of our elected officials. That’s too bad. Because, now more than ever, we need big thinkers with the courage and vision to cut a sustainable path for our state’s economy and treasury by creating new wealth. New wealth can come in a variety of ways and from different sectors. Let’s talk about how to expedite getting the newfound North Slope oil into the pipeline and to market. Let’s talk about what will it take to increase the activity in our oil fields — such as honoring our commitments on tax credits, create some tax stability, and truly being a committed and reliable partner. Let’s talk about new and creative ways to expand and make more of our tourism — we have so much more to offer than being just a “bucket list” destination. We also need to talk about our other natural resources — mining, fishing, and forestry and growing these sectors for the benefit of all Alaskans. It’s time to wake up, roll up our sleeves and help develop the many opportunities right under our noses. To continue the narrative about taxes, new taxes and more taxes without talking about capitalizing on new economic opportunities is a disservice to the working men and women of Alaska and to our future generations. Some say we have a fiscal crisis, I say we have a fiscal challenge. I believe that the challenge is manageable and presents opportunity. With the right vision and desire, Alaska’s best days are still ahead of us. Our government needs to start thinking more like the private sector. It needs to learn how to live within its means and how to create new opportunity and wealth. It also means that sensible planning is a necessary element of success. Senseless, conflicting goals need to better be vetted and thought through. Our elected officials are good men and women. They just need to realize that we are facing a new dawn, with new challenges that require new, maybe outside the box thinking and innovative solutions. They need to realize that we can’t tax ourselves into prosperity and instead we need to focus on creating a better, more prosperous Alaska by finding the means to creating new wealth. Alaskans are a resilient people and are willing to meet challenges head on, overcome them and build a better economy for tomorrow and future generations. Together, we can create new wealth that will fill our state treasury, provide profits for our businesses while providing good meaningful jobs for our working men and women. It’s time to change the narrative from one focused on taxes to one that is sustainable and create new wealth for Alaska. Curtis Thayer is the president and CEO of the Alaska Chamber.

AJOC EDITORIAL: State education system needs total overhaul

The first step to solving a problem is admitting one exists. Alaska education officials have finally crossed that threshold after releasing the results from math, science and English tests administered this past spring to more than 70,000 students across the state in grades 3 through 10. The outcomes were shockingly poor. Fewer than 15 percent of 10th graders statewide scored proficient in math; for English only 38.4 percent scored proficient or better. More disturbing still is looking at the bar charts that show a steady decline in proficiency from grade 3 to grade 10. In math, 44.5 percent of third graders scored proficient or better. That’s not great, but it is a starting point for improvement. Instead there is a steady path downward at every grade level before bottoming out at 14.7 percent in grade 10. “We have to be dissatisfied with the current results,” said Alaska Education Commissioner Michael Johnson. Anchorage School District Superintendent Deena Bishop was even more blunt. “Our scores stink,” she told KTUU. If anything, she understated the situation for the state’s largest local school system. In the ASD, just 12.2 percent of 10th graders scored proficient in math and a miniscule 2.2 percent as advanced. One in four 10th graders were far below proficient and another 60 percent were below proficient. In English, a whopping 38.3 percent of ASD 10th graders scored far below proficient while just less than one in three scored as proficient or advanced. There can be no pointing to an urban-rural divide in outcomes for the state education system when the district with every advantage possible is failing in such epic fashion. Back in February, Herb Schroeder, the founder of the wildly successful Alaska Native Science and Engineering Program, released a study that tracks with the poor results of the state testing by showing that more than half of incoming freshmen from state high schools require at least one remedial course in math or English. In one particularly ugly data set, Schroeder found that 74 percent of students from five high schools ranging in size and location required remediation despite graduating with an average GPA of 3.16. What that means is students who qualified for state performance scholarships were unprepared for basic college work. At the time, many superintendents faulted his study. None should dare question his conclusions now. Schroeder has since estimated that the cost of remediation between students and the state pushes $42 million per year. Considering the state spends more than $1.3 billion per year on education, it is often paying twice to educate students. A state with budget deficits topping $2 billion per year cannot afford to spend this much money on a failing system; what it can afford even less is to continue churning out unprepared students. The state doesn’t need another task force or committee to find solutions. It needs a single mission: To teach English, math and science first, second and last. Fluffy social science, arts and expensive extracurricular activities must take a backseat to the old fashioned basics. There is no alternative. The solution is surely not what is found on the ASD website under guidance for parents about state exams that advises: “Encourage your child. Praise him/her for the things they do well. If your child feels confident, he/she will likely do their best on a test.” This kind of touchy-feely nonsense that has plagued our education system for decades has got to stop. “Feeling confident” is not how to pass a test. Confidence flows from preparation, not from empty praise. Another thing that has to stop is the misguided focus on graduation rates. Graduating is obviously important, but it is the academic equivalent of the participation trophy if the end result is merely passing students through the system without educating them. Schroeder has built the ANSEP success from the middle school level up by ensuring students are not only prepared to enter college, but prepared to excel. That hasn’t happened by lowering standards and social promotion. A total overhaul must start now for an education system that is crippling our next generation. Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: Et tu, Dan and Lisa?

From being Hitler to being a Russian tool and now back to being a Nazi, President Donald Trump has come full circle. For the left and the media, although that is redundant, nothing feels so comfortable as returning to their safe space governed by Godwin’s Law. “Why do Nazis like you?” one bylined operative yelled at the president on Aug. 15. “Do you support the Confederacy?” asked another, who presumably had a credential that wasn’t signed in crayon. The media works itself into a frothy rage daily over Trump, but its members were in a particular frenzy this day over his latest high crime and misdemeanor of blaming both sides for engaging in violence in Charlottesville. For eight years the press was sent swooning over President Barack Obama and his love of nuance such as citing the Crusades a thousand years ago as a reason to not “get on our high horse” about the unending radical Islamic terrorism of today. The left adores this kinds of nuance. Just get into a conversation with one of its members about the implications of widespread radical Islamic terrorism and be assured of a counter in the next breath with something about abortion clinic bombings that have a cumulative death toll of less than the Barcelona attack just last week. Trump’s sin wasn’t failing to condemn white supremacists harshly enough. His sin was noting the political violence that is practiced, perfected and preferred by the left. Let’s just be real. Nothing Trump said that Saturday after Charlottesville would be acceptable to the media and the left, and anything he said would be used against him. In other words, the narrative has been set. The media just fills in the stories like Mad Libs. Sens. Dan Sullivan and Lisa Murkowski, along with pretty much every other Republican, then jumped at the chance for their cameos in a storyline that’s been running longer than The Simpsons entitled “Republicans are Nazis.” Both their statements accused the president of not going far enough in denouncing the white supremacists, with Murkowski bizarrely equating the group that took to the streets armed with makeshift tear gas, clubs and bags of urine as standing up to hate. Just how far do you have to go to denounce white supremacists and Nazis? The entire premise of the question is insulting and Republicans should treat it with the disdain it deserves instead of issuing plaintive statements about “I hate Nazis times infinity!” Where have Sullivan and Murkowski been for the last year? Surely they have at least heard of a movement oxy-moronically known as “antifa” (anti-fascist) that has been wreaking havoc from city to city with near-impunity attacking anyone and everyone its members find guilty of “hate speech.” This didn’t start in Charlottesville, and it isn’t going to end there either. The entire political establishment and the left declaring antifa the good guys just standing up to Nazis lessens the chances of it ending anytime soon. Taking sides with antifa against the Nazis is like taking sides in the Bloods versus the Crips or the Hatfields versus the McCoys. Antifa has already been emboldened by its success shutting down conservative speakers, destroying property and assaulting anyone in a Make America Great Again hat all the while flouting laws prohibiting the wearing of masks in public that were originally passed to confront the Ku Klux Klan. Just two months ago, a radicalized Bernie Sanders supporter shot up a baseball field full of Murkowski’s and Sullivan’s fellow Republicans and somehow it is still a problem for Trump to condemn violence on the left as well as the right. Instead of competing over who can say they hate Nazis the most, it would be nice of senators from a freedom-loving state to stand up for the First Amendment. Larry Flynt, 2 Live Crew and the KKK are not the people you would invite to dinner, but those are the ones who have had to go to court defended by the likes of the American Civil Liberties Union to protect their First Amendment rights. The First Amendment doesn’t exist to protect Big Bird and the Smothers Brothers. With narrow exceptions, the First Amendment has been construed absolutely. One person’s standard of offense cannot be used to prohibit speech by another, and though politicians of both parties have often sought to limit various speech based on their own standards they have not prevailed over the Constitution. We are a nation of rights and of laws, or we are nothing at all. Descending into a nation of mob rule against political opposition is where antifa wants to take us. Anyone who has been watching knows they have a pretty wide definition of who is a Nazi, and Murkowski and Sullivan are probably already on the list. After all, they’re Republicans. Andrew Jensen can be reached at [email protected]

