Legislature(2017 - 2018)HOUSE FINANCE 519
03/29/2017 05:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB115 | |
| Public Testimony: All Other Lios, Offnets | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 115 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 115
"An Act relating to the permanent fund dividend;
relating to the appropriation of certain amounts of
the earnings reserve account; relating to the taxation
of income of individuals; relating to a payment
against the individual income tax from the permanent
fund dividend disbursement; repealing tax credits
applied against the tax on individuals under the
Alaska Net Income Tax Act; and providing for an
effective date."
5:35:58 PM
^PUBLIC TESTIMONY: ALL OTHER LIOS, OFFNETS
5:37:15 PM
BILL CORBUS, SELF, JUNEAU, spoke in support of the bill,
which he believed was a very important step in solving the
state's fiscal dilemma. He believed an income tax and the
use of the Permanent Fund would fill most of the remainder
of the fiscal gap. He believed it was a good solution
because it would urge Alaskans to be involved in the
legislative budget process.
5:38:50 PM
DAVID OTNESS, SELF, CORDOVA (via teleconference), spoke
against the bill. He found it astounding that so few
testifiers were holding past governors and lawmakers
accountable for the current budget problem. He was not an
opponent of income tax, but he did not support giving
credits to oil companies. He could not accept the
provisions of the bill under the current circumstances. He
believed the bill would hurt individuals who were less well
off. He equated the bill to stealing from the mouths of
babes.
5:42:05 PM
NANCY BIRD, SELF, CORDOVA (via teleconference), testified
in support of the bill. She spoke out of concern for the
state's future. She wanted a stable economy that could
support roads, infrastructure, and the management of
resources at places like Department of Fish and Game. She
wanted to stop the bleeding from the state's reserves. She
supported an income tax and wished the previous income tax
had never been discontinued. She urged the legislature to
limit its use of budget cuts. She opined that further cuts
would hurt the economy and the state's citizens.
5:43:52 PM
RON KEFFER, SELF, HOMER (via teleconference), spoke in
support of the legislation. He had testified on a previous
version of the bill and saw that much of the public
comments had been taken into account in the new bill
version. He stated the income tax was now based on adjusted
gross income. He stated that the use of the Permanent Fund
created an appropriate use of the funds into the future. He
believed the state's budget would be on a more positive
course. He did not support the Senate's proposal of
"draconian" cuts.
5:46:15 PM
CLYDE BOYER, SELF, HOMER (via teleconference), was in favor
of an income tax. He believed it would be wise to consider
how the previous income tax had been implemented. He
thought the implementation should be in 2018, not 2019. He
supported the use of rates that would enhance the state's
revenues. He thought if the state did its own tax return
structure it would require a large department to administer
the tax. He supported basing the tax off the federal taxes.
5:48:20 PM
JULIA PERSON, SELF, HOMER (via teleconference), testified
in support of the bill. She supported an income tax. She
shared details about her life and history in Alaska. She
spoke to individuals taking money with them when they left
the state. She wanted a system that was as fair and
equitable as possible.
5:49:28 PM
JAKE JACOBSON, SELF, KODIAK (via teleconference), believed
the bill should be simplified; he believed all bills should
only deal with one issue. He was not opposed to an income
tax. He was strongly opposed to restructuring the Permanent
Fund Dividend (PFD), which he equated with stealing from
babies. He did not support oil credits to oil companies. He
stressed that the PFD was not welfare, it was the right of
Alaskans. He asked the committee to keep it simple.
5:51:21 PM
STEPHEN TAUFEN, SELF, KODIAK (via teleconference),
testified against the bill. He did not believe an income
tax penciled out. He believed the state needed a resource
economic sovereign commission related to resources in
Alaska including timber, fisheries, and other. He spoke
about timber resources. He strongly opposed a state income
tax.
Co-Chair Foster recognized Representatives Chris Birch and
DeLena Johnson in the audience.
