Legislature(2017 - 2018)HOUSE FINANCE 519

02/17/2017 01:30 PM FINANCE

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01:36:11 PM Start
01:37:59 PM Public Testimony
06:46:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 115 INCOME TAX; PFD CREDIT; PERM FUND INCOME TELECONFERENCED
Heard & Held
-- Statewide Public Testimony --
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+ Bills Previously Heard/Scheduled 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."                                                                                                           
                                                                                                                                
^PUBLIC TESTIMONY                                                                                                             
                                                                                                                                
1:37:59 PM                                                                                                                    
                                                                                                                                
ED RASMUSON, SELF,  ANCHORAGE  (via  teleconference),  spoke                                                                    
in  support  of  HB  115. He  believed  the  state's  fiscal                                                                    
challenges needed  to be addressed  in the current  year and                                                                    
appreciated the efforts of legislators.  He thought the bill                                                                    
addressed   two   of  the   four   needed   elements  of   a                                                                    
comprehensive  fiscal  plan.  He believed  a  percentage  of                                                                    
market  value (POMV)  model, which  preserved the  Permanent                                                                    
Fund Dividend (PFD)  and used earnings to  support the state                                                                    
general   fund  (GF),   was  a   much-needed  structure   in                                                                    
combination  with a  broad-based  revenue  source. He  added                                                                    
that   the  other   remaining   necessary   elements  of   a                                                                    
comprehensive  fiscal plan  were sensible  budget reductions                                                                    
and a  revision of  the state's oil  and gas  production tax                                                                    
credit  system.  He asserted  that  all  four elements  were                                                                    
within  reach. He  opined that  Alaska's over-reliance  on a                                                                    
single source of  revenue was catching up  with the economy.                                                                    
As an  Alaskan, he  was willing  to pay  his fair  share and                                                                    
encouraged legislators to do their part.                                                                                        
                                                                                                                                
1:41:00 PM                                                                                                                    
                                                                                                                                
KATHY HANSON, SELF, BETHEL  (via  teleconference), spoke  in                                                                    
favor  of  an  equitable  approach  to  the  state's  fiscal                                                                    
crisis. She thought the state's  budget had already been cut                                                                    
to the  bone and cutting  the PFD  was not a  fair solution.                                                                    
However, she saw a state  income tax as a reasonable option.                                                                    
She was  aware that no one  liked to pay taxes  but reasoned                                                                    
that  Alaskans  could  not   continue  to  expect  essential                                                                    
services without contributing to  them. She asked members to                                                                    
support a state income tax  based on an individual's federal                                                                    
tax obligation.  She advocated spreading  the burden  to all                                                                    
parts of society.                                                                                                               
                                                                                                                                
1:42:54 PM                                                                                                                    
                                                                                                                                
BOB  BARTHOLOMEW,  FINANCE  DIRECTOR, CITY  AND  BOROUGH  OF                                                                    
JUNEAU  (CBJ),  JUNEAU,  spoke  in support  of  HB  115.  He                                                                    
reported  that CBJ  had signed  a  resolution supporting  an                                                                    
increase  in  state  revenues and  a  restructuring  of  the                                                                    
Permanent  Fund (PF).  He looked  at  HB 115  from a  policy                                                                    
perspective  posing   the  question  whether  there   was  a                                                                    
specific  need or  a public  justification for  revenues the                                                                    
state was  trying to  raise. He  noted obligations  that had                                                                    
been presented  by Commissioner  Hoffbeck of  the Department                                                                    
of  Revenue (DOR)  including school  debt reimbursement  and                                                                    
pension  obligations. Legally,  both commitments  had to  be                                                                    
met.  He asserted  that  the  state had  a  reason to  raise                                                                    
revenues. In  terms of the  best way  to do so,  he assessed                                                                    
who should pay.  He remarked that commitments  had been made                                                                    
many  years prior  regarding school  debt reimbursement  and                                                                    
pensions. Local  governments had  met their  obligations for                                                                    
over a  decade and  he asked  the state to  do the  same. He                                                                    
highlighted  that  good  tax  policy  included  elements  of                                                                    
fairness,  justification, and  diversification. He  reasoned                                                                    
that HB 115 allowed for  citizen buy-in. An income tax would                                                                    
capture the  participation from non-residents  who benefited                                                                    
from state services. He also  noted that 105 communities had                                                                    
a  sales tax,  which  affected  residents and  non-residents                                                                    
alike. He  reiterated CBJ's  support of  HB 115  and thanked                                                                    
the legislature for its efforts.                                                                                                
                                                                                                                                
1:46:25 PM                                                                                                                    
                                                                                                                                
PAULINE HESSING, SELF,   ANCHORAGE   (via   teleconference),                                                                    
urged members  to support HB  115. She  spoke in favor  of a                                                                    
personal income  tax and  of capping the  PFD at  $1000. She                                                                    
appreciated  the information  provided by  the Institute  of                                                                    
Social  and Economic  Research (ISER).  She  thought it  was                                                                    
necessary to modify the oil tax  system making it based on a                                                                    
range of oil prices. She  hoped that Alaskans would share in                                                                    
the  spirit  of  generosity and  willingness  to  cooperate,                                                                    
similar  to what  she found  in the  hearts of  its citizens                                                                    
when she moved to Alaska in 1976.                                                                                               
                                                                                                                                
1:48:25 PM                                                                                                                    
                                                                                                                                
JULIA  PERSON, SELF,  HOMER (via  teleconference), supported                                                                    
HB 115  and the reinstitution  of a  state income tax.  As a                                                                    
lifelong Alaskan,  she had seen  many seasonal  workers make                                                                    
significant  money, utilize  state services,  and leave  the                                                                    
state  without supporting  it. The  Homer sales  tax was  an                                                                    
exception.  She  elaborated  that   an  income  tax  was  an                                                                    
equitable way of supporting the state.                                                                                          
                                                                                                                                
1:49:33 PM                                                                                                                    
                                                                                                                                
RICHARD MCGAHAN, SELF,   KENAI  (via teleconference),  spoke                                                                    
in  favor  of  cutting  Alaska's  budget.  He  compared  the                                                                    
state's spending  20 years prior  to the present.  He opined                                                                    
that  it had  increased  tenfold. He  supposed that  without                                                                    
additional budget  cuts the  state would  be much  deeper in                                                                    
debt  in 20  years.  He was  a homesteader  of  62 years  in                                                                    
Alaska and did  not favor large government.  He offered that                                                                    
without the legislature  doing things differently government                                                                    
would continue to grow.                                                                                                         
                                                                                                                                
1:51:04 PM                                                                                                                    
                                                                                                                                
DAVID LANDRY, SELF,      ANCHORAGE   (via   teleconference),                                                                    
spoke in favor  of HB 115. He opined that  instability had a                                                                    
negative  effect  on the  economy.  He  preferred paying  an                                                                    
income tax than losing his  business. He supported an income                                                                    
tax over a  sales tax, as he thought a  sales tax would more                                                                    
negatively impact rural Alaska.                                                                                                 
                                                                                                                                
1:53:11 PM                                                                                                                    
                                                                                                                                
PAT HOLMES, SELF, KODIAK  (via teleconference), supported HB                                                                    
115.  He  remarked  that things  had  significantly  changed                                                                    
since statehood prior to oil.  He recommended having a brief                                                                    
summary of  the 4 items  in the  bill and their  meaning. He                                                                    
asked  about the  appropriation  of certain  amounts of  the                                                                    
earnings  reserve  account  (ERA). There  was  a  discussion                                                                    
about  reducing  the  percentage  from 21  percent  to  4.75                                                                    
percent. He  wanted members to  explain the  related section                                                                    
for him to understand it  better. He supported an income tax                                                                    
and  reflected on  when he  was  a young  man making  enough                                                                    
money to  pay one. He  thought it was  the only fair  way to                                                                    
collect revenues.  He opposed altering the  PFD and believed                                                                    
it would  negatively impact low-income  folks. He  asked for                                                                    
more information regarding  a change to the oil  and gas tax                                                                    
structure. He expressed concerns  that rural Alaska would be                                                                    
inequitably affected  by a  reduction to  the amount  of the                                                                    
PFD.                                                                                                                            
                                                                                                                                
Co-Chair Foster  indicated that Co-Chair Seaton  would reach                                                                    
out to him to answer his questions.                                                                                             
                                                                                                                                
1:55:58 PM                                                                                                                    
                                                                                                                                
NANCY BIRD,    SELF,     CORDOVA    (via    teleconference),                                                                    
strongly  supported  HB  115. She  called  attention  to  an                                                                    
opinion  piece  in the  Anchorage  Dispatch  News by  Dermot                                                                    
Cole. She agreed that Alaska's  legislators had never needed                                                                    
to master  the art  of compromise  more than  presently. She                                                                    
felt  that everyone  needed to  contribute. She  thanked the                                                                    
committee  and urged  members to  continue their  efforts in                                                                    
getting the legislation passed.                                                                                                 
                                                                                                                                
1:57:15 PM                                                                                                                    
                                                                                                                                
EILEEN BECHTOL,     SELF,     HOMER (via teleconference),                                                                       
spoke in  support of HB  115 and  a POMV model.  She thanked                                                                    
Co-Chair  Seaton  and Co-Chair  Foster  for  the courage  to                                                                    
introduce  the legislation.  She  opined that  a POMV  model                                                                    
provided a more stable revenue  source for the state budget.                                                                    
She thought  a state  income tax was  more equitable  than a                                                                    
state sales  tax. She  thought it  was important  to capture                                                                    
taxes from those that worked  in Alaska and lived elsewhere.                                                                    
She spoke  about the hard  work of state employees.  She was                                                                    
aware  that  the health  and  safety  of  Alaska had  to  be                                                                    
funded.  She  listed  a  number   of  agency  divisions  and                                                                    
programs that she felt needed to be funded.                                                                                     
                                                                                                                                