EDITORIAL: China must rein in North Korea to avoid confrontation

North Korea recently launched a missile that appears to be capable of hitting targets in the U.S. mainland, including Chicago. Pyongyang says that Washington should regard the launch as a “grave warning.” No argument there. This sobering development comes years earlier than many experts had predicted. The upshot: The U.S. policy of “strategic patience” — waiting for North Korean dictator Kim Jong Un to come to his senses and the bargaining table — is officially over. President Donald Trump needs a far more muscular policy than his predecessor’s, pronto. What will that be? So far, there’s been talk of shooting down North Korean test missiles as a warning. But that could provoke Pyongyang to rain massive conventional retaliation on Seoul. Bad sequence. There’s been smarter talk of amping up the U.S. cyber campaign to send the North Korean missile program into a tailspin, much as the U.S. did against Iran’s nascent nuclear program. But we hope that effort is already happening. And the U.S. also is moving to impose economic sanctions against Chinese banks and businesses for trading with North Korea. Let’s hope there is much more of that to come. What hasn’t worked yet: haranguing China, Pyongyang’s major trading partner and ally, to do more to rein in the outlaw Kim regime. As President Trump rightly tweeted about China, “they do NOTHING for us with North Korea, just talk.” Cut to America’s recent display of military prowess: Two supersonic B-1 bombers streaked over the Korean peninsula as part of a joint exercise with Japan and South Korea. U.S. forces also demonstrated the effectiveness of the Terminal High Altitude Area Defense system (THAAD), which detected, tracked and intercepted a medium-range ballistic missile launched from Alaska. All this posturing is directed not only at Kim Jong Un, but also the leaders of China and their “What, us worry?” attitude. The last thing China wants is U.S. supersonic bombers roaring close to its borders. The last thing China wants is a potent demonstration of how the U.S. can knock down missiles before they reach the American mainland. The last thing China wants is Japan and South Korea seriously mulling whether they should go nuclear to defend themselves. Both countries are believed to be capable of jump-starting a nuclear program on short notice. At the moment, however, both countries rely on U.S. nuclear deterrence for their security. The big question: Can North Korea be deterred, just as the Soviet Union and China were? In other words, do the North Koreans believe that the U.S. will retaliate, possibly with nukes, if North Korea attacks Japan or Seoul? The greater the doubt, the greater the risk that North Korea will make a first strike. All of this is unsettling and happening in China’s neighborhood. And as any businessman will tell you, rising tensions and threats of war aren’t good for business. China has a choice. It can help defuse the situation by choking off its energy trade with North Korea. It can make Kim Jong Un and his elites go without their favorite cognac and fancy cars. China can yank hard on the North’s economic lifeline and help inform average North Korean citizens that they could live far better lives without the Kim regime and its brand of leader-take-all communism. Just look south. Beijing, the choice is yours. Every North Korean missile launch brings confrontation closer.

AJOC EDITORIAL: Congress turns to Trump to bail out Obamacare

Senate Republicans have set the bar pretty high for achievements in failure. By bungling their attempt to repeal or replace Obamacare, they accomplished the impossible: they now own a law that none of them voted for in the first place and in fact campaigned for seven years to scrap. Of course there is a sound argument to be made that Sens. Lisa Murkowski, Susan Collins and John McCain have indeed voted for Obamacare by casting the decisive votes to kill the “skinny repeal” bill and derailing a conference committee process to reconcile with the bill passed earlier this year by the House of Representatives. Bizarrely, some Republican members of the Senate are now asking President Donald Trump to continue bailing out the disastrous legislation by maintaining the payments to insurance companies that were ruled unconstitutional by a federal judge in May 2016. In an unprecedented case, the U.S. House successfully sued the Obama administration for making the billions worth of payments annually despite the fact there was no congressional appropriation to do so. Expecting an appeal, the judge who found in favor of the House argument stayed her order pending resolution of the case, which allowed President Barack Obama to continue sending the unauthorized cash to insurance companies in cost-sharing reimbursements, or CSRs. Trump has held off on the appeal and kept up the CSRs despite their dubious legal status since he took office while giving Congress a chance to deliver on the promises made since voters handed them the majority in the House in 2010, the Senate in 2014 and the White House in 2016. But now he is threatening to stop the payments and let one of the greatest flaws in the law take effect instead of papering over the problem by shoveling billions more in taxpayer and borrowed dollars out the door. Ever since Obamacare passed in March 2010 there have been multiple waivers and delays of its worst features to cover up just how bad it is. The GOP was even complicit in this in 2015 when the party voted to delay implementation of the so-called “Cadillac tax” on expensive health insurance policies that would sweep up virtually every union plan in the country and is vehemently opposed by labor groups. All of the “popular” parts of Obamacare — Medicaid expansion, coverage of preexisting conditions, staying on a parent’s policy until age 26 — were allowed to take effect immediately while the worst parts were put off as states got hooked on the federal sugar. Having fallen on their faces trying to repeal or replace Obamacare and lacking the political will to actually appropriate funds for the CSRs, Trump is being set up as the fall guy by his party if he doesn’t keep up the payments that very same party successfully sued to stop. The other threat Trump has made is to reverse Obama’s decision through the Office of Personnel Management to classify Congress as a “small business” despite its 20,000 employees. That OPM action allowed the federal government to keep contributing 72 percent of congressional employee premiums despite the fact individuals on the exchanges are otherwise not allowed to receive such benefits. Obamacare has been held together through a patchwork of carveouts, bailouts and handouts, executive orders and illegal payments all designed to mislead the public about its costs and negative impacts. If the only way to spur Congress to act is to allow those negative impacts to take place then so be it, and sooner rather than later. ^ Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: The deadbeat, do-nothing Legislature