5:54:02 PM
PAT HOLMES, SELF, KODIAK (via teleconference), testified in
support of the bill. He respected the legislature for
trying to raise revenue. He recalled the past when the
budget had been able to support education, the ferries, and
other services. He believed the bill had real promise. He
believed subsidies and tax credits for oil companies needed
to be cut. He would like to see the House and Senate
resolve conflict of interest issues. He thanked the
committee for its work.
5:56:48 PM
DOUG WALRATH, SELF, NOME (via teleconference), asked his
young children to introduce themselves. He supported the
legislation. He was concerned for what the state faced in
the future if the fiscal crisis was not addressed at
present. He was in favor of a comprehensive fiscal plan. He
wondered where the state would be in ten years if a plan
was not implemented at present.
5:59:11 PM
ERIC OSBORNE, SELF, NOME (via teleconference), spoke
against the bill. He believed the legislature was putting
the cart before the horse. He spoke against subsidies for
oil companies. He stated that Alaska was a lone example of
otherwise failed resource states. He spoke to money pouring
into a resource-rich state while people got poorer and
poorer. He spoke against restructuring the Permanent Fund,
which he believed would lead the state towards becoming a
failed resource state. He spoke about past state leaders.
He believed they were becoming political mercenaries. He
asked the legislature to get its priorities straight and to
tax the resources coming out of the ground.
Co-Chair Foster relayed that the committee was also hearing
HB 111 that was aimed at addressing oil and gas taxes and
credits.
6:02:35 PM
SUE STEINACHER, SELF, NOME (via teleconference), urged
support of an income tax. She stated the cuts that had
already come from the PFD took the same amount of money
from a child or adult. She believed the income tax would
balance the fairness of its impact on residents. She
applauded the committee for its responsibility to promote
an income tax.
6:04:21 PM
GEORGE PIERCE, SELF, KASILOF (via teleconference), spoke in
support of a state income tax; however, he opposed the
bill. He was against taking money from the PFD. He stressed
that the people's wealth was disappearing. He supported a
PFD advisory vote for the people to decide on the issue. He
disputed earlier testimony that the bill would result in a
$1,250 PFD payment. He noted there was another bill that
would reexamine the issue every three years. He believed it
should be called the destruction of the PFD. He supported a
cap on government spending. He underscored that the
legislature got the state into its budget predicament. He
supported taxing s corporations and limited liability
companies. He stressed the legislature should make cuts in
its own backyard. He did not support subsidies to oil
companies.
6:07:42 PM
KEN HUCKEBA, SELF, WASILLA (via teleconference), testified
against the bill. He spoke to extravagant state
expenditures. He believed it was welfare to take money from
people who earn money for a living to give a PFD. He spoke
against blowing huge sums of money on lease sales. He did
not think it was possible to tax the state out of the
spending problem.
6:12:31 PM
AEDENE ARTHUR, SELF, BUTTE (via teleconference), testified
in support of an income tax. She shared that she and her
husband had moved to Alaska in 1968 and had taught in
various villages until 1982. She provided information about
her family. Most of the individuals in her family qualified
for Medicaid. She was thankful to receive teachers'
retirement. She did not believe the bill should pertain to
both the PFD and income tax. She was tired of the oil
industry not paying its share and of companies coming into
Alaska and developing things and spending the state's
money. She believed individuals working seasonally in
Alaska should be paying a non-resident tax. She thanked the
committee for its work.
6:16:51 PM
GHERT ABBOTT, SELF, KETCHIKAN (via teleconference), spoke
in support of the income tax contained in the bill. He
believed the only alternative to an income tax were further
cuts to the PFD and a state sales tax. He stated a
progressive income tax spread the financial pain more
equitably. He hoped the legislature would pass the bill.