1:59:02 PM                                                                                                                    
                                                                                                                                
RYKER DIAL,  SELF, FAIRBANKS (via teleconference),  spoke in                                                                    
opposition to HB 115. He thought  the bill would result in a                                                                    
large exodus of people from  the state. The change resulting                                                                    
from the legislation would affect  him to the extent that he                                                                    
would be unlikely  to settle in Alaska. He  urged members to                                                                    
turn to the two  largest expenditures within the government:                                                                    
Health  and Social  Services and  Education. He  noted there                                                                    
were 133  communities across the  state in which  the 5-year                                                                    
federal  welfare  limit  did  not  apply.  Alaska  had  more                                                                    
residents on welfare per captia  than any other state in the                                                                    
U.S. He  thought it  was a great  disservice to  burden hard                                                                    
working  Alaskans.  He  asserted   that  the  dependence  on                                                                    
government prevented Alaskans from  growing. He believed the                                                                    
school  system  needed  restructuring to  make  things  more                                                                    
equitable for  hard working,  productive Alaskans.  He urged                                                                    
legislators to fight for Alaska's future.                                                                                       
                                                                                                                                
2:00:50 PM                                                                                                                    
                                                                                                                                
GARVAN BUCARIA,     SELF,     WASILLA (via teleconference),                                                                     
spoke in opposition  to HB 115. He opined  that further cuts                                                                    
were needed  prior to making  changes to the PF.  He thought                                                                    
it risked  the health of the  PF. He opposed a  state income                                                                    
tax and  the increased  spending to  administer the  tax. He                                                                    
recommended  cutting  funding  to the  governor's  gas  line                                                                    
project.                                                                                                                        
                                                                                                                                
2:02:39 PM                                                                                                                    
                                                                                                                                
MARTIN STEEPETIN,   SELF,  JUNEAU, spoke  in  support of  HB                                                                    
115. He relayed  that he had worked all over  the state in a                                                                    
number of professions and with  several different people. He                                                                    
supported  the tough  decision of  digging into  the PF  but                                                                    
wanted  to  protect   it  for  the  future.   He  hoped  the                                                                    
legislature  would take  action in  the current  session. He                                                                    
suggested that people were reluctant  to spend money until a                                                                    
decision was made.                                                                                                              
                                                                                                                                
2:06:06 PM                                                                                                                    
                                                                                                                                
RODNEY DIAL,   SELF,     KETCHIKAN   (via   teleconference),                                                                    
spoke in  opposition of  HB 115. He  opined that  by passing                                                                    
the legislation the  PFD would turn into  a welfare program.                                                                    
He clarified  that the  budget deficit was  not a  result of                                                                    
the urban  areas paying  enough, as  they already  paid $1.5                                                                    
billion  per  year in  taxes.  He  suggested that  the  cost                                                                    
stemmed  from the  rural areas  paying nothing  for services                                                                    
while being  dependent on the  state. He thought  Alaska had                                                                    
become a  magnet for  welfare recipients.  He felt  that the                                                                    
$25  minimum  fee in  HB  115  represented an  insignificant                                                                    
contribution from the people who  were the greatest users of                                                                    
state  resources.  He asserted  that  it  was not  a  shared                                                                    
sacrifice  for 100,000  Alaskan households  to get  $25 less                                                                    
free  money while  working Alaskans  paid the  brunt of  the                                                                    
tax.  In  an  effort  to   isolate  rural  Alaska  from  the                                                                    
realities of  modern life, including taxes,  the state would                                                                    
create  an environment  in  which those  that  would pay  an                                                                    
income  tax  could afford  to  move  and likely  would.  The                                                                    
greatest  users of  state  resources would  not  be able  to                                                                    
afford  to  move   and  would  stay.  He   opined  that  the                                                                    
legislation was  discriminatory in  nature. He  relayed that                                                                    
the  proposal would  not  tax  one of  the  main sources  of                                                                    
income   in   some   rural   communities:   dividends   from                                                                    
corporations that were not taxed  at the federal level. They                                                                    
would not be  subject to a state income tax.  He referred to                                                                    
a federal statute having to  do with income exclusions based                                                                    
on   race.   He   purported  that   it   would   result   in                                                                    
discriminatory  taxation  and   would  divide  Alaskans.  He                                                                    
wanted the legislature  to ensure that the  tax burden would                                                                    
be  shared by  all Alaskans.  He agreed  with Representative                                                                    
Ortiz's idea  concerning credit for areas  that already paid                                                                    
local  taxes such  as the  required  local contribution.  He                                                                    
could support the PFD draw  but not the discriminatory parts                                                                    
of  the  income tax.  He  urged  members  not to  allow  the                                                                    
advancement of the legislation from committee.                                                                                  
                                                                                                                                
2:09:03 PM                                                                                                                    
                                                                                                                                
SHANNON CONNELLY,   SELF,     PALMER (via teleconference),                                                                      
opposed HB 115.  She opined that a monster  had been created                                                                    
in  the  form of  government.  She  thought the  legislation                                                                    
would  steal from  the PF  as well  as from  the pockets  of                                                                    
Alaskans.  She  pointed out  that  the  legislature had  not                                                                    
created a sustainable budget and  that the legislation would                                                                    
contribute  to  additional   expenses  with  tax  collection                                                                    
activities.  She continued  that legislators  had not  shown                                                                    
financial   responsibility  for   growing  government.   She                                                                    
reasoned  that  the  legislature needed  to  make  necessary                                                                    
budget reductions  to reverse  government growth.  She urged                                                                    
members to  do what was  best for  the state by  opposing HB                                                                    
115.                                                                                                                            
                                                                                                                                
2:10:30 PM                                                                                                                    
                                                                                                                                
BARBARA HANEY, SELF,     FAIRBANKS   (via   teleconference),                                                                    
spoke in opposition to HB 115.  She argued that no one would                                                                    
want to come to Alaska  once the legislation passed. She did                                                                    
not believe  a $25 head  tax would solve  Alaska's problems,                                                                    
especially since  the state  already took  a portion  of the                                                                    
people's PFD  without solving it.  In addition, she  did not                                                                    
think  the  Marijuana tax  would  solve  the state's  fiscal                                                                    
crisis. She opined  that there would be a  large increase in                                                                    
absentee ownership  and relayed  a personal  experience. She                                                                    
firmly opposed HB 115.                                                                                                          
                                                                                                                                
Representative Wilson  informed the testifier that  a person                                                                    
that did  not generate  any income would  not be  subject to                                                                    
the $25 head tax. Ms. Haney disagreed.                                                                                          
                                                                                                                                
2:13:28 PM                                                                                                                    
                                                                                                                                
PATRICK DALTON,  SELF, DELTA JUNCTION  (via teleconference),                                                                    
spoke against  HB 115. He  supposed it was  regrettable when                                                                    
the state lost  employees but even more  regrettable when it                                                                    
lost   employers.  He   mentioned   that   Dave  Ramsey,   a                                                                    
millionaire in  Alaska, confirmed  he would leave  the state                                                                    
if  income  taxes were  imposed  because  of the  multiplier                                                                    
affect an  income tax would  have. He opined that  an income                                                                    
tax  would  be  counter-productive.  Alaska  spent  more  on                                                                    
government  per capita  than any  other state.  He explained                                                                    
that  the state  spent  too much  on  government and  needed                                                                    
further  reductions to  its budget.  He mentioned  practices                                                                    
from  the  Regan  era. He  thought  smaller  government  was                                                                    
better and opposed an income tax.                                                                                               
                                                                                                                                
2:16:06 PM                                                                                                                    
                                                                                                                                
DAVE OTNESS,  SELF, CORDOVA  (via teleconference),  spoke in                                                                    
favor  of an  income tax.  He  thought the  elephant in  the                                                                    
living  room  was  oil  tax credits.  He  believed  oil  tax                                                                    
credits needed  to be  revisited prior  to dipping  into the                                                                    
PFD. He spoke  in favor of the new bi-partisan  group in the                                                                    
House. He  reiterated that he  did not  want to see  the PFD                                                                    
disturbed.                                                                                                                      
                                                                                                                                
2:18:27 PM                                                                                                                    
                                                                                                                                
MIKE MILLIGAN, SELF,     KODIAK (via teleconference), spoke                                                                     
in  support   of  HB  115   thanking  Co-Chair   Seaton  for                                                                    
introducing  the legislation.  He agreed  with the  previous                                                                    
speaker about the effects of SB  21. He spoke in favor of an                                                                    
income  tax and  thought  it  should be  attached  to a  PFD                                                                    
application.  He also  thought it  would be  a good  idea to                                                                    
attach  property  taxes  to  the  PFD  application.  He  was                                                                    
troubled by  the amount of  people receiving PFD's  from out                                                                    
of  state. He  also supported  capturing taxes  from out  of                                                                    
state workers.                                                                                                                  
                                                                                                                                
2:20:54 PM                                                                                                                    
                                                                                                                                
DAVE BRIGHTON, KENAI PENINSULA  EDUCATION ASSOCIATION, KENAI                                                                    
(via teleconference), favored HB  115 commenting that it was                                                                    
a balanced  solution. He  spoke of  the negative  impacts on                                                                    
his son's  education caused by school  district budget cuts.                                                                    
Several programs  were being cut.  He noted that  43 percent                                                                    
of  the budget  had  been  cut over  the  last  4 years.  He                                                                    
supported an  income tax and  the use of the  Permanent Fund                                                                    
Earnings  Reserves to  cover government  services. He  urged                                                                    
members  to  support  the  bill and  to  solve  the  state's                                                                    
financial crisis in the current year.                                                                                           
                                                                                                                                
2:22:52 PM                                                                                                                    
                                                                                                                                
LYNDA RAYMOND, SELF,     HOMER (via teleconference), was a                                                                      
49  year resident  of  Alaska. She  reported  that when  she                                                                    
first moved  to the state  it had a much  smaller population                                                                    
but was fiscally responsible.  She reported that legislators                                                                    
had  worked hard  to ensure  the  state's functionality  and                                                                    
sustainability. She  thought that presently  legislators had                                                                    
ignored   their   responsibility    for   restoring   fiscal                                                                    
sustainability  of the  state budget.  She wanted  to see  a                                                                    
solution adopted  in the  current session  but did  not want                                                                    
education further  reduced. She  opposed tax credits  to oil                                                                    
companies, and supported  a state income tax.  She opposed a                                                                    
state  sales tax  or reducing  Alaskans' PFD,  as they  were                                                                    
regressive options. If  it was necessary to  reduce the PFD,                                                                    
she  encouraged   a  state  income  tax   to  accompany  the                                                                    
reduction.  She urged  members  to fix  the  problem and  to                                                                    
support HB 115.                                                                                                                 
                                                                                                                                