Alaska has less oil production than California and a credit rating just better than Illinois and New Jersey, yet 51 incumbents will run for reelection next year with at least one of them seeking a promotion. A day after this column goes to press, the Legislature will meet for a day in Juneau to pass the capital budget that — like everything else its members did or didn’t do this session — should have been finished three months ago. The self-congratulatory back-patting is nauseating. Instead of passing a bill both sides agreed upon to use Permanent Fund earnings in a sustainable fashion to cover part of the budget, the Legislature burned through another $2.5 billion from the Constitutional Budget Reserve. Instead of passing an increase in the motor fuels tax to fund transportation projects and address a growing backlog of deferred maintenance — again, that both sides agreed to — they did nothing and pulled the money from the general fund. Instead of beginning to settle the hundreds of millions in unpaid liabilities owed to small oil companies that already spent the money in good faith, the Legislature ended the program and will stiff those companies for a third straight year after Gov. Bill Walker vetoed $630 million in payments in 2015 and 2016. Deadbeat and do-nothing barely begins to cover it. While much of the blame lies with the Democrat-led House Majority for dragging out the process for months in their insistence to institute a $700 million income tax on an economy in recession and double or triple oil production taxes as the industry sheds thousands of jobs, the Senate Majority and Walker can shoulder some responsibility for hanging the state’s breadwinning business out to dry. Sure, the Senate tried to pay off about half the outstanding credit bills in its version of the capital budget but its negotiators folded like linen and are taking less than a tenth of what they proposed in the “compromise” budget set to pass July 27. The biggest crock coming from everyone in Juneau is that the state can’t afford to pay off the tax credits. Between the Permanent Fund Earnings Reserve and what’s left in the Constitutional and Statutory budget reserves, the state has about $15 billion. For less than 5 percent of that balance the state could pay what it owes, put this debacle behind us and restore some semblance of credibility to its self-proclaimed “partner” status with the oil business. Some partners. If the state and the oil business were partners, there would be one who does all the work and generates the company revenue while the other lazes around the office spending the money, giving itself annual raises, letting invoices pile up and demanding an ever-increasing share of the profits. The Senate Majority can talk a good game about wanting to pay the bills, but every one of its members were fine with skipping out on the Downtown Anchorage office building they commissioned and leaving its owners on the hook for a $28 million loan and losing their $9 million cash position. There is no squaring the circle of arguing the damage caused to small companies by holding out on tax credits owed while ignoring the financial ruin put on a pair of Anchorage real estate developers who made the mistake of relying on the signed commitments of the Legislature. Some have and will counter that both the oil companies and the developers knew what they were getting into and should have no recourse, which is akin to the parable of the woman and the snake. After nursing the injured snake back to health, the snake eventually bites the woman and as she’s dying of the poison she asks, “Why? I was your friend.” “Lady, you knew I was a snake when you picked me up.” That won’t be anyone’s campaign slogan next year, but at least it would be an honest one. Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: McConnell, GOP should have listened to Murkowski

The only conclusion that can be drawn from watching D.C. Republicans vomit all over themselves in their pathetic efforts to repeal and replace Obamacare is that they were just as surprised as Democrats when Donald Trump defeated Hillary Clinton. After spending the past seven years campaigning and fundraising on promises to scrap the widely unpopular law — and being rewarded with total control of all three branches of government — the GOP has found out what it’s like to be the dog that catches the car. The destructive fallout from Obamacare isn’t the only thing that can be traced back to 2010. Just as the law laid the foundation for the Democrats’ decimation from the local to the national level over the next two midterm cycles, another event that year set the stage for the Republicans’ embarrassing self-inflicted defeat this past week in Congress. After Joe Miller’s stunning upset of Sen. Lisa Murkowski in the Alaska Republican primary, she decided to run as a write-in candidate and eventually triumphed to seal her status in the state’s political history alongside Rep. Don Young and the late Sen. Ted Stevens as virtually untouchable. Before refusing to support the Republican nominee, Murkowski was one of Senate Majority Leader Mitch McConnell’s favored lieutenants in his so-called “kitchen cabinet.” Once she decided to go it alone without the party’s support, McConnell was forced to remove her from that inner circle status, although he allowed her to keep her committee seniority in a move that has paid dividends since the GOP took over the Senate in 2014 and landed her the chairmanship of Energy and Natural Resources. Now it is clear that McConnell would have benefitted from having Murkowski’s advice, not just on the flawed process on repealing and replacing Obamacare, but general best political practices. When the GOP took over the Senate in 2014, helped by Sen. Dan Sullivan’s defeat of Mark Begich in Alaska, Murkowski tempered her literal chair-wielding enthusiasm with the best way forward. “If Republicans fail to govern, if we say our responsibility is just to win the next cycle, we won’t win,” she said at Sullivan’s victory party. “We will not be in charge. We will not be setting the agenda. We will not be legislating. “We have our chance now. This is our time and if the American public doesn’t see us doing the hard work, then we’re going to be shown the exit just as the Democrats have been this cycle.” As the unbelievable news was sinking in this past November with Trump winning and the GOP holding the Senate, barely, Murkowski echoed her 2014 comments. “This isn’t Christmas,” she said. “We still have to govern.” She warned early on in the repeal-and-replace process that closed-door meetings would not produce a victory, and she was proven right yet again. Murkowski’s bipartisanship and care to craft sound policy are so rare in D.C. that she probably qualifies for an Endangered Species Act listing. The GOP could start listening to her for a change, or the entire party is going to be on a milk carton come 2018. Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: House gambit a waste of everyone’s time

If the House Democrats keep up these futile political gestures, someday they may grow up to be Congressional Republicans. The latest last-second nonsense from the Democrats managed to top their ridiculous vote in June when they introduced — and approved with the help of half the Republican caucus — a $2,200 PFD as they stuffed the operating budget into the capital budget bill before adjourning the first special session called by Gov. Bill Walker. Now with three days to go in the current second special session, House Democrats introduced another non-starter July 12 with their proposal to simply end net operating loss deductions for oil companies in a hopeless gambit to force the Senate to the table to rewrite the entire oil tax structure. Once again the House Democrats look clueless about the amount of leverage they hold and reveal their claimed concern for stability in the oil industry means jack and squat. Walker, rather than hold another press conference that says and does nothing, could put a quick end to the Democrats’ games by declaring what kind of bill he will sign. He could simply say, “I will not sign a bill that raises taxes or cuts deductions, so don’t bother sending me one.” There’s no chance the Senate would ever approve such a bill, but such a statement from Walker would send a strong message to the House to stop jerking around. A couple statements at the Wednesday hearing from the House Resources co-chairs Andy Josephson and Geran Tarr were laughable. Tarr repeatedly said that the Constitutional Budget Reserve is empty because it will be drawn down to about $2 billion after covering the deficit for the 2018 fiscal year. Setting aside her definition of “empty” regarding the state’s cash flow, what she never mentioned is that the $2.5 billion CBR draw wouldn’t have happened if the House had agreed to pass a bill to use the Permanent Fund earnings to help fund the budget. Instead, just like ending the cashable oil credits, the House demanded a $700 million income tax and killed a necessary fiscal reform on which both sides agree in their quixotic quest for new and higher taxes. As an argument for ending the net operating loss deductions with a deadline to compel action for a replacement system, Josephson said the Legislature does its Christmas shopping on Christmas Eve. In case he hasn’t noticed, the Legislature is currently doing its Christmas shopping in March because the House has sabotaged the areas where there is agreement by making demands where there is none. If House Democrats truly believe the public is on their side when it comes to instituting an income tax and raising taxes on oil, by all means run 51 state races next year on that platform and see how that goes. The Democrats have a twisted idea of what compromise means. To them it means “give us everything we want or we’ll kill the deal.” An actual compromise would be both sides setting aside what they can’t get and taking what they both want. For the state budget situation, a sustainable draw on the Permanent Fund earnings and an end to cashable credits are both huge accomplishments for which both sides could take credit. But the Democrats would apparently rather keep accruing cash liabilities of $1 million per day in their attempt to squeeze $50 million out of the oil industry, and use the CBR instead of the Fund earnings because they can’t have an income tax. The Democrats’ tax proposals would make the current recession worse, and their refusal to act on the areas of agreement are doing the same to the state budget. Senate Republicans can run circles around the House Majority all day. It’s time for Walker to step up and tell the Democrats to stop wasting everyone’s time and money. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Senate offer on oil tax credits doesn't fix deficit