6:18:18 PM
STEVE ST. CLAIR, SELF, WASILLA (via teleconference),
testified in opposition to the bill. He believed the
legislature had increased the budget above and beyond what
the people wanted. He did not support cuts to the PFD or a
regressive tax via the change to the PFD. He suggested no
changes to the dividend and substantive cuts to the state
budget. He believed most legislators were being dishonest,
ignorant of facts, or incompetent. He stated that too many
Alaskans were oblivious to the budget issues. He advised to
do no harm to Alaskans.
6:20:41 PM
ABIGAIL ST. CLAIR, SELF, WASILLA (via teleconference),
spoke against the bill. She believed the legislature was
overspending. She urged the legislature to manage its money
appropriately. She discussed that the state had a large
population of veterans, herself included. She did not
support taking money from the PFD. She believed the
legislature was responsible to run the state as efficiently
as possible. She concluded that funds were limited and
there were other options available.
6:22:29 PM
BETH FREAD, SELF, PALMER (via teleconference), was against
the bill. She believed there had been disingenuous
statements made by legislators that the state was in a
financial crisis. She spoke to the state's savings. She
detailed the legislature was robbing legacy funds from the
Permanent Fund. She believed the legislature was robbing
residents.
6:24:34 PM
NICK STEEN, SELF, WASILLA (via teleconference), spoke
against the bill. He stressed the "wants" had not been cut
from the budget. He believed the "needs" should be funded.
He listed the legislative chef, the Anchorage LIO, the
gasline, and other as unnecessary expenses. He supported a
clean and simple program, not the one established in the
bill. He did not believe the state needed additional
revenue at present.
6:26:23 PM
MARTIN SPARGO, SELF, WASILLA (via teleconference),
testified in favor of the bill. He thanked the sponsors for
their work. He opined that plenty of cutting had already
occurred. He referred to a publication from March 25 and he
shared that he commercial fished. He was unclear on the
withholding for independent contractors. He referred to a
note where the requirement would be removed. He would
prefer to not have to collect from his employees who were
independent contractors. He pointed to other provisions
such as like-kind exchange. He was curious how the tax
would be implemented.
Co-Chair Foster asked Mr. Spargo to email the committee and
he would follow up with an answer.
Co-Chair Seaton clarified that the independent contractor
portion would be removed from the bill. He referred to the
like-kind exchange, which was a bit more complicated and
some details had to be worked out.
6:30:49 PM
JOHN DULL, SELF, SITKA (via teleconference), spoke in
support of an income tax, but he believed the bill fell
short of rolling out a proper income tax. He asked the
committee to research brackets and to forget about the PFD
credit. He implored the legislature to enact an income tax.
He supported a 2018 implementation date as opposed to 2019.
He thanked the committee for its work.
6:32:31 PM
RACHEL NEUENDORF, SELF, SOLDOTNA (via teleconference),
testified against the bill. She spoke in support of drastic
cuts to state government. She asked how much it would cost
to implement the tax. She believed the PFD had become an
entitlement, she suggested getting rid of it. She
recommended taxing tourists and other. She did not want to
spend more and more income on the state's budget.
6:34:44 PM
BILL WARREN, SELF, NIKISKI (via teleconference), spoke in
strong support of the bill. He shared that he was a 66-year
resident. He stressed that the state had a budget crisis
and a balanced approach to the problem was needed. He
stated the tax proposed in the bill was fair. He applauded
the hard work of the finance committee. He referred to
Alaska Gasline Development Corporation (AGDC). He thanked
the committee for its hard work. He believed it was
necessary for everyone to work together.
6:36:58 PM
ROCKY EMERSON, SELF, NIKISKI (via teleconference), spoke
against the bill. He shared that he is a disabled veteran.
He believed the use of the Permanent Fund should go to a
vote of the people. He suggested a PFD buy-out option for
senior residents of the state. He thought an income tax
would be better than a sales tax, particularly for
residents on a fixed income. He referred to savings
accounts the legislature had not considered. He did not
want to have to leave Alaska and could not afford to leave.