2:25:23 PM                                                                                                                    
                                                                                                                                
CHARLES MCKEE, SELF,     ANCHORAGE   (via   teleconference),                                                                    
accused the  legislature of gross  negligence. He  quoted an                                                                    
Alaska statute.  He spoke to  items outside of the  bill. He                                                                    
did not believe he was being heard by legislators.                                                                              
                                                                                                                                
2:29:17 PM                                                                                                                    
                                                                                                                                
PAT RACE, SELF,  JUNEAU,  spoke  in  favor  of  HB  115.  He                                                                    
thought  Alaskans should  be responsible  and contribute  to                                                                    
state  government  through  an  income tax.  He  thought  an                                                                    
income tax increased  budgetary diversity; it was  a mark of                                                                    
ownership and a declaration  of independence against outside                                                                    
influence. He  spoke of the  history of the  original income                                                                    
tax  in  Alaska  and  the foundational  role  it  played  to                                                                    
statehood. He  mentioned having spoken to  George Rodgers, a                                                                    
respected  economist  that  regretted  the  legislature  not                                                                    
zeroing out the  income tax but leaving it on  the books. He                                                                    
encouraged  members to  take the  difficult step  of putting                                                                    
the income tax back in place.                                                                                                   
                                                                                                                                
2:31:12 PM                                                                                                                    
                                                                                                                                
DEBORAH  DALE, SELF,  KETCHIKAN (via  teleconference), spoke                                                                    
in  opposition to  the bill,  especially to  the income  tax                                                                    
portion. She  spoke about  her family  history and  her work                                                                    
experience. She  reported that she  and her husband  owned a                                                                    
business of which she was  the bookkeeper. She reported that                                                                    
the business could not afford  insurance and would be unable                                                                    
to  afford  costs  if  an income  tax  was  reinstated.  She                                                                    
underscored   the  current   health  insurance   crisis  and                                                                    
discussed  high insurance  premiums. She  reported that  she                                                                    
would be  looking at closing  her business if an  income tax                                                                    
passed.                                                                                                                         
                                                                                                                                
2:34:30 PM                                                                                                                    
                                                                                                                                
MIKE  COONS, SELF,  PALMER  (via teleconference),  testified                                                                    
against the  legislation. He  referred to  specific portions                                                                    
of the bill.  He shared his experience working  on the North                                                                    
Slope  and spoke  to  an  income tax  in  Louisiana. He  was                                                                    
opposed  to taxing  Alaskans and  people from  out of  state                                                                    
working  on  the North  Slope.  He  did not  support  taxing                                                                    
working Alaskans  if lower income  residents were  not going                                                                    
to pay a tax. He thought it was  a myth and lie that a state                                                                    
income  tax   would  generate  enough  income   to  pay  for                                                                    
government.                                                                                                                     
                                                                                                                                
2:36:51 PM                                                                                                                    
                                                                                                                                
SUE  SHERIF, SELF,  FAIRBANKS (via  teleconference), thanked                                                                    
the co-chairs and the House  for their bipartisan efforts in                                                                    
the  current  year.  She   supported  the  legislation.  She                                                                    
supported a  temporary cap on PFDs,  the use of some  of the                                                                    
fund's  earnings, and  an  income tax.  She  thought it  was                                                                    
reasonable to ask residents to  pay a modest income tax. She                                                                    
believed it would  be hard to find a state  with a lower tax                                                                    
burden. She believed  it was necessary for  Alaskans to step                                                                    
up to the plate.                                                                                                                
                                                                                                                                
2:39:18 PM                                                                                                                    
                                                                                                                                
CARRIE  HARRIS,  SELF,  PALMER (via  teleconference),  spoke                                                                    
against HB 115. She believed  that meaningful oil and mining                                                                    
tax  reform was  needed. She  stressed the  state was  not a                                                                    
business partner with  the oil and mining  companies but the                                                                    
owners  of   rich  resources.  As  the   owner  of  Alaska's                                                                    
resources, she  felt it  was time  the state  collected more                                                                    
for them. She  opined that the legislature  needed to reduce                                                                    
its  budget as  well as  to sell  the Anchorage  Legislative                                                                    
Information  Office building.  She highlighted  the need  to                                                                    
generate  new sources  of  revenue  including cannabis.  She                                                                    
furthered  that  that  all  of  her  suggestions  should  be                                                                    
implemented prior to imposing  an income tax. She encouraged                                                                    
members  to  act  or  they  would  be  removed  through  the                                                                    
election process.                                                                                                               
                                                                                                                                
2:41:20 PM                                                                                                                    
                                                                                                                                
PAMELA SAMASH, SELF,     NENANA (via teleconference), spoke                                                                     
in  opposition of  HB 115.  She did  not believe  the people                                                                    
should have to carry the  weight of government. She spoke to                                                                    
the  difficulty in  living in  the  state including  extreme                                                                    
temperatures  and  the high  cost  of  heating and  electric                                                                    
bills.  She  felt the  government  was  working against  the                                                                    
people.  She opined  that  if people  could  not survive  in                                                                    
Alaska  the  state would  be  unable  to obtain  taxes.  She                                                                    
recommended  the   state  help  its  residents   instead  of                                                                    
suppressing  and  draining them.  She  did  not believe  the                                                                    
legislature  had done  its job.  She  purported that  losing                                                                    
half of  the people's  dividend was  a sacrifice.  She urged                                                                    
members to vote against HB 115.                                                                                                 
                                                                                                                                
2:43:39 PM                                                                                                                    
                                                                                                                                
ROBERT SMITH,  SELF, CORDOVA (via teleconference),  spoke in                                                                    
favor of an  income tax. He did not like  seeing people come                                                                    
to Alaska,  make their living,  and take their money  out of                                                                    
state. He  thought it  was unconscionable  for the  state to                                                                    
take PFD money  from Alaskans while it continued  to pay oil                                                                    
companies  to take  oil  out of  Alaska.  He furthered  that                                                                    
taking PFD monies  hurt the poorest Alaskans.  An income tax                                                                    
made  non-Alaskans  contribute  their   share.  He  noted  a                                                                    
lockdown  the Department  of Fish  and Game  had imposed  on                                                                    
certain   fisheries.  He   opined  that   by  allowing   the                                                                    
Department of Fish and Game  to close fisheries for decades,                                                                    
year-round residents  were more  dependent on their  PFD. He                                                                    
believed there  was more room  for reductions to  the budget                                                                    
and  a  more  rational  use  of the  state's  money  by  the                                                                    
government.                                                                                                                     
                                                                                                                                
2:45:30 PM                                                                                                                    
                                                                                                                                
DOUGLAS PENGILLY,   SELF,     KODIAK (via teleconference),                                                                      
favored  HB  115.  He  thought  the  bill  provided  a  good                                                                    
approach. He asserted  that the sources of  income for state                                                                    
government needed  to be diversified  and reasoned  that the                                                                    
state  could  not  continue  to rely  on  oil  revenues.  He                                                                    
commented  that  the legislation  was  an  equitable way  to                                                                    
spread the  costs to Alaskan  residents. He  recognized that                                                                    
each  resident needed  to  have  skin in  the  game. He  was                                                                    
certain that if  the state tried to cut  its budget further,                                                                    
there would be an exodus of people out of Alaska.                                                                               
                                                                                                                                
Co-Chair   Foster   recognized   Senator   Shelley   Hughes,                                                                    
Representative  Louise  Stutes, and  Representative  Colleen                                                                    
Sullivan-Leonard in the audience.                                                                                               
                                                                                                                                
2:47:48 PM                                                                                                                    
                                                                                                                                
FRED STURMAN, SELF,      SOLDOTNA    (via   teleconference),                                                                    
believed the legislature caused  the state's fiscal problems                                                                    
by  increasing salaries,  buying  additional buildings,  and                                                                    
spending too much  money. He relayed a story  about a friend                                                                    
who  had  recently  had  his work  hours  reduced.  He  also                                                                    
mentioned a  contractor friend who  had to reduce  his staff                                                                    
for  the year.  He  thought the  legislature  should take  a                                                                    
closer  look at  the  effects of  taxing  people and  taking                                                                    
money out of the economy.                                                                                                       
                                                                                                                                
2:50:03 PM                                                                                                                    
                                                                                                                                
RONALD KEFFER, SELF,     HOMER (via teleconference), spoke                                                                      
in favor  of HB 115. He  purported that if nothing  was done                                                                    
to  provide   a  stable  and  balanced   state  budget,  the                                                                    
resulting uncertainty  would cause  the recession  in Alaska                                                                    
to worsen. He  did not believe oil revenues  would return to                                                                    
previous  high  levels  that  afforded  the  state  a  large                                                                    
budget. It  was important to  adopt a method of  balancing a                                                                    
budget that was fair and  sustainable. He thought the burden                                                                    
of taxation  should be apportioned fairly.  He reported that                                                                    
the PF  was established  with the  expectation of  using the                                                                    
earnings to  support state government. He  believed reducing                                                                    
the PFD was a regressive  step. The bill moderated that step                                                                    
by retaining the dividend at  a reasonable level. He thought                                                                    
the income tax was fair  and captured both resident and non-                                                                    
resident  income. He  spoke to  the level  of administration                                                                    
needed  to implement  a tax.  He  argued that  a simple  tax                                                                    
would require  less administration. He urged  legislators to                                                                    
support the legislation.                                                                                                        
                                                                                                                                