We have to end unaffordable oil company cash subsidies that are estimated to cost the state $1.5 billion over the next ten years. Some legislative leaders say they will only end those unaffordable subsidies during this Special Session if we “replace” them with new subsidies that cost Alaskans almost as much. Through press statements, they’ve offered to replace $1.5 billion in cash payments by the state with a $1.45 billion reduction the state receives in oil company tax payments. They also want a separate $10 million per year reduction in already meager oil company production tax payments to Alaskans. There’s a path to meaningful compromise and closing our deficit. This isn’t it. Progress in politics requires legislators to put down their ideological swords. And it means special interests, including our partners in the oil industry, need to truly chip in so a deficit solution is fair to all, and not just the loudest, wealthiest interests. Politics, when it works, requires ideological purists to put on their adult clothes. Most, but often not all, legislators recognize that. Last week our Republican-led Senate told the press they will only end unaffordable oil company subsidies if we adopt almost equally unaffordable new oil company subsidies in their place. That might be great for our oil industry partners, but it’s not great for you. It doesn’t materially reduce a crippling deficit that’s harming our economy, nearly drained our savings, and that’s making Alaskans feel insecure in their jobs. Our House Majority Coalition of Independents, Democrats and Republicans came together this year out of a deep concern that prior legislatures have let annual $2.5 billion to $3 billion deficits fester, while draining our once healthy savings. The reality our House Coalition recognizes, and has to keep recognizing, is that the public also elected a Republican-led Senate. Our House Coalition passed a modest 25% tax on oil company profits, so we can receive fair revenue. We ended unaffordable subsidies. The House bill would reduce Alaska’s deficit by roughly $1.5 billion to $2 billion over the next ten years. It intentionally recognizes that a fair deficit fix can’t just rest on the backs of those with little privilege, little wealth, and no lobbyists. This House Coalition plan didn’t meet with Senate approval, and we all have to keep working to find common ground. But common ground isn’t leaving the deficit unsolved, and our economy in peril. Solving our budget deficit is now a math problem. A solution doesn’t leave lots of room for people to stand on ideological purity. Fair oil reform has to be part of a needed deficit reduction plan, in part because there is no source of revenue, on its own, that can solve a $2.5 billion to $3 billion deficit in a state that has largely run out of savings. We cannot afford a current oil tax system that taxes most oil fields in Alaska at either a 0% or meager 4% oil production tax. Currently the oil tax rate in North Dakota is 250% higher than Alaska’s, and Conoco calls North Dakota a good place to do business. Additionally, North Dakota oil royalty payments are about double Alaska’s oil royalties. So let’s drop the soundbite that Alaska, with its vast oil resources, is somehow a bad place to do business. Statesmen and stateswomen can bridge differences. Both sides agree $1.5 billion in oil company cash subsidies over the next ten years are unaffordable. Let’s focus on that area of agreement. The House has offered a compromise to eliminate the $1.5 billion in poorly crafted, unaffordable oil company cash subsidies. Legislators can join and do what we can agree upon now. Let’s agree to work this summer and fall, with oil consultants we’ve recently hired, to fix the rest of our oil tax system so that a full solution can be passed when session starts in January. And let’s fully fix our deficit. I want an Alaska people believe in, where people want to raise their families. Haggling over ways to NOT solve our deficit is going to drive away the Alaskans we need to teach our children, care for our seniors and build a better state.   Rep. Les Gara is an Anchorage Democrat and Vice Chair of the House Finance Committee

GUEST COMMENTARY: Democrats using propaganda over tax credits

A compromise to end cash payments to oil companies is on thin ice because of the propaganda perpetuated by Anchorage Representative Les Gara and the politics of the House Democrats. The oil and gas industry has always been Gara’s favorite target, and he’s launched a fresh campaign to hold hostage a compromise on cashable credits that will save Alaska a million dollars per day. For the past decade, the state has offered tax credit incentives to new explorers on the North Slope for developing new fields and to small companies. The state offers to buy back these tax credits in cash, if these companies do not produce oil in Alaska. The program worked, breathing new life into Cook Inlet and the North Slope. These incentives and a fair, competitive tax have drawn new companies to explore, develop and produce more oil. The larger, established companies like BP, Conoco, Hilcorp and Exxon are not eligible for cash credits. Legislators and the Governor acknowledge the state can no longer afford cash payments for tax credits. They’ve been volleying versions of bills to end these payments for months. Rep. Gara and his cohorts are telling Alaskans that the Senate proposal, backed by Gov. Walker, is a sham that simply replaces a credit today with deductions tomorrow, costing the state the same in the long run. This is where Gara’s fish tale becomes dangerous misinformation. Cash credits and tax deductions are not the same. Oil companies can only use the tax deductions if they produce oil. We all know that many exploration projects never produce a drop of oil so deductions from those projects will never be applied to an oil company’s state tax bill. In exchange for eliminating these cash credits, the Senate Majority suggests that these explorers be able to deduct their exploration expenses against future profits. Gara calls this a sham. Tax structures all over the world allow business to deduct their legitimate operating expenses and they allow companies to apply losses from their bad years against earnings from their profitable years. Gara again calls this a subsidy to the oil companies. So why would Rep. Gara push his cohorts in the Democratic House Majority to refuse a compromise that will end these credits? Could it be that he smells the opportunity to slip a significant tax increase into the same bill and skin some more hide off the industry? What Rep. Gara does not say is that there is little, if any, company profit left to tax. With oil around $45 per barrel, the state takes 77 percent of the sale value of a barrel of oil; the federal government takes 12 percent, leaving the taxpayer, the oil companies, with 11 percent.  In fact, at all oil prices from very low to very high, Alaska takes more from a barrel of oil, than the companies who invest the capital and take the risk. Now Gara wants to raise these taxes again so Alaska gets its “fair share.” That’s ridiculous. More oil in the pipeline is critical for Alaska, and we must fix our sights securely on that prize. With higher production come jobs for Alaskans, new money circulating through the economy and tax revenue to the state. New revenues from higher oil production go into the Alaska Permanent Fund, including the annual PFD. The current oil tax system works. Alaska is collecting more tax revenue at today’s low prices than we would have under the previous system. Companies are now investing in the North Slope fields, resulting in increased production of three percent in fiscal years 2016 and 2017. Gara’s House majority held Alaska hostage all session, demanding an income tax and excessive new taxes on the oil industry in return for passing things they actually agree on, namely: reducing cash credits, passing an operating budget, passing a capital budget and developing a long term fiscal plan. Rep. Gara’s rhetoric isn’t new. He’s been at this for years now; he mangles the facts and conjures up sound bites that prey on people’s genuine concerns for children, schools, families and our seniors. It’s time to do what’s right for Alaska, to quit playing games with the facts, fix the cash credits problem and pass a capital budget. Hal Ingalls is the president of Denali Drilling.