6:39:12 PM
MARY NANUWAK, SELF, BETHEL (via teleconference), spoke
against the bill. She stressed that the current session
resembled the sessions that had occurred in the past. She
underscored that the monetary problems facing the state
were the fault of the legislature, not of the state's
citizens. She had been paying to the State of Alaska her
entire life and she had received nothing in return, but a
denial of needed services. She thought it was shameful. She
spoke to negative impacts on residents. She shared that she
listened to legislative sessions daily. She continued that
many Native people from rural areas had not been testifying
because the legislature did not have translators for non-
English speakers.
6:44:54 PM
SARAH VANCE, SELF, HOMER (via teleconference), opposed HB
115. She represented one of the families that suffered
greatly from the cut to the PFD. She had a one-income
family of six. She believed in an income tax but a simpler
version. She opposed the state touching the PFD. She agreed
with those people who had testified that they could not
trust their legislators. She emphasized not taking the PFD.
6:47:24 PM
ROB LUND, SELF, HOMER (via teleconference), read prepared
testimony on behalf of his wife, Judith Lund:
It is evident from Alaska's current budget problems
that maintaining an economy that is essentially
supported by a single industry puts the state, the
people, and their future in a precarious position.
Without a diversified revenue base, Alaska faces an
uncertain future, controlled in large part, not by
Alaskans but by wealthy and powerful corporations and
by institutions from other states and other countries.
Without a diversified revenue based, controlled by
Alaskans, our state and our fellow Alaskans, are in a
dangerous position. Resource extraction has been, and
will continue to be, our major industry, but it is
apparent that this reliance has [inaudible] and lead
to a complacent approach to our state's future.
Because we are a small state in population, we face
special challenges in solving our problems. The
residents of Alaska should be expected to assume
responsibilities both for funding our state and
determining the services to be offered. Taxes are the
means by which that is achieved. An income tax has two
desirable features. It most fairly distributes the
burden of funding and it requires commitment to
supporting the services we need to prosper and grow in
the present and for years to come. Even if we could
cut our way to a balanced budget without drastically
compromising the state's economy, I would still be in
favor of this tax because it requires a commitment to
the future of our state and by the citizens of the
state and that seems to me to be an issue of real
importance. I strongly support this bill and urge our
representatives to vote for it. It is an intelligent
effort to solve Alaska's budget problems and it is a
path to a more secure and prosperous future.
6:49:53 PM
PAMELA BRODIE, SELF, HOMER (via teleconference), supported
HB 115. She was happy to see the tax was graduated. She
opposed capping the PFD. She thought that capping the
dividend was tantamount to taxing all Alaskans at the same
level, making it the most unfair way of handling the budget
crisis. She urged proper inflation proofing and quoted
someone who said, "Inflation was like a thief in the
night." She also thought oil tax reform was necessary.
6:52:04 PM
ARLENE RONDA, SELF, HOMER (via teleconference), supported
HB 115. She thought it was time for a graduated income tax.
She urged the legislature to make sure to inflation proof
the Permanent Fund. She also urged restructuring oil taxes.
She appreciated the work that had been done thus far.
6:54:26 PM
AKCINIA KULIKOV, SELF, HOMER (via teleconference), opposed
HB 115. She was a mother of seven with six children still
at home. She had been greatly affected when the PFD was cut
in half. It was very expensive to live in Alaska and she
was concerned by the potential effects of an income tax.
She was concerned about how the income tax would affect the
community of commercial fishermen who were self-employed.
She urged members not to take her PFD.
6:56:54 PM
EARL LACKEY, SELF, PALMER (via teleconference), spoke in
opposition of HB 115. He felt it taxed everything he had
worked for and gave 67 percent to state government
spending. He mentioned small oil companies who had invested
in Alaska. He thought changing the oil tax structure after
the fact was unfair. He supported a state sales tax. He
urged members to oppose the legislation.