2:52:23 PM                                                                                                                    
                                                                                                                                
MICHAEL  MCCARTHY, SELF,  HOMER (via  teleconference), spoke                                                                    
in favor of  HB 115. He appreciated the  fiscal certainty it                                                                    
offered. He mentioned that the  Dow Jones industrial average                                                                    
was  $20,623.  He supposed  it  was  at an  artificial  high                                                                    
similar  to the  2008 recession.  He indicated  he was  also                                                                    
concerned with  the potential repeal of  the Dodd-Frank Act.                                                                    
He thought  Alaska needed  a stable  fiscal plan  to survive                                                                    
outside impacts. He  had asked several people  if they would                                                                    
support  a state  income  tax. All  but  one person  replied                                                                    
affirmatively. He  also reported that all  persons he talked                                                                    
with agreed  that out-of-state workers  should pay a  tax on                                                                    
their Alaska  income. He did  not believe cutting  the state                                                                    
budget further  was the  right step for  the state  and that                                                                    
additional  cuts  would  have  unintended  consequences.  He                                                                    
urged members to support the bill.                                                                                              
                                                                                                                                
2:54:36 PM                                                                                                                    
                                                                                                                                
DAVE HANSON,   SELF,     ANCHORAGE   (via   teleconference),                                                                    
strongly supported HB  115. He made 3  points. First, Alaska                                                                    
had an  income tax  for 31  years similar to  the one  in HB                                                                    
115. Secondly,  in the  US, Alaska was  the only  state that                                                                    
did  not  have an  income  tax  or  a statewide  sales  tax.                                                                    
Thirdly, 17 percent  of a state income tax would  be paid by                                                                    
non-residents  and the  federal  government. Alaskans  would                                                                    
pay  83 percent  of the  tax  bill. Without  an income  tax,                                                                    
Alaskans  were paying  100 percent  of  the state's  revenue                                                                    
needs from  savings accounts, earning reserves,  and reduced                                                                    
PFDs. He reasoned  that the best spending cap  was an income                                                                    
tax  because when  people  funded  government directly  from                                                                    
their pockets  they paid attention  to how  government spent                                                                    
its  money. He  mentioned one  of ISER's  studies, which  he                                                                    
thought provided good information.                                                                                              
                                                                                                                                
2:58:09 PM                                                                                                                    
                                                                                                                                
SAM CASON,  SELF, ANCHORAGE (via  teleconference), supported                                                                    
HB  115. He  spoke in  favor of  a sustainable  solution. He                                                                    
thanked  Co-Chair  Seaton  for providing  a  structure  that                                                                    
addressed both  an immediate solution  and a  more permanent                                                                    
one. He reiterated his support for HB 115.                                                                                      
                                                                                                                                
2:59:42 PM                                                                                                                    
                                                                                                                                
LUANN  MCVEY,  SELF, JUNEAU,  supported  HB  115. She  spoke                                                                    
about the  reductions that had  been made to  education. She                                                                    
emphasized the efforts of teachers  to tailor instruction to                                                                    
each  child. She  provided additional  information regarding                                                                    
her experience  as a  past teacher  and the  requirements to                                                                    
provide quality  education. She  stressed the  importance of                                                                    
properly funding  education. She thought a  state income tax                                                                    
would help to  provide that funding. She  also favored doing                                                                    
without a PFD.                                                                                                                  
                                                                                                                                
3:02:10 PM                                                                                                                    
                                                                                                                                
ABBE HENSLY,   ALASKA   EARLY   CHILDHOOD  ADVOCACY   GROUP,                                                                    
JUNEAU, spoke in  favor of HB 115.  She provided information                                                                    
regarding  the  advocacy  group.  The  group  supported  the                                                                    
legislature  in  developing  a long-term  fiscal  plan  that                                                                    
minimized  costly unintended  consequences, invested  in the                                                                    
state's  human infrastructure,  and  generated revenue.  The                                                                    
group  supported  the  legislature making  budget  decisions                                                                    
that maintained or increased services  and support for young                                                                    
children and  their families  and encouraged  maximizing all                                                                    
available  funding opportunities.  She  emphasized the  need                                                                    
for a  long-term fiscal  plan to  be put  into place  in the                                                                    
current  legislative session.  She would  provide a  copy of                                                                    
the group's resolution supporting HB 115.                                                                                       
                                                                                                                                
3:04:42 PM                                                                                                                    
                                                                                                                                
STEVE ST. CLAIR,    SELF,     WASILLA (via teleconference),                                                                     
spoke in opposition to HB 115.  He wondered why the bill was                                                                    
being  considered. He  mentioned that  changing or  reducing                                                                    
the  PFD  was the  most  regressive  option. He  opposed  an                                                                    
income  tax as  well.  He urged  members  to stop  punishing                                                                    
those  who want  to  work. He  thought  a redistribution  of                                                                    
wealth  was a  bad plan.  He mentioned  a plan  he had  been                                                                    
involved  with  writing.  He   reminded  members  that  they                                                                    
represented  the people.  He  urged members  to  vote no  on                                                                    
HB 115.                                                                                                                         
                                                                                                                                
3:07:50 PM                                                                                                                    
                                                                                                                                
KATE  GRABER,  SELF,  PALMER (via  teleconference),  favored                                                                    
HB 115. She argued that something  needed to be done to save                                                                    
the state. She  did not advocate for additional  cuts to the                                                                    
budget,  but rather  wanted to  see services  maintained and                                                                    
state  workers  employed. She  felt  that  Alaska needed  to                                                                    
maintain  its  quality  of  life no  matter  the  cost.  She                                                                    
believed the legislation represented  a good start and hoped                                                                    
the committee would pass it.                                                                                                    
                                                                                                                                
3:10:53 PM                                                                                                                    
                                                                                                                                
MICHAEL SALLEE,     SELF, KETCHIKAN (via teleconference),                                                                       
suggested  that  prior  to implementing  any  sales  tax  or                                                                    
change  to  the  PFD  he recommended  2  things.  First,  he                                                                    
recommended charging  fossil fuel  companies royalties  at a                                                                    
rate equivalent  to what  they paid  in other  oil producing                                                                    
states.   Secondly,  fossil   fuel   companies  and   timber                                                                    
extractors should  be charged a carbon  tax calculated based                                                                    
on  the  currently  externalized  environmental  and  health                                                                    
costs. He was not opposed to an  income tax or the use of PF                                                                    
earnings  as  long  as  the   fund  remained  protected  via                                                                    
inflation  proofing and  a spending  limit.  He was  neutral                                                                    
regarding HB 115.                                                                                                               
                                                                                                                                
3:13:25 PM                                                                                                                    
                                                                                                                                
DONNA LEE,     SELF,     CHICKALOON (via teleconference),                                                                       
supported  HB  115.  She  had  2  children  in  Alaska  with                                                                    
families. She wanted to see  services maintained. She saw HB                                                                    
115 as a way of relieving  the state of its fiscal woes. She                                                                    
did not want  to see the state's  monetary resources dwindle                                                                    
before  finding a  solution to  its problems.  She viewed  a                                                                    
state income tax  as more equitable than a  state sales tax.                                                                    
She wanted to  see the PFD remain intact.  She supposed that                                                                    
a  4.75  percent  draw  from  the  PF  was  reasonable.  She                                                                    
reviewed some  of the details  of HB 115 and  reiterated her                                                                    
support for  the legislation. She  urged the  legislature to                                                                    
make good decisions  for the future of the  people of Alaska                                                                    
and to compromise.                                                                                                              
                                                                                                                                
3:15:55 PM                                                                                                                    
                                                                                                                                
TREVOR STORRS, ALASKA  CHILDREN'S   TRUST  (ACT),  ANCHORAGE                                                                    
(via  teleconference),  spoke  in  favor of  HB  115  and  a                                                                    
sustainable  fiscal solution.  He advocated  for a  combined                                                                    
approach,  which  included   further  efficiencies  and  new                                                                    
revenue  sources.  The  long-term   fiscal  plan  needed  to                                                                    
include investment  in the  state's most  valuable resource:                                                                    
its children.  He relayed  that in  the following  week ISER                                                                    
would  be  releasing  a  report  commissioned  by  ACT  that                                                                    
analyzed  the effects  of  alternative  revenue measures  on                                                                    
families with children. He reported  that when families were                                                                    
negatively    impacted    economically   the    amount    of                                                                    
interpersonal  violence increased.  The goal  of the  report                                                                    
was to provide  lawmakers with information to  allow them to                                                                    
make the best  decision that will help ACT  to prevent child                                                                    
abuse and neglect. He confirmed  that the report showed that                                                                    
cuts to  the PFD  would have  the greatest  negative impacts                                                                    
for families  with children than  any other tax  measure. He                                                                    
provided additional details of  the report. He urged members                                                                    
to invest  in prevention, which would  reduce costs, improve                                                                    
the health of Alaskans, and grow the economy.                                                                                   
                                                                                                                                
3:18:30 PM                                                                                                                    
                                                                                                                                
TERESA WALLEN, SELF,     WASILLA    (via    teleconference),                                                                    
opposed  HB  115. She  noted  the  high  cost of  living  in                                                                    
Alaska. She also noted the  benefits of living in the state,                                                                    
particularly in Anchorage, because  of the available medical                                                                    
care. She  presumed HB 115 would  negatively impact Alaska's                                                                    
healthcare  industry.  She  spoke to  the  multiple  nursing                                                                    
positions open  in the state  and conveyed that she  knew of                                                                    
several  nurses considering  leaving the  state. She  opined                                                                    
that  it was  never a  good  idea to  tax productivity.  She                                                                    
relayed  a  number  of  questions  for  the  legislature  to                                                                    
consider. She reemphasized that a  state income tax would be                                                                    
detrimental to the healthcare industry in Alaska.                                                                               
                                                                                                                                