AJOC EDITORIAL: 75 million reasons SB 21 is working

What’s been obvious for several months became official on June 30. The 2017 fiscal year ended with a final average of 528,484 barrels per day of production on the North Slope. That is a 2.6 percent increase versus the 514,900 barrels per day last fiscal year, or virtually identical to the 2016 increase in production from 501,500 barrels per day in 2015. To put this in perspective, the last time the state saw consecutive years of production increases was in 1987-88 when North Slope production peaked at more than 2.1 million barrels per day. This would be a remarkable story in any circumstance given the number of early obituaries that have been written for North Slope production and the Trans-Alaska Pipeline System, but it is even more so considering the price environment and the ongoing attacks on the industry from Democrats in Juneau. North Slope crude averaged barely more than the breakeven point at less than $50 per barrel for the fiscal year and the House Majority continues to demand tax increases on production despite the proof of the current policy’s success staring them in the face from the Department of Revenue’s daily reports. The House Democrats want to double the effective tax rate at the current price, triple it should prices reach $70 per barrel, reduce deductions and eliminate the proven per-barrel incentive. The per-barrel production incentive is the only explanation why companies have continued to invest billions on the North Slope even after prices started to free fall not long after Senate Bill 21 took effect. They have certainly not seen the upside from the reduction in progressivity at high prices under SB 21; to the contrary they have paid far more in taxes than they would have had ACES remained in place. Under ACES they wouldn’t be paying any production taxes at the current price. In fact, they wouldn’t be paying production taxes until prices went past $63 per barrel. Because SB 21 taxes oil at a higher rate than ACES at low prices, the companies have taken the only tool at their disposal to reduce the effective tax rate: more production. Every additional barrel brings down the effective tax rate. It’s that simple, and it is a win-win for the producers and the state, which collects both the tax revenue and the additional royalty share. But never let a good fact get in the way of a Democrat argument. SB 21, which took effect Jan. 1, 2014, has now been in place for three full fiscal years. Since fiscal year 2013, the last full year of ACES, production has declined by a barely-measurable 0.6 percent overall (531,600 barrels per day to 528,400). That is an average annual decline rate of just 0.2 percent. The average annual decline rate during six years of ACES was 5 percent, or 2,500 percent greater than under SB 21. Math — the Democrats’ kryptonite — tells a staggering story when comparing where we’d be under the ACES decline rate versus SB 21. Had the 5 percent annual decline rate continued, fiscal year 2017 production would be 433,000 barrels per day, or about 95,500 fewer barrels per day than what we saw under SB 21. Adding up the actual production compared to the ACES decline rate over the past four years, the state has collected tax and royalty income from an additional 75.3 million barrels; the 2017 production versus ACES decline alone is an extra 34.8 million barrels. Democrats’ oil tax policies aren’t just bad. They are proven failures. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: End cash payments without raising oil taxes

For six months, politicians of all parties in Juneau have sung a similar song: the state can no longer afford to offer cash payments to oil and gas companies for work we’ve incentivized these companies to undertake. These cash payments are costing the state an estimated $1 million per day through the end of 2017. That’s a lot of money — $1 million could fund seven state troopers for a year. The $200 million we’ll owe in cash payments by the end of the year could fund the entire Department of Law and Department of Public Safety — for a whole year. Make no mistake: the incentives of cash payments and credits have worked. They spurred a renaissance in Cook Inlet oil and gas work, ending the rolling brownouts of six years ago. They’ve brought a new slate of fresh companies to the North Slope, who are exploring for the oil we’ll need to keep TAPS flowing strong. Yet, the state can no longer afford these incentives. Despite this year’s budget reductions, Alaska remains in a deficit. Oil prices are $6 to $10 lower going into the fiscal year starting July 1 than the state is forecasting. We all know that when you’re in a hole, the first thing you have to do is stop digging. And we can. There’s a simple way to end these cash payments. Let’s return to Juneau and finish the work before us. Let’s end cash payments for oil and gas companies. The Republican-led Senate Majority extended a new offer to the Democrat-led House Majority to resolve this issue — to stop the cash bleed. We’re willing to take up a compromise bill that addresses these cash payments and tax credits. Our offer was met with an immediate, outright rejection by the two House members negotiating this issue. The House likewise issued a flat refusal to a different proposal by Gov. Walker weeks ago. Ending cash payments isn’t enough for them — they’re willing to walk away unless they can force a significant tax increase on oil production. But the clock is ticking, and costs are accumulating. We remain optimistic that after their full caucus thinks over the $1 million per day implications of inaction, they will reconsider our offer to act on what we agree is in the best interests of Alaska. The Senate is standing by. Both the House and the Senate this session passed versions of a bill that would end cash payments to oil and gas companies. But, we’ve been unable to reach a final compromise. The House Majority is holding out, refusing to end cash payments unless we in the Senate agree to increase taxes on oil production, taking even more than the 77 percent of the profit we get now. That’s right, for every barrel of oil coming out of the ground, the State of Alaska reaps 77 percent of the profit at today’s prices. With the energy sector already losing jobs and struggling to weather global price pressures, now is precisely the wrong time to squeeze the industry that has funded our roads, schools and prisons for decades. The Senate believes, as many Alaskans do, that the current oil tax system is working for the state’s advantage. We’re taking in more revenue under our current tax system than we would have under ACES. More small, agile companies are working in our oil patch, which means more opportunities than ever for Alaska workers, support companies, and service sectors. While we disagree on broader changes to our oil tax regime, the House, Senate and governor do agree that we must end cash payments to oil companies. We can, and should, end this program without delay. The House Majority says they want to end these payments — we ask them to act with us to accomplish this work for the good of Alaska. We ask the House Majority to reconsider. Politics remains the art of the possible, which requires compromise. We can only advance those issues on which we all agree — and we’ve all agreed the cash payments must end. Sen. Pete Kelly, R-Fairbanks, is the president of the Alaska Senate.

GUEST COMMENTARY: What happened to the 90-day session?