6:58:54 PM
KELLY REPNOW, SELF, PALMER (via teleconference), opposed HB
115. He referred to a Dr. Seuss story. He read from a
letter written by the Co-Chairs of the House Finance
Committee. He emphasized that if the state wanted to use
money from the Permanent Fund, then it should borrow it as
a loan. He thought the state's situation would right itself
in time, and did not need to overcorrect at present. He
also thought the bill should be separated into two bills.
He thanked the committee for hearing his testimony.
7:02:30 PM
KEWAUNEE REPNOW, SELF, PALMER (via teleconference), opposed
HB 115. She came from a family of 11. She wanted the
Permanent Fund left in the hands of the children.
7:03:08 PM
YAQUINA REPNOW, SELF, PALMER (via teleconference), opposed
HB 115. She came from a family of 11. She wanted the
Permanent Fund left in the hands of the children.
Representative Wilson thanked the young testifiers for
taking the time to give their testimonies.
7:04:11 PM
DENNIS TERPSTRA, SELF, TALKEETNA (via teleconference),
opposed HB 115. He appreciated that the state was in a
budgetary situation, but felt that some of the specialty
interests should be examined. He noted some issues with
SB21 in that tax credits needed to be more carefully
evaluated.
7:05:52 PM
BOBETTE STUBBLEFIELD, SELF, WASILLA (via teleconference),
opposed HB 115. She asked the committee to implement a
state sales tax rather than an income tax. She thought
Alaska's economy would be impacted more with an income tax.
A sales tax was also a discretionary tax. It was an easier
tax to track. She did not want to see people's take home
income affected. She thanked the committee members for
their service.
7:08:14 PM
KYLE MAY, SELF, PRUDHOE BAY (via teleconference), strongly
opposed HB 115. He did not see anything in the bill saying
it would collect taxes from out-of-state workers. He
favored a state sales tax. He thought more money towards
education was not working. He thanked the committee for
hearing his testimony.
7:10:33 PM
CHRISTINE KLEIN, SELF, ANCHORAGE (via teleconference),
strongly supported HB 115. She appreciated the work the
committee had done. She thought the state needed a state
income tax. She reported having been raised in rural
Alaska. She has paid a state income tax and a school tax as
well. She thought Alaskans should have more skin in the
game. She wanted to see the fiscal issue dealt with at
present. Using the PFD and implementing an income tax was
equitable. She applauded the committee.
7:13:44 PM
DAN BARDWELL, SELF, WASILLA (via teleconference), opposed
HB 115. He was appalled with the performance of the
legislature. He also thought more would be done if the
capital was in the Anchorage area.
7:15:12 PM
LISSA LAKE, SELF, WASILLA (via teleconference), spoke in
opposition of HB 115. She had lived in Arizona prior to
retiring in Alaska. She had seen a sales tax and a state
income tax in Arizona and did not see any benefit. She
would be more open to a sales tax or a gas tax as opposed
to an income tax. She thought there other ways to balance
the budget. She thought there was a significant amount of
waste in the state. She also thought there should be
tighter restrictions on who could receive the PFD. She
suggested an education fund that people could contribute
their children's PFD for public education. She opposed the
legislation and thanked the committee for its time.
7:19:02 PM
KEN DORMADY, SELF, SOLDOTNA (via teleconference), opposed
HB 115. He did not think the state was being run by the
right people. He mentioned that there were slush funds and
he felt like he was being lied to. He wondered why
Anchorage did not have a sales tax. He thought the PFD
should not be touched and that the legislature should avoid
implementing an income tax. He thought further cuts were
necessary. He mentioned a lot of families in his areas
going through hardship. He thought there were other ways of
making up the revenue. He was disgusted with the
legislature.
7:22:20 PM
EVELYNN TREFON, SELF, NEWHALEN (via teleconference), spoke
in support of an income tax. She thought an income tax
would capture money that would otherwise leave the state.