3:24:05 PM                                                                                                                    
                                                                                                                                
JERRY MCCUNE,  UNITED    FISHERMEN   OF    ALASKA,   JUNEAU,                                                                    
indicated the organization was neutral  regarding HB 115. He                                                                    
brought up  a question  about specific  section of  the bill                                                                    
regarding  statute  AS 43.22.050  on  page  8, line  6.  The                                                                    
section  addressed  captains   being  required  to  withhold                                                                    
monies from  their crew. He  reviewed the  standard practice                                                                    
of how  captains paid  their crew.  He had  several detailed                                                                    
questions that  he felt  needed to  be addressed  within the                                                                    
context of  the bill. United  Fishermen of Alaska  wanted to                                                                    
be a part of the  solution but needed its questions answered                                                                    
first.                                                                                                                          
                                                                                                                                
3:27:00 PM                                                                                                                    
                                                                                                                                
DAN DESLOOVER, SELF,  JUNEAU,  testified  in support  of  HB                                                                    
115. He  thought having diverse and  sustainable funding for                                                                    
public  institutions  was  critical.   He  shared  having  a                                                                    
2-year-old daughter  and his  concerns about  the challenges                                                                    
she  would face  growing  up. He  did not  want  to have  to                                                                    
explain to  her in 20 years  that Alaska had the  ability to                                                                    
strengthen  the public  education  system,  provide for  the                                                                    
health   and   safety   of   Alaska,   support   sustainable                                                                    
industries, and protect the environment  but failed to do so                                                                    
because  legislators  did  not   want  to  compromise  on  a                                                                    
sustainable  budget.   Alaskans  faced   substantial  issues                                                                    
including climate  change, the support for  public education                                                                    
and  healthcare was  up in  the  air at  the federal  level.                                                                    
Alaskans  needed to  be able  to  count on  one another.  He                                                                    
spoke  about  evidence  showing that  having  strong,  well-                                                                    
funded public institutions  was the best way for  a state to                                                                    
ensure  its  ability  to provide  for  its  citizens.  While                                                                    
seeking  efficiencies  and  looking  for  cost  cutting  was                                                                    
important, he  believed affirming state government  to carry                                                                    
out the will of the people  was the best way to help provide                                                                    
for the  welfare of all.  He believed that drawing  from the                                                                    
PF responsibly,  instituting a  progressive income  tax, and                                                                    
making sure  that resource extractors paid  their fair share                                                                    
was  a  good   way  to  move  forward.   He  encouraged  the                                                                    
legislature to go  forward with HB 115 and  to consider ways                                                                    
in which to make income  taxation more fair and progressive.                                                                    
He thought  Alaskans should do  their best to  assist others                                                                    
that were not as fortunate.                                                                                                     
                                                                                                                                
Co-Chair   Foster  indicated   that   after  the   following                                                                    
testifier the  committee would be taking  a 10-minute break.                                                                    
When  everyone   came  back,  they  would   be  hearing  the                                                                    
remaining testifiers;  at present  86 people were  signed up                                                                    
to testify.                                                                                                                     
                                                                                                                                
3:30:03 PM                                                                                                                    
                                                                                                                                
KEVIN  ALLEN, SELF,  JUNEAU, spoke  in favor  of HB  115. He                                                                    
appreciated  the  legislation   being  brought  forward.  He                                                                    
talked  about  a  teleconference   from  1991  with  several                                                                    
governors together.  He was concerned with  things ending up                                                                    
similar to last  year at the end of session.  He thanked the                                                                    
committee.                                                                                                                      
                                                                                                                                
Co-Chair  Foster would  be hearing  testimony  for those  at                                                                    
off-net sites.                                                                                                                  
                                                                                                                                
3:32:36 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:50:22 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster  noted only 68  phone lines  were available.                                                                    
He asked  people to use  alternative options to the  off net                                                                    
lines if possible.                                                                                                              
                                                                                                                                
Vice-Chair Gara clarified that  Co-Chair Foster was speaking                                                                    
about people who had already testified.                                                                                         
                                                                                                                                
Co-Chair Foster agreed.                                                                                                         
                                                                                                                                
3:51:43 PM                                                                                                                    
                                                                                                                                
JAKE  JACOBSEN,  SELF,   KODIAK  (via  teleconference),  was                                                                    
opposed to  the Permanent  Fund portion of  the legislation.                                                                    
He thought  the legislature should  leave PFDs in  place but                                                                    
supported an  income tax. He  was also  in favor of  a state                                                                    
sales tax  and suggested a  rebate program for  people whose                                                                    
income fell  below the poverty  level equal to the  tax they                                                                    
would  pay in  the same  year. He  opposed spending  on mega                                                                    
projects  including the  Alaska Liquefied  Natural Gas  Line                                                                    
(AKLNG) project.  He also  supported a  capital move  out of                                                                    
Juneau. He asserted that the  credibility of the legislature                                                                    
was  damaged by  the  corruption reported  in the  newspaper                                                                    
including the Anchorage  Legislative Information Office, the                                                                    
abuse of  travel and per diem,  and the lack of  ethics in a                                                                    
person's  ability  to  recuse   themselves  in  a  vote.  He                                                                    
supported the passage of HB  44 introduced by Representative                                                                    
Jason  Grenn  [HB  44 was  legislation  introduced  in  2017                                                                    
regarding legislative  ethics around voting  and conflicts].                                                                    
He also  thought one  of the most  important issues  for the                                                                    
legislature to address was the  issue of big oil. He opposed                                                                    
HB 115 for several reasons,  most importantly because of its                                                                    
complexity.  He  argued  that each  bill  should  address  a                                                                    
single issue. He furthered that  the bill would fail because                                                                    
it was trying to address too many issues.                                                                                       
                                                                                                                                
3:54:41 PM                                                                                                                    
                                                                                                                                
NICK SZABO,  SELF, KODIAK (via teleconference),  thanked the                                                                    
co-chairs  for  introducing  the  legislation.  He  was  not                                                                    
completely familiar with  all of the specifics  of the bill.                                                                    
However,  he supported  the  concept of  an  income tax  and                                                                    
utilizing earnings  from the Permanent Fund.  He believed it                                                                    
was  necessary to  be selective  about  cutting the  budget.                                                                    
Cuts  could transfer  liability  to local  entities such  as                                                                    
schools.                                                                                                                        
                                                                                                                                
3:56:40 PM                                                                                                                    
                                                                                                                                
GEORGE   PIERCE,   SELF,   KASILOF   (via   teleconference),                                                                    
supported the  income tax portion  of the bill, but  not the                                                                    
Permanent Fund  reduction. Although  he did not  want taxes,                                                                    
he supported  an income tax over  a sales tax. He  asked the                                                                    
committee  to restructure  oil and  gas credits  as well  as                                                                    
other tax structures prior to  taking away PFDs. He referred                                                                    
to credits  provided to Point  Thomson and listed  other tax                                                                    
credits  he opposed.  He stressed  that the  state was  in a                                                                    
recession and should  be trimming back. He  believed the two                                                                    
issues in the legislation  should be separate. He emphasized                                                                    
the need  for the legislature  to address tax  incentives to                                                                    
the oil industry. He urged  the committee to stop increasing                                                                    
government.                                                                                                                     
                                                                                                                                
3:59:11 PM                                                                                                                    
                                                                                                                                
PATRICK  MCCOY,   SELF,  UNALAKLEET   (via  teleconference),                                                                    
testified in opposition  to the bill because of  the cost of                                                                    
implementing  a  tax. He  mentioned  the  money being  spent                                                                    
excessively  by  school  districts  on  travel  to  sporting                                                                    
events.  He did  not think  the current  financial situation                                                                    
was different  from other  times in  the past.  He mentioned                                                                    
the  cost  of  groceries  in   the  state  and  noted  price                                                                    
differences  between rural  and urban  areas. He  stated the                                                                    
bill would extract  more from Alaskans by  taking money from                                                                    
PFDs  and adding  taxes. He  opined  that it  was already  a                                                                    
sacrifice  to live  in Alaska  because of  the high  cost of                                                                    
living.  He  suggested  implementing  a bed  tax  to  target                                                                    
tourists. He strongly opposed HB 115.                                                                                           
                                                                                                                                
4:04:40 PM                                                                                                                    
                                                                                                                                
DAVE  JONES,   ASSISTANT  SUPERINTENDENT,   KENAI  PENINSULA                                                                    
BOROUGH  SCHOOL  DISTRICT,  SOLDOTNA  (via  teleconference),                                                                    
testified  in  favor  of  HB   115.  He  advocated  for  the                                                                    
development  of  a  multi-revenue  fiscal  plan  that  would                                                                    
provide  sustained,   reliable,  and   adequate  educational                                                                    
funding for Alaska's  students. He asserted that  HB 115 met                                                                    
the  school district's  priority. He  was also  representing                                                                    
the  Alaska Association  of School  Business officials.  The                                                                    
entity  partnered with  other  members to  create  a set  of                                                                    
joint position statements  regarding legislative priorities.                                                                    
He read a portion of the 2017 joint position statement:                                                                         
                                                                                                                                
     "Alaska's most important need is to immediately                                                                            
     develop and implement a long term multi-revenue fiscal                                                                     
     plan."                                                                                                                     
                                                                                                                                
He  reiterated the  entity's  support of  HB  115. He  urged                                                                    
members to act  in the current year. He did  not want to see                                                                    
another  year   of  non-action.   He  thanked   members  for                                                                    
introducing a needed fiscal plan for Alaska.                                                                                    
                                                                                                                                
4:06:42 PM                                                                                                                    
                                                                                                                                
PENCIA  ROSE BEATON,  SELF, ANCHORAGE  (via teleconference),                                                                    
spoke against  HB 115.  She provided  background information                                                                    
about her family's  history in Alaska. She  relayed that she                                                                    
did   not  feel   she  was   properly  represented   in  the                                                                    
legislature  and agreed  with  a previous  speaker that  the                                                                    
government  was  guilty  of  gross  negligence.  She  wanted                                                                    
smaller government with people  involved who cared about the                                                                    
economy and about the needs  of Alaskans. She admonished the                                                                    
legislature  to stop  stealing  from  Alaskans. She  opposed                                                                    
HB 115.                                                                                                                         
                                                                                                                                