Over 10 years ago, Alaskans voted to limit the legislative session to 90 days with the hope that the Legislature would finish its work on time and under budget. Since oil prices dropped in 2014, however, the Legislature has been unable to finish the state’s business in 90 days or even 120 days. We have endured extended session after extended session followed by special sessions. Is it time for Alaskans to amend our Constitution to establish an effective 90-day limit on legislative sessions? At the time of statehood in 1959, the Alaska Constitution did not place any limit on the length of the legislative session. With a citizen Legislature, the framers of our Constitution believed that the pressures of work and home would provide incentives for legislators to keep sessions short. Initially, the framers were right: the Legislature averaged 86 days in session from 1959 to 1970. When Alaska began receiving substantial oil revenue, however, the Legislature became unable to efficiently finish its work. From 1971 to 1985, the Legislature averaged 141 days in session. So in 1984, Alaskans amended Article II, § 8 of our Constitution and limited the session to 120 days. The Legislature responded to the constitutional change and reduced the average length of session from 141 days to 130 days from 1986 to 2007. With increasing concerns about the cost and length of legislative sessions, a voter initiative in 2006 shortened the session in Alaska Statutes to 90 days. Since the voter initiative took effect in 2008, the Legislature has only met the 90-day limit on five occasions and has failed to meet the deadline every year since 2013. This year, the Legislature is on a path to set a new record for consecutive days in regular and special sessions — toppling the record of 165 days set in 1981. The drop in oil prices has made it difficult for the Legislature to make budget compromises and finish its work on time. In contrast, when Alaska had substantial savings from oil and gas taxes, the Legislature worked out compromises by making additional capital appropriations to individual districts. But those savings have disappeared with the oil price drop that began in 2014. The Legislature ignores the statutory 90-day limit because of the long-standing legal principal that the Constitution always controls when there is a difference between a statue and the Constitution. As a result, the Legislature has rolled over the 90-day limit for the last three years. In the midst of a recession and long-term financial challenges, there is no end in sight to extended and special sessions. Amending the Constitution to establish an effective 90-day limit will serve three primary purposes. First, it will force the Legislature to focus its attention on state finances and shorten the schedule for adopting a budget. This year, for example, the financial challenges were well-known by the first of January. Indeed, the Legislature kicked the same issues down the road in 2016. While a stock market crash or major international events just days before the end-of-session might provide a reason to take more time, the current challenges have existed for months and the solutions are apparent. Second, a 90-day session will reduce the quantity of “personal” legislation. A 90-day session will make sure the Legislature focuses its attention on the most important issues and is less likely to get side-tracked with special interest matters. Third, if circumstances arise that require a special session, the governor will be able to narrow the agenda to vital issues and prevent consideration of non-essential legislation. There is no golden rule for legislative session length. For example, the Kansas, Montana, North Dakota, and Texas Legislatures meet every other year. The Oregon Legislature meets for 35 days in even-numbered years and 160 days in odd-numbered years, while the Washington Legislature meets for 60 days in even-numbered years and 105 days in odd-numbered years. Hawaii meets for just 60 legislative days. The National Conference of State Legislatures reports that states “with no session limits are more likely to have late state budgets.” The failure to adjourn in 90 days also limits the ability for Alaska to have true citizen legislators — people who have regular jobs and serve in the Legislature. Today, we have commercial fishermen, contractors, administrators, lawyers, and miners who bring real-world experience to their legislative service. The unpredictably long sessions make it more and more difficult for citizen legislators to serve. In the long-term, repeat extended and special sessions will lead to more full-time legislators and fewer citizen legislators. Since passing the 90-day session initiative, Alaskans have come to expect the Legislature to finish its work on time and under budget. In challenging financial times, however, the Legislature appears unwilling to meet Alaskans expectations. Now is the time to amend the Alaska Constitution and limit the session to 90 days. Rep. Matt Claman is a Democrat representing District 21 in Anchorage.

GUEST COMMENTARY: Infrastructure plan could be stymied by lack of key resources

Recently, President Trump announced a $1 trillion plan to fix the nation’s roads, bridges, dams, and airports. And while Congressional approval may hinge on the specifics of funding these projects, Americans should be concerned with whether the country can obtain sufficient metals and minerals to undertake such a large effort. There’s no doubt that a robust plan to rebuild America’s declining infrastructure could spur activity and employment throughout the economy. And thankfully, America enjoys a particularly rich endowment of the copper, nickel, zinc, and other metals that serve as building blocks for new roads, bridges, and dams. But acquiring enough raw materials in a timely fashion may prove problematic since America’s mining operations are currently beset with a number of obstacles. For starters, access to the mineral resources needed for infrastructure renewal could well be thwarted by conflicting and duplicative mine permit reviews conducted by multiple federal and state agencies. It currently takes seven to 10 years for companies to successfully obtain the necessary permits for a major new mining operation. Such delays have become the inevitable outgrowth of too many agencies moving too much paperwork too slowly. President Trump acknowledged this problem recently when he contrasted current permit delays with the comparatively brief five-year timespan needed to build the famed Hoover Dam. In the current mining environment, it would take more than five years simply to open new mines that could provide the requisite metals and materials for the dam itself. Significantly, America is home to an estimated $6.2 trillion in minerals and metals reserves. But this advantage is compromised when companies face long delays to open new mining operations. This is all the more egregious when competitors in countries like Australia and Canada—with similar environmental standards—typically receive mining clearances in only two to three years. An added hurdle for mining projects is former President Obama’s 2015 decision to further restrict mining activity on 67 million acres of mineral-rich federal land. This includes a proposal to withdraw 10 million acres of western lands to conserve the habitat of the sage grouse, a bird that is neither threatened nor endangered. In fact, the government’s own environmental assessment has determined that wildfires and invasive species of vegetation—not mining—have periodically threatened the bird’s habitat. The bird’s population has already increased 63 percent since 2013, thanks in part to contributions from state, local, and private conservation plans that have been largely ignored by federal planners. If such land use restrictions are left in place, however, they will simply combine with permitting delays to further limit access to the vast majority of the nation’s mineral reserves. These bottlenecks will directly affect any efforts to rebuild domestic infrastructure, since federal lands in the Western United States produce much of America’s mineral wealth. Without more timely access to these resources, the nation will be forced to continue its growing and risky dependence on imports to supply critical minerals needed in both high-tech and industrial manufacturing. The United States is already entirely import-dependent for 19 key minerals, and more than 50 percent import-reliant for another 24 minerals. With half of the nation’s mineral wealth already off-limits or under restrictions, further limitations and land withdrawals will undoubtedly increase America’s import reliance—and from countries that may lack comparable environmental protections. Thankfully, Washington is taking notice. Interior Secretary Ryan Zinke has asked for a 60-day review of new restrictions placed on mining in federal lands—a key step toward potentially accessing the minerals and metals needed for President Trump’s infrastructure plan. Reviews are also underway to streamline the duplicative permitting process for major projects. America can minimize such impediments through better decision-making, while still retaining environmental safeguards. And that could help to build the foundation for a modern infrastructure that the nation urgently needs. ^ Hal Quinn is president of the National Mining Association.