She wanted to see some of the income tax go towards an
education fund. She also recommended an amendment reducing
the PFD to $1,000. She calculated that $130 million could
then be put to the essential services of the state. She
thanked the committee for their efforts.
Vice-Chair Gara complimented Ms. Trefon and thanked her for
her testimony.
7:24:23 PM
JEFFREY KNAUF, SELF, ANCHORAGE (via teleconference),
opposed HB115. He thought the government was oversized and
needed to be reduced. He had heard several remarks that
Alaska was corrupt. He thought an additional 37 percent
needed to be cut from the budget. He talked about an oil
project he was involved in and having a difficult time
attracting investment from outside the state. He felt that
Alaska needed to be open for business. He asked about the
plan if the PFD was cut.
Co-Chair Foster invited the previous testifier to provide
any additional testimony in writing.
7:28:25 PM
KATHLEEN JONES, SELF, PALMER (via teleconference), spoke in
support of HB 115. She spoke of meeting her husband on the
North Slope. She recalled some advice from Governor Jay
Hammond. She also supported a state sales tax. She had a
business in Hope, Alaska, and had encountered tourists that
were willing to pay a sales tax. She suggested a seasonal
state sales tax from May through December. She also favored
capping the PFD. She supported HB 115 and encouraged
members to do so as well. She thanked the committee.
7:31:12 PM
ROSS MULLINS, SELF, CORDOVA (via teleconference), spoke in
favor of HB 115. He was a commercial fisherman and had
experienced the Exxon Valdez spill. He applauded the
committee for the legislation. He anticipated a battle with
the Senate on a state income tax. He gave kudos to the new
make-up of the House. He also supported capping the PFD. He
mentioned having listened to a presentation by Rietveld. He
thanked the committee.
7:34:10 PM
MORGAN EVENSEN, SELF, WILLOW (via teleconference), spoke in
opposition to HB 115. She thanked the committee.
7:34:40 PM
PHILLIP KNIGHT, SELF, WASILLA (via teleconference), opposed
HB 115. He had lived in Alaska for over 30 years. He was
facing retirement and opposed the legislation.
7:35:30 PM
JON FAULKNER, SELF, HOMER (via teleconference), spoke
against HB 115. He indicated he was one of the largest
private sectors employers in the area. He thought private
dollars were being invested in the public sector. He felt
that the state would be taking the people's money. He
stated that there was nothing fiscally responsible about
taking money from the Earnings Reserve Fund (ERA) to pay
for government. He did not oppose a state income tax but he
did oppose raiding the ERA and ultimately the PFD. He
ultimately opposed HB 115 and thought it was one of the
worst bills he had seen in his 55 years in Alaska.
7:38:00 PM
STEPHEN WRIGHT, SELF, WASILLA (via teleconference), spoke
in opposition of HB 115. He was looking at a presentation
which he disagreed with. He thought streamlining government
would be a much better situation. He advocated more
efficient government. He did not want to see government
propped up. He thought a significant amount of posturing
had occurred. He thought taking from the private sector was
not a good idea. He opposed the bill.
7:41:15 PM
CRAIG HOOSER, SELF, WASILLA (via teleconference), opposed
HB 115. He was a lifelong resident of Alaska. He thought
the state should manage what it had. He favored getting rid
of the PFD altogether. However, he did not think the extra
money would be spent wisely.
7:43:34 PM
DAVID KARPIK, SELF, KENAI (via teleconference), opposed HB
115. He was a small business owner. He did not support
maximizing the PFD. He thought the cost of staffing for
implementation of the tax while giving out money in the
form of the PFD would add another layer of government. He
thanked the committee.
Co-Chair Foster CLOSED Public Testimony.
Co-Chair Foster reviewed the agenda for the following day.
He noted that amendments were due in his office on Friday
at 4:00 pm.
Co-Chair Seaton clarified that amendments would be taken on
both portions of the bill: the PF and the individual income
tax.
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