4:08:33 PM                                                                                                                    
                                                                                                                                
ALICIA  AMBERG, ALASKA  MINERS ASSOCIATION  (AMA), ANCHORAGE                                                                    
(via teleconference), spoke  in favor of HB  115. She shared                                                                    
information about  the association and read  from a prepared                                                                    
statement:                                                                                                                      
                                                                                                                                
     AMA  has  a positon  about  fiscal  policy that  reads,                                                                    
     "Immediately   implement  a   comprehensive,  long-term                                                                    
     fiscal plan  in 2017 that ensures  responsible spending                                                                    
     at a sustainable  level of between $4.1  - $4.5 billion                                                                    
     dollars. Such a plan  should include budget reductions,                                                                    
     use of  Permanent Fund earnings,  and new  revenue from                                                                    
     broad-based taxes. In order  to reduce state government                                                                    
     expenses,  the  legislature  should  repeal  laws  that                                                                    
     create expenditures but are  not a necessary government                                                                    
     function.   Ensure  State   of  Alaska   fiscal  policy                                                                    
     includes strategies  to grow  and diversify  the Alaska                                                                    
     private economy."                                                                                                          
                                                                                                                                
     We maintain  that budget reductions are  imperative for                                                                    
     a   sustainable  budget   for  Alaska.   We  urge   the                                                                    
     Legislature  to keep  examining all  state expenditures                                                                    
     to identify efficiencies  and reductions. For specifics                                                                    
     regarding  these   suggestions,  we  would   refer  the                                                                    
     Committee to the Commonwealth North report.                                                                                
                                                                                                                                
     In   addressing  revenue   measures   to  provide   for                                                                    
     essential state  functions and services, step  one must                                                                    
     be  use of  the Permanent  Fund, which  was created  to                                                                    
     fund  a  significant  portion of  state  services  when                                                                    
     revenues  from  oil  could no  longer  be  the  funding                                                                    
     source  for most  of state  government. There  are many                                                                    
     options  for additional  revenue  sources  to fill  any                                                                    
     remaining  gap  to  fund government,  including  income                                                                    
     tax.                                                                                                                       
                                                                                                                                
     Thank you  for the  opportunity to provide  comment. We                                                                    
     commend your  committee for consideration  of solutions                                                                    
     to our fiscal challenges.                                                                                                  
                                                                                                                                
4:10:49 PM                                                                                                                    
                                                                                                                                
DAVID   TRANTHAM,   SELF,   BETHEL   (via   teleconference),                                                                    
testified in  favor of  the legislation.  He shared  that he                                                                    
was  a  71  year  resident   of  Alaska.  He  commended  the                                                                    
committee for putting  a bill on the table  and stressed the                                                                    
need  to  diversify the  state's  revenue.  He believed  the                                                                    
legislature  had provided  the opportunity  for citizens  to                                                                    
speak their  minds. He underscored that  something needed to                                                                    
be done  in the  current year to  address the  budget crisis                                                                    
facing  the state.  He recalled  the highs  and lows  of his                                                                    
past. He stated  it was necessary to buckle  down. He stated                                                                    
there was  a cost to  everything. He discussed the  need for                                                                    
everyone  to be  a  part  of the  solution.  He thanked  the                                                                    
committee for offering the bill.                                                                                                
                                                                                                                                
4:14:55 PM                                                                                                                    
                                                                                                                                
BONNIE BURGAN-KELLY, SELF,  PALMER (via teleconference), was                                                                    
opposed  to  any taxes  until  additional  budget cuts  were                                                                    
made. She  stated that five years  previously everyone could                                                                    
see that oil production was  approaching an end. She pointed                                                                    
to  large projects  the legislature  had  funded instead  of                                                                    
taking  action. She  supported a  plan  proposed by  Senator                                                                    
Mike  Dunleavy  [SB  84 -  Legislation  introduced  in  2017                                                                    
regarding the  Permanent Fund  earnings, dividends,  and the                                                                    
general fund] and encouraged members to consider it.                                                                            
                                                                                                                                
4:16:28 PM                                                                                                                    
                                                                                                                                
THOMAS   WILLIAMS,  SELF,   CHUGIAK  (via   teleconference),                                                                    
testified against the bill. He  stated change was needed and                                                                    
the  state  government  was still  too  large.  He  believed                                                                    
spending  half   the  state's   budget  on   healthcare  and                                                                    
education was too much. He  remarked that the one thing that                                                                    
kept the state  alive was its resources. He  did not support                                                                    
cuts to  the dividend. He  stated the legislature  had taken                                                                    
money  out  of  people's  pockets.  He  supported  a  budget                                                                    
reduction plan  by Senator  Mike Dunleavy.  He did  not know                                                                    
anyone who wanted  to pay new taxes.  He thought individuals                                                                    
wanted to make  other people pay more taxes.  He wondered if                                                                    
the issues would be put to a vote of the people.                                                                                
                                                                                                                                
Co-Chair Foster  clarified that the committee  was currently                                                                    
taking public testimony on HB 115.                                                                                              
                                                                                                                                
Mr. Williams restated his question.                                                                                             
                                                                                                                                
Co-Chair Foster  indicated that the  issue would need  to be                                                                    
discussed at another time.                                                                                                      
                                                                                                                                
4:20:08 PM                                                                                                                    
                                                                                                                                
KAREN  PERRY,  SELF,  CHUGIAK  (via  teleconference),  spoke                                                                    
against HB  115. She thought  the bill should be  called the                                                                    
"Rob  Alaskans Blind  Bill." She  agreed with  other callers                                                                    
who  suggested breaking  the  legislation  up into  multiple                                                                    
bills.  She asserted  that  Alaska was  in  a recession  and                                                                    
HB 115 would  make things  much worse.  She opined  that the                                                                    
legislature needed to be concerned  with the overall economy                                                                    
of Alaska  rather than the  growth of state  government. She                                                                    
asked  if the  committee  members had  read, "Diapering  the                                                                    
Devil" by  former Governor Jay  Hammond or the model  by the                                                                    
Institute  of  Social  and  Economic  Research  (ISER).  She                                                                    
stressed that  presently the  state took  75 percent  of all                                                                    
mineral lease revenues but could  not manage money well. She                                                                    
contended  that the  legislature wanted  to steal  from hard                                                                    
working   Alaskans.  She   believed   the  legislature   had                                                                    
continued to  spend for years.  She did not  support putting                                                                    
the  burden  on  the  people.  She  strongly  suggested  the                                                                    
committee invite  Brad Keithly, the founder  of Alaskans for                                                                    
Sustainable Budgets,  to Juneau to present  facts making the                                                                    
case  for  using  the  Jay Hammond  plan.  She  thought  the                                                                    
committee would want  to get all of the  facts before making                                                                    
a  decision.  She   asked  the  committee  to   do  its  due                                                                    
diligence.  She avowed  that an  income  tax would  penalize                                                                    
hard  working producers  of  the state.  It  would add  more                                                                    
onerous red  tape to small  business owners and  would deter                                                                    
others  from starting  a small  business. She  addressed the                                                                    
proposed capital  gains tax, which  she opposed.  She argued                                                                    
that  government needed  to make  further reductions  rather                                                                    
than taxing Alaskans. She strongly opposed HB 115.                                                                              
                                                                                                                                
4:24:19 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  pointed  out   that  Co-Chair  Seaton  was                                                                    
currently chairing  a House  Finance Subcommittee.  He noted                                                                    
that presently  there were  plenty of  open phone  lines for                                                                    
folks that wanted to call in to testify.                                                                                        
                                                                                                                                
4:24:59 PM                                                                                                                    
                                                                                                                                
CARMEN  GUTIERREZ,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
spoke in  support of HB 115.  She paid an income  tax in the                                                                    
70s and opposed  the elimination of the tax in  the 80s. She                                                                    
believed  Alaskans  had a  long  history  of entitlement  in                                                                    
which they  received infrastructure benefits  without paying                                                                    
for  them. She  believed  entitlement needed  to cease.  She                                                                    
supported a  progressive income  tax and  opposed additional                                                                    
budget cuts. She  valued Alaska as a state and  did not want                                                                    
to live  in a place that  became stingy and ugly  because of                                                                    
government  cuts  to services.  She  opined  that the  state                                                                    
needed to generate revenue to  cover the budget. She thought                                                                    
a progressive  income tax  was the  most fair  and equitable                                                                    
means  of   increasing  revenues.  She  believed   the  bill                                                                    
protected  the  PF for  future  generations.  She urged  the                                                                    
committee to pass HB 115.                                                                                                       
                                                                                                                                
4:30:01 PM                                                                                                                    
                                                                                                                                
STEPHEN SENISCH,  SELF, WASILLA (via  teleconference), spoke                                                                    
against  HB  115.  He  suggested  the  bill  would  tax  all                                                                    
Alaskans,  lead to  fewer people  living in  the state,  and                                                                    
result in less  revenue. He supported reducing  the size and                                                                    
scope of  state government to  a more sustainable  level. He                                                                    
referred  to the  Alaska Policy  Forum and  articles on  its                                                                    
website. He believed every Alaskan  should read the articles                                                                    
that showed how  to solve the budget  problem without taxing                                                                    
every  Alaskan. He  remarked the  state had  foolishly spent                                                                    
$50  million on  the  AKLNG  project when  it  would not  be                                                                    
economically  feasible for  several decades.  He underscored                                                                    
that legislators  needed to  do their  jobs to  make further                                                                    
cuts to government.                                                                                                             
                                                                                                                                