AJOC EDITORIAL: Crocodile tears for White House press corps

The liberals with bylines in the White House press corps are in a snit about receiving their overdue comeuppance from an administration that has decided to fight back. At the top of the latest outrage list from the press is the decision to prohibit video cameras at a few of the daily presidential briefings, which led to the priceless audio of CNN’s Jim Acosta channeling his inner Mortimer Duke from the end of the movie “Trading Places” by yelling at Press Secretary Sean Spicer to turn the machines back on. After all, what would America do without daily footage of grandstanding reporters pushing the Russia story that a CNN producer called “mostly bullsh*t” and one of the channel’s top contributors Van Jones called “a big nothingburger” in new undercover videos from James O’Keefe? CNN just had to retract a story from its bogus Russia coverage, apologize to its target and accept the resignations of three top staffers responsible for it. Now comes news that former Alaska Gov. Sarah Palin is suing the New York Times over its despicable June 14 editorial about the attempted assassination of GOP legislators by a Bernie Sanders supporter that resurrected the debunked narrative that she was responsible for inspiring the man who shot 19 and killed six at an event hosted by Rep. Gabrielle Giffords in 2011. It is extremely difficult for a public figure such as Palin to win a libel lawsuit, but the two high hurdles are within reach: malice and reckless disregard for the truth. Palin also hired the same legal team that represented Hulk Hogan in his successful lawsuit against Gawker that forced the company into bankruptcy. We are far past the time when the industry that is supposed to hold the powerful to account is held responsible for its own destructive actions and thumb-scaling the news. The press will claim that it will acknowledge its mistakes and falsehoods, but that the infamously tweeting President Donald Trump never apologizes for his. That would have more credibility if they didn’t let the last president skate for an unending stream of dishonesty and major scandals that make the nonsense about Russia cooked up as an excuse for Hillary Clinton’s loss pale in comparison. Former President Barack Obama lied repeatedly about the Affordable Care Act when he claimed premiums would go down (they’ve gone up by 105 percent) and that “if you like your doctor you can keep your doctor” (you can’t). His administration lied about Benghazi, the IRS targeting conservative groups, Fast and Furious, and the Iran deal, and even when the press bothered to cover those stories it was always from the angle that they were just Republican sideshows. Another perfect example is Afghanistan, where the press has suddenly discovered our troops still are after eight years of Obama. Body counts and daily coverage disappeared under Obama even as casualties more than tripled with nothing to show for it. The media whines they are being bullied, Acosta claims CNN is being blackballed from asking questions at daily briefings, and somewhere the world’s tiniest violin is playing for them. Obama’s administration monitored Associated Press phone records and the phones of Fox News reporter James Rosen’s parents, and prosecuted more people under the Espionage Act than every other president in the last 100 years combined, yet Trump turning off cameras in the press room is the greatest attack on the First Amendment ever. The whining, insufferable White House press corps owes everyone a Kit Kat. Give me a break.

AJOC EDITORIAL: Democrats destroying the village to save it

Democrats in Juneau deserve credit for at least one thing: what they lack in good ideas they more than make up for in chutzpah. Now 10 days from a government shutdown at the time of this writing, the legislative session has become a monkey fight inside a clown car driving into a dumpster fire. The House Majority threw a tantrum last week after Gov. Bill Walker took away their income tax woobie in his proposed compromise to end the standoff with the Senate by passing an 11th hour budget funded entirely with the Permanent Fund Earnings Reserve including a $2,200 dividend check that will cost the state more than $1.3 billion on top of its $2.7 billion deficit. Like a child who cleans their room by stuffing all the toys and dirty laundry into a closet, House Majority leaders then proceeded to claim that they had done their job by passing a budget and asked for a cookie. House Republicans aren’t completely blameless in this mess, either. Half their caucus, including their leader Charisse Millett, voted for the budget-busting PFD. Perhaps she could better spend her time trying to figure out what her principles are rather than combing Gavel to Gavel footage looking for reporters goofing off in the gallery while her members make ridiculous analogies to Pearl Harbor, Ho Chi Minh and Vladimir Putin. Some soul-searching is probably required when you’re on the wrong side of a vote by Les Gara. But what the House Majority argument boils down to is this: they are willing to drive with the pedal down over the fiscal cliff if they can’t skim $700 million from Alaskans’ paychecks and double the tax rates on the beleaguered oil industry. They must destroy the village in order to save it. And here comes the chutzpah. On June 20, S&P Global Ratings put the State of Alaska back on credit watch negative as a result of the impasse. House Democrats immediately put out a statement claiming the notice vindicated their plan. Never mind that the state would be lucky to end up with junk bond status from the ratings agencies if the Senate approved their budget and Walker signed it. Democrats keep tweeting about Kansas, where a Republican Legislature rolled back previous tax cuts to boost state services. They fail to note that the tax increases in Kansas are projected to raise about $600 million from a population of nearly 3 million to fill a budget deficit of about $350 million. House Democrats want to raise taxes by more than that during a recession on a population a quarter the size in a state with some $17 billion in accessible savings accounts. The comparison isn’t even apples and oranges. It’s apples and ham hocks. Under the Democrats’ plan, middle class earners would get hammered while their favored constituencies of state employees and the failing education system are held harmless. As an aside, when are Democrats ever going to be held accountable for the results of an education system they own and operate that consistently delivers some of the worst outcomes in the nation? More than half of our high school graduates need remedial English and math education at the university level. Herb Schroeder, the founder of an actual education success story with the Alaska Native Science and Engineering Program, calculated that it costs the state and students $42 million per year trying to make up the ground lost in a K-12 system that spends more per capita than almost any other state. That we find ourselves standing on the brink of a state government shutdown is truly inexcusable. Both the Senate and House agreed on some major fiscal reforms at the beginning of the session: using the Permanent Fund earnings, guaranteeing a dividend of $1,000 or $1,250, and eliminating cashable oil tax credits for small developers. Passing the agreed-upon measures would have set the state on a sounder fiscal path and could have been done months ago, but the Democrats can’t and won’t change their tax-and-spend stripes. They cannot accept the fact that the state does not yet need an income tax, and refuse to recognize that there is not a bottomless pool of money to drain from the oil industry that has seen thousands of layoffs and now prices slipping back toward the breakeven point on the North Slope. They keep calling a restructured Permanent Fund and smaller dividend an income tax on all Alaskans in a tortured bending of the language. The IRS certainly treats the PFD as income, but in no way is merely existing within the borders of the 49th State the same as working for a paycheck. Then again, not knowing the difference between what is earned and what is given is what makes them Democrats. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: House Majority: We won’t agree to ‘easy fix’ of PFD cut alone

Last week, in the absence of a true and complete fix to the state’s fiscal crisis from the Alaska Senate, the House passed, with bipartisan support, an amendment funding a full Permanent Fund Dividend as provided by law. This was not some bargaining tactic or political maneuver; instead, it was us saying that we are fighting for you, hardworking Alaskans, and your money. We have said from the beginning that we cannot support a plan that fills the deficit on the backs of Alaska workers, seniors and children. The current PFD-only plan supported by the Senate does just that, as a cut to the PFD reduces the income of every Alaskan. The Senate says they are the “only thing standing between Alaskans and an income tax” yet they are pushers of a plan that levies the most inequitable, unfair and economically damaging tax of them all: a $1,250 reduction in income for every Alaska man, woman and child. It seems that the only people the Senate wants to protect are out-of-state workers, the wealthy and shareholders of multinational oil companies. It is unfortunate that Gov. Bill Walker sided with the Senate in their effort to cut the PFD once again. By not including Senate Bill 23 (the capital budget) in the second special session call, the possibility of a full PFD was virtually eliminated. Additionally, with no other revenue options in the call, we may be forced to take the Senate’s word that they’ll discuss actual fixes to our fiscal mess (i.e. new revenues, including higher taxes on the oil companies) at a later date. This is not a good way to negotiate a compromise that will prevent the threat of a government shutdown from coming up year after year after year. We all know the current state of Alaska’s finances, and they are not good. But there is a way out of this mess, where all Alaskans contribute fairly to the vibrant and bright future of our state, where our communities are safe and our kids get a great education, where all Alaskans have an opportunity to achieve great things, be self-sufficient, and provide for themselves and their families. But until we put a comprehensive fiscal plan into place, we will oppose fiscal Band-Aids that put the burden on working Alaskans. The Alaska House Majority Coalition continues to strive for a fair, balanced and comprehensive fiscal plan that will bring certainty to Alaska families and businesses. We will continue to negotiate with the Senate and the House Republican Minority to achieve one. And we are firmly committed to averting a government shutdown. But until everyone comes to the table ready to find reasonable compromise and address our fiscal realities, we will not simply give away your money as an easy fix. Rep. Gabrielle LeDoux, a Republican, is the chair of the House Rules Committee, and represents House District 15, which covers East Anchorage. Rep. Chris Tuck, a Democrat, is the House Majority Leader, and represents House District 23, which stretches from Midtown to South Anchorage.