4:32:46 PM                                                                                                                    
                                                                                                                                
JANICE   RAISANEN,  SELF,   WASILLA  (via   teleconference),                                                                    
testified  in  opposition  to  HB  115.  She  expressed  her                                                                    
frustration  that the  hearing was  being held  on a  Friday                                                                    
afternoon while most Alaskans were  working. She was opposed                                                                    
to a  state income  tax. She believed  the people  in Alaska                                                                    
taking  advantage of  welfare and  social programs  were the                                                                    
same people  who would only  pay the  minimum tax of  $25 if                                                                    
the legislation were adopted.  Although capturing taxes from                                                                    
out-of-state workers  would be  helpful, their  families did                                                                    
not  utilize the  state's social  and welfare  programs. She                                                                    
argued  that the  state needed  to reach  out to  the people                                                                    
taking advantage  of the  state that  were not  working. She                                                                    
saw a  state sales tax as  a more equitable option.  She was                                                                    
tired  of people  that  worked  hard giving  to  all of  the                                                                    
welfare  and  social  programs.   She  made  it  clear  that                                                                    
spending for those programs should  stop. She reiterated her                                                                    
support of a state sales tax  over an income tax. She opined                                                                    
that  it was  time  for people  to  take responsibility  for                                                                    
their own  well-being versus relying on  the government. She                                                                    
supported  additional   cuts  rather  than   taxing  working                                                                    
people.                                                                                                                         
                                                                                                                                
4:35:39 PM                                                                                                                    
                                                                                                                                
ARLENE  RONDA, SELF,  HOMER (via  teleconference), spoke  in                                                                    
support of  HB 115.  She reported that  she and  her husband                                                                    
came  to Alaska  in the  territorial days,  liked what  they                                                                    
saw, and  made Alaska their  home. She and  family supported                                                                    
an income  tax in  the 70s.  In the early  days, she  paid a                                                                    
state  income tax  willingly  to  support state  government.                                                                    
Following  that  time  when oil  was  discovered  the  state                                                                    
income  tax  went  away  and  the  PF  was  wisely  started.                                                                    
Presently,  oil   income  was  no  longer   dependable.  She                                                                    
asserted that it was time  for all Alaskans to contribute in                                                                    
a  fair  and  balanced   way  towards  state  services.  She                                                                    
commended  the co-chairs  for putting  forth  the bill.  She                                                                    
underscored her support.                                                                                                        
                                                                                                                                
4:37:03 PM                                                                                                                    
                                                                                                                                
RICHARD   GUSTAFSON,  SELF,   HOMER  (via   teleconference),                                                                    
thanked Co-Chair  Foster and Co-Chair  Seaton for  trying to                                                                    
stop kicking  the can down the  road. He was in  favor of an                                                                    
income tax  and hoped the  bill would protect  and inflation                                                                    
proof the Permanent Fund.                                                                                                       
                                                                                                                                
4:38:38 PM                                                                                                                    
                                                                                                                                
MERRICK  PEIRCE,   SELF,  FAIRBANKS   (via  teleconference),                                                                    
testified  against  the  bill.  He  opined  that  the  least                                                                    
recessionary approach  was needed to reduce  the deficit. He                                                                    
offered that  Robin Brena had  outlined such an  approach to                                                                    
ensure that Alaska  received a sure and  balanced return for                                                                    
oil particularly from the legacy  fields such a Prudhoe Bay.                                                                    
He  suggested  that  members invite  Mr.  Brena  to  testify                                                                    
before  the  committee  to  explain   how  SB  21  [oil  tax                                                                    
legislation passed  in 2013] has  utterly failed  Alaska. He                                                                    
cited  some statistics  around the  oil tax  legislation. He                                                                    
argued that taking  money from Alaskan families  in the form                                                                    
of an  income tax in  combination with a regressive  raid of                                                                    
dividends would  deepen the state's recession.  He furthered                                                                    
that raising  taxes in  a recession  was the  worst possible                                                                    
remedy.  He claimed  that it  was  morally wrong  to use  an                                                                    
income tax and a raid  on dividends to subsidize the give-a-                                                                    
way of the state's oil.  He added that the state's long-term                                                                    
obligations,   including  a   massive  underfunded   pension                                                                    
system, would not be met with  HB 115. He believed the first                                                                    
priority needed to  be taking a fair return  for the state's                                                                    
oil followed by making sensible budget reductions.                                                                              
                                                                                                                                
4:41:37 PM                                                                                                                    
                                                                                                                                
JERRY  ALDERMAN,   SELF,  ANCHORAGE   (via  teleconference),                                                                    
supported HB 115.  He was confused by the  numbers listed on                                                                    
the Sponsor Statement, as they did  not add up to the number                                                                    
mentioned previously. He did not  want the bill to fund only                                                                    
a  portion of  the state  deficit. He  did not  want further                                                                    
reductions  to the  state budget.  He supported  solving the                                                                    
entire fiscal problem as soon as possible.                                                                                      
                                                                                                                                
Co-Chair Foster  referred Mr. Alderman to  Co-Chair Seaton's                                                                    
office to assist him with some of the numbers he noted.                                                                         
                                                                                                                                
4:43:22 PM                                                                                                                    
                                                                                                                                
JEFFREY  TODD BROWN,  SELF, ANCHORAGE  (via teleconference),                                                                    
spoke  in opposition  to HB  115. He  believed the  bill was                                                                    
extreme and disagreed  with comments made that  the bill was                                                                    
progressive.  He   provided  an  example  related   to  home                                                                    
mortgages. He  believed in a broad-based  system of taxation                                                                    
than what  was presented  in the  bill. He  acknowledged the                                                                    
importance  of government  and  the  structure it  provided.                                                                    
However,  he  believed  everyone  needed  to  share  in  the                                                                    
burden. He  supported a  sales tax and  a corporate  tax. He                                                                    
thought  Alaska needed  broad-based  taxation implemented  a                                                                    
little  at a  time.  He asserted  that  the legislature  was                                                                    
wasting money.                                                                                                                  
                                                                                                                                
4:46:50 PM                                                                                                                    
                                                                                                                                
WILLIAM  HARRINGTON, SELF,  ANCHORAGE (via  teleconference),                                                                    
opposed HB 115. He referred  to chronic mismanagement of the                                                                    
state. He  was a  senior that  received benefits  because of                                                                    
decades of  working. He  thought the  state was  moving away                                                                    
from being an elder-friendly  state. He suggested that there                                                                    
would  be unintended  consequences from  driving the  senior                                                                    
population out of  state. He spoke to the  lack of fiduciary                                                                    
responsibility  of  the  legislature   to  the  citizens  of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
4:49:36 PM                                                                                                                    
                                                                                                                                
MICHAEL  CHAMBERS,   UNITED  FOR  LIBERTY,   ANCHORAGE  (via                                                                    
teleconference), reported that three  years prior he had had                                                                    
the opportunity to meet with  5 legislators during a special                                                                    
session. He  liked having direct access  to his legislators.                                                                    
He was  involved in designing  a 96-page budget  book, which                                                                    
incorporated  $1.5 billion  in  reductions.  He provided  an                                                                    
example  of  one  of  the  recommended  reductions.  He  had                                                                    
delivered  the book  to each  legislator  while visiting  in                                                                    
Juneau  during  the  current   session.  He  encouraged  all                                                                    
legislators to  visit a particular  website. He  relayed the                                                                    
mission  of  the  group.  He   remarked  that  there  was  a                                                                    
communication disconnect  between legislators  and Alaskans.                                                                    
He   mentioned  the   massive   redundancies  within   state                                                                    
government.   He  suggested   that  many   legislators  were                                                                    
advocating the  restructuring of  the PFD  and incorporating                                                                    
an  assortment   of  tax   schemes.  He   supported  Senator                                                                    
Dunleavy's plan to right-size  government. He argued against                                                                    
HB 115.                                                                                                                         
                                                                                                                                
4:52:29 PM                                                                                                                    
                                                                                                                                
TERRENCE  SHANIGAN,  SELF, ANCHORAGE  (via  teleconference),                                                                    
opposed  HB 115.  He  reported that  only  one-third of  the                                                                    
government's budget  paid for employee salaries.  He thought                                                                    
further cuts  were necessary. There were  competing services                                                                    
that  needed   to  be   eliminated.  He   advocated  further                                                                    
reductions. In the previous year,  only 3.5 percent had been                                                                    
cut from the operating budget.  He disagreed that the budget                                                                    
had not  been reduced  to the  bone. He  thought legislators                                                                    
needed to work harder  at identifying further reductions. He                                                                    
relayed  a statement  from a  member of  the other  body. He                                                                    
thought  a  sustainable  budget   was  impossible  in  state                                                                    
government.  He suggested  constructing  a  budget that  the                                                                    
state could  afford from  the ground  up. He  claimed having                                                                    
identified  $1.5  billion  reductions  that  could  be  made                                                                    
rather than raiding the PF.                                                                                                     
                                                                                                                                
4:57:17 PM                                                                                                                    
                                                                                                                                
CHRISTINE NEES, SELF,  ANCHORAGE (via teleconference), spoke                                                                    
against HB  115. She thought  state spending was  similar to                                                                    
giving a credit  card to a teenager and sending  them to the                                                                    
mall. She  thought certain exemptions should  be included in                                                                    
the capital gains portion of the  bill. She hoped for a more                                                                    
appropriate state model.                                                                                                        
                                                                                                                                
5:00:00 PM                                                                                                                    
                                                                                                                                
DAVID   NEES,   ALASKA    POLICY   FORUM,   ANCHORAGE   (via                                                                    
teleconference),  spoke  in  opposition   to  the  bill.  He                                                                    
indicated  there  had been  a  stress  test applied  to  the                                                                    
legislation, which was rated negative  6. In other words, it                                                                    
impaired   6  functions   of   freedom   for  Alaskans.   He                                                                    
highlighted that in  Section 4 of the bill  the word "shall"                                                                    
was  changed to  "May."  The use  of the  word  "may" was  a                                                                    
problem because  it gave the  legislature permission  not to                                                                    
appropriate money.  He also  pointed out  that the  bill did                                                                    
not  have a  start date.  Therefore, it  was unclear  if the                                                                    
calendar year  or a state  fiscal year applied.  He provided                                                                    
some figures  accompanying the proposed tax  legislation. He                                                                    
suggested that  the tax  proposed was not  fair. He  noted a                                                                    
retroactive clause as well.                                                                                                     
                                                                                                                                