GUEST COMMENTARY: An engineering icon and economic engine turns 40

On June 20, the Trans-Alaska Pipeline System reaches a significant milestone: 40 years of operations. TAPS stands as one of the world’s engineering marvels and among Alaska’s most popular landmarks. It’s a symbol of sustained operational excellence, environmental stewardship, community and business partnerships, innovation, integrity, and people who embody Alaska true grit. TAPS remains at the heart of Alaska’s economic health; throughput from North Slope producers since TAPS startup now exceeds 17.5 billion barrels, and has generated $168 billion in cumulative deposits to the state’s general fund. Oil flow down TAPS helps fuel Alaska government and businesses, communities, schools and nonprofit organizations, and creates jobs and opportunities for thousands of Alaskans. From the onset, TAPS’ architects pondered daunting obstacles: Constructing an 800-mile pipeline across some of the world’s most challenging, unforgiving and unique wilderness. Navigating a path to approval lined with mammoth political, environmental and logistical hurdles. Even as America starved for domestic energy resources, many doubted that this bold, one-of-a-kind pipeline would even be built. Some fiercely opposed it. But the TAPS owner companies and many Alaska leaders saw the potential transformative value of TAPS for Alaska and Alaskans. They advocated, negotiated, fought and gained approval for TAPS construction. Then 70,000 men and women raced north to be part of this once-in-a-lifetime project. In October 1975, the workforce peaked at more than 28,000. They built TAPS and the Dalton Highway, transformed Prudhoe Bay into an energy and economic hub, and created a major marine terminal in Valdez, turning it into one of Alaska’s leading ports. The mantra was, “They didn’t know it couldn’t be done.” They got it done – in just over three years. Early predictions suggested TAPS wouldn’t reach 20 years of operation, much less 40. But employees’ dedication, system modernization, North Slope production that exceeded expectations, and ongoing application of lessons learned have sustained TAPS, as has what we at Alyeska Pipeline Service Company, the pipeline operator, call TAPS Pride. It’s a sense of ownership held by those connected to the pipeline — Alyeska employees, contractors, family, friends and tens of thousands of people who have contributed to the TAPS legacy. Upon seeing TAPS, visitors are awed. More than half of the pipeline runs above ground. That engineering decision, due to seismic and permafrost issues, coupled with spectacular Alaska backdrops, make TAPS one of the world’s most photographed pipelines. It is fascinating to talk to visitors at the TAPS viewing site in Fox, or to read social media posts about personal TAPS experiences. The most interesting tales come from TAPS workers. A quarter of the current Alyeska workforce of around 800 has been with the company for more than 20 years; some were here at startup. Several family members are third-generation employees. More than 90 percent of the diverse Alyeska workforce lives in Alaska; more than 20 percent are Alaska Native; and 70 percent of TAPS contractor companies are based in Alaska. Those Alaska roots are a foundation of TAPS pride and operational excellence. The pride extends to the communities where our personnel live and work. From 1978-2016, Alyeska purchased more than $25 billion in goods and services and paid $32 million in non-property taxes and fees, in addition to taxes paid by the TAPS owners. Over that same time, the company contributed $41 million in charitable contributions and $7 million in scholarships. Since 2001, Alyeska staff personally donated more than $1 million and more than 24,000 volunteer hours. Like any 40-year run, there have been performance highs and lows. Throughput numbers have certainly swung. At peak flow in 1988, 11 pump stations helped move 2.1 million barrels of oil a day; daily averages dropped just about every year since. In 2016, oil throughput, now moved by only four pump stations, was 517,868 barrels a day. It marked the first year of a throughput increase since 2002, and 2017 numbers so far are running above 2016. Those upticks feed our 40th year of operations with fresh enthusiasm and optimism. More oil through TAPS is the path to smoother, more reliable and efficient operations, and more long-term benefits for Alaskans. Recent reports of discoveries and increased production on the North Slope is great news. While there has been a lot of change on TAPS over 40 years, one unwavering constant remains: the commitment of the people who work on TAPS today to provide safe, reliable, operational excellence, 24 hours a day, seven days a week, resilient amid all of Alaska’s extreme geography and weather. This should give us all — Alyeska personnel, TAPS contractors, Alaskans, the nation — a vision of another potential TAPS milestone: 40 more years of successful operations across Alaska. Admiral Tom Barrett, U.S. Coast Guard (ret.), has been president of Alyeska Pipeline Service Co. since 2011. Read stories or share your own at Alyeska’s 40th anniversary website: www.alyeska-pipe.com/NewsCenter/AnniversaryStories.

GUEST COMMENTARY: Spending cuts, not tax hikes, will restore fiscal balance

With two weeks to go before a potential government shutdown, the state legislature appears no closer to writing a budget or narrowing the $3 billion deficit than when the special legislative session began. Both sides are sticking to their stories. There is agreement on dipping into the Alaska Permanent Fund. But Gov. Bill Walker and the Democratic-led House coalition still insist on raising your taxes. The Republican-led Senate still wants to cut spending and impose a hard cap to restrain future excesses. The Senate has much the better end of this debate. Here’s why. The House and the governor are so afraid of their own tax increase that they hid behind school children when they approved it, calling it an “education tax,” even though the revenues would not be limited to education spending. That amounts to carrying the water for the big spenders, tax hikers and government unions. Walker’s stair-step “compromise” proposal would impose a de facto income tax, but he won’t call that an income tax either. The Senate, on the other hand, voted decisively against an income tax in the regular session. Its members owned their decision, and there isn’t any reason to think they will act differently in the special session. Nor should they. There’s also no reason to believe Alaskans will get behind the idea. A recent poll found 58 percent of state residents oppose an income tax. But instead of bowing to this reality, Walker offers vague platitudes about a “broad-based tax” while refusing to call it what it really is. The reason is simple: He’s in trouble politically, and spelling out how he wants to increase taxes will increase that trouble. Walker now ranks in the bottom five when it comes to popularity among governors, with a 53 percent disapproval rating. Part of his popularity problem is the hit he took last fall for cutting in half the Permanent Fund dividend. That experience should serve as an object lesson for the governor as he and his allies once again ponder ways to take more money out of Alaskans’ pockets. Like virtually every other state that finds itself in dire fiscal straits, Alaska has a spending problem, not a revenue problem. That’s why the response to the current crisis should be judicious spending cuts in the current budget, coupled with a real spending cap — lower than the one imposed in 1982 — that will help prevent the problem from arising again. Whatever happens in Juneau, Alaskans will be forced to bear the consequences of past budget mismanagement through diminished services, a reduced dividend check, an income tax, or some combination of those options. But instead of implementing policies that perpetuate a bloated bureaucracy, we should reinforce good government and set Alaska up for future economic growth. In fact, an income tax would make the problem worse, as Adam Millsap, a research fellow at the Mercatus Center at George Mason University told the state Senate Labor and Commerce committee in April. “States experience slower per capita income growth following the adoption of an income tax,” he told the lawmakers. Raising taxes won’t solve the problem. The governor is right about one thing. The state’s revenues should match up better with the state’s spending. He’s just wrong about which needs to change. Jeremy Price is Alaska state director of Americans for Prosperity. He lives in Anchorage.

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