5:02:28 PM                                                                                                                    
                                                                                                                                
JANET MCCABE   SELF ANCHORAGE  (via  teleconference),  spoke                                                                    
in  support  of  HB  115.  She  and  her  husband  had  been                                                                    
homeowners  in  Anchorage  since  1965. She  had  seen  many                                                                    
attempts  to  solve  the  problem of  relying  on  a  single                                                                    
volatile source  of state revenue. She  believed uncertainty                                                                    
and instability were damaging Alaska's  economy. She did not                                                                    
think  making  additional cuts  was  the  solution. She  had                                                                    
witnessed a stream  of people leaving the  state. She opined                                                                    
that  for Alaska  to  flourish  it must  have  a stable  and                                                                    
consistent  revenue structure.  She agreed  with a  previous                                                                    
testifier  that  businesses  in Alaska  were  holding  their                                                                    
breath. She professed  that HB 115 was  the best opportunity                                                                    
Alaska has had to establish  a stable revenue structure. She                                                                    
furthered that  the legislation  was predicated  on fairness                                                                    
to all Alaskans.  She highlighted that by  protecting the PF                                                                    
and  the   PFD  rural   Alaskans  would  continue   to  have                                                                    
assistance  in  heating  their  homes  and  subsisting.  She                                                                    
considered  it a  privilege to  pay an  income tax  based on                                                                    
each individual's ability to pay.  She supposed that because                                                                    
HB 115 combined revenue sources there  was no way to be able                                                                    
to please everyone. She concluded  by asking the legislature                                                                    
to come together and pass HB 115 in the current session.                                                                        
                                                                                                                                
5:05:03 PM                                                                                                                    
                                                                                                                                
ROBIN   SMITH,   SELF,   ANCHORAGE   (via   teleconference),                                                                    
testified in  support of HB  115. She thanked  the committee                                                                    
for working on  the issue of designing  a much-needed stable                                                                    
fiscal plan. She reported being  a small business owner with                                                                    
her  husband  for   over  45  years.  She   spoke  to  great                                                                    
opportunities provided in Alaska.  She admitted her business                                                                    
was  currently struggling  because  of the  downturn in  the                                                                    
economy.  She   purported  that  Alaskans  needed   to  take                                                                    
responsibility by  paying their fair share  for the benefits                                                                    
they received.  She was  willing to pay  an income  tax. She                                                                    
made note that a portion  of people's state income tax could                                                                    
be  written off  their  federal income  tax.  She wanted  to                                                                    
maintain a good quality of  life for herself and others. She                                                                    
ascribed  that children  were Alaska's  future and  spoke to                                                                    
the importance of education. She  was deeply concerned about                                                                    
further  cuts  to   healthcare,  transportation,  and  other                                                                    
arenas. She  was aware that  because Alaska was  an enormous                                                                    
state, costs were  higher than in others.  She reasoned that                                                                    
every  state  in the  U.S.  operated  on tax  revenues.  She                                                                    
remarked that Alaska has been  fortunate to have an abundant                                                                    
supply  of oil.  She  supposed  that with  the  drop in  oil                                                                    
prices she would  have to capitulate to  taxation. She found                                                                    
it curious that some Alaskans  wanted to see additional cuts                                                                    
made  to the  budget but  were not  willing to  specify what                                                                    
areas should  be reduced. She highlighted  that Alaskans had                                                                    
become accustomed  to receiving free services.  However, she                                                                    
asserted  that it  was time  to start  paying for  them. She                                                                    
reiterated her appreciation of the  hard work of the writers                                                                    
of the bill.                                                                                                                    
                                                                                                                                
5:10:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  understood that  some individuals  had time                                                                    
constraints. He offered the email  address to submit written                                                                    
testimony.                                                                                                                      
                                                                                                                                
5:10:43 PM                                                                                                                    
                                                                                                                                
PAUL KENDALL,  SELF, ANCHORAGE (via  teleconference), called                                                                    
for a  point of  order. He  asked about  the rules  and laws                                                                    
that governed the current public testimony.                                                                                     
                                                                                                                                
Co-Chair Foster  explained that the committee  was currently                                                                    
taking  public testimony.  Members wanted  to hear  what the                                                                    
public had to say and to  create a record. He encouraged Mr.                                                                    
Kendall to proceed with his testimony.                                                                                          
                                                                                                                                
Mr. Kendall testified that all  the state's problems were 98                                                                    
percent  leadership-based.  He  accused the  legislature  of                                                                    
going  to Juneau  to negotiate  in secret.  He spoke  to the                                                                    
complexity  of the  issues  being  considered. His  comments                                                                    
reflected his discontent with the  legislature. He read from                                                                    
Alaska's    constitution.    He    further    relayed    his                                                                    
dissatisfaction with the  legislature. He opposed decreasing                                                                    
the  PFD. He  continued to  provide testimony  regarding his                                                                    
dissatisfaction.                                                                                                                
                                                                                                                                
5:19:58 PM                                                                                                                    
                                                                                                                                
KELLY REPNOW,  SELF, PALMER (via  teleconference), testified                                                                    
against HB 115.  He believed the issues in HB  115 should be                                                                    
addressed in separate legislation.  He favored a 2-year cap.                                                                    
He  saw the  legislation as  a way  of taking  the Permanent                                                                    
Fund  and turning  it into  permanent funding.  He suggested                                                                    
that the perception of the  state's fiscal situation changed                                                                    
when there  was a  change in  governors. He  suggested using                                                                    
the  funds  from  the Constitutional  Budget  Reserve  (CBR)                                                                    
prior to  using the PF.  He also  advocated taking out  a PF                                                                    
loan with a promise to repay  if cash was needed. He favored                                                                    
cutting  spending  not   funding  unnecessary  projects.  He                                                                    
considered tapping  the PFD to  be "kid taxation."  Money in                                                                    
the form  of PFDs went  directly into the local  economy. He                                                                    
recommended  town hall  meetings on  HB 115.  He spoke  to a                                                                    
number of  state expenditures.  He spoke  to the  North Pole                                                                    
refinery  that had  been  shut down  due  to reductions.  He                                                                    
believed individuals should  support legislation proposed by                                                                    
Senator Dunleavy. He reiterated  that the issues existing in                                                                    
HB 115 should be addressed  in separate legislation and that                                                                    
there should be a 2-year cap in place.                                                                                          
                                                                                                                                
5:24:10 PM                                                                                                                    
                                                                                                                                
STEPHEN WRIGHT, SELF,  WASILLA (via teleconference), opposed                                                                    
HB  115. He  believed  the  bill was  a  lemon.  He did  not                                                                    
support  the   use  of  the   Permanent  Fund   and  thought                                                                    
additional  cuts were  necessary.  He  continued to  provide                                                                    
some statistics.  He concluded  that he was  a "No"  vote on                                                                    
the  bill. He  also noted  that the  economy needed  further                                                                    
boosting.                                                                                                                       
                                                                                                                                
5:27:10 PM                                                                                                                    
                                                                                                                                
ED  LARRIVEE  II,   SELF,  ANCHORAGE  (via  teleconference),                                                                    
opposed HB 115. He claimed  citizens did not want and income                                                                    
tax  or their  PFD  taken  away. He  opined  that the  state                                                                    
needed legislators  that represented  the people  of Alaska.                                                                    
He suggested that legislators should  listen to a particular                                                                    
morning radio  show. He relayed  that he would only  be open                                                                    
to a state income tax after legislators reduced the budget.                                                                     
                                                                                                                                
5:30:50 PM                                                                                                                    
                                                                                                                                
JAMES SQUYRES, SELF,     RURAL          DELTANA         (via                                                                    
teleconference),  testified  in  opposition to  HB  115.  He                                                                    
thought the bill went too  far and that he preferred Senator                                                                    
Dunleavey's bill. [The call was dropped].                                                                                       
                                                                                                                                
5:32:32 PM                                                                                                                    
                                                                                                                                
RICHARD  HELLER, SELF,  BUTTE (via  teleconference), opposed                                                                    
HB 115. He  favored Senator Dunleavy's bill.  He opined that                                                                    
the governor's AKLNG  project was a boondoggle.  He spoke to                                                                    
the  negative   aspects  of  the  project.   [The  call  was                                                                    
dropped].                                                                                                                       
                                                                                                                                
5:33:20 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:36:13 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SHARON CISSNA,  SELF, ANCHORAGE (via  teleconference), spoke                                                                    
in favor  of HB 115. She  stated that the state  needed many                                                                    
voices.  She  provided   some  historical  background  about                                                                    
herself and  her family.  She thought  the state  was having                                                                    
some  issues.  She  thanked the  committee  for  having  the                                                                    
hearing.  She relayed  that  she would  be  sending in  some                                                                    
information and thanked the committee.                                                                                          
                                                                                                                                
Vice-Chair Gara wanted to say  hello and thanked her for all                                                                    
of her service.                                                                                                                 
                                                                                                                                
Co-Chair  Foster   explained  that   there  had   been  some                                                                    
technical difficulties.                                                                                                         
                                                                                                                                
Mr.  Squyres resumed  his testimony.  He thought  the POMV's                                                                    
feature had  gone too far. He  supported Senator Dunleavey's                                                                    
legislation. He  thought it was  more moderate than  HB 115.                                                                    
He thought the  capital gains tax contained in  the bill was                                                                    
a  scalping  tax. He  mentioned  he  was familiar  with  the                                                                    
capital gains sliding  tax, as he had been  an accountant in                                                                    
Texas.  He  provided  examples  of  the  complexity  of  the                                                                    
proposed tax. He reiterated his opposition to the bill.                                                                         
                                                                                                                                
5:45:05 PM                                                                                                                    
                                                                                                                                
JOHN FARLEIGH, SELF,     ANCHORAGE   (via   teleconference),                                                                    
supplied  some historical  background  about  his family  in                                                                    
Alaska.  He was  concerned  how his  kids and  grandchildren                                                                    
would  survive  in  the  state. He  had  been  a  commercial                                                                    
fisherman for  25 years. He  supported HB 115  including the                                                                    
15 percent income  tax and he supported using  a POMV model.                                                                    
He supported restructuring oil tax  credits and using the PF                                                                    
earnings.  He  objected  to   people  using  state  services                                                                    
without paying for them.                                                                                                        
                                                                                                                                
5:49:30 PM                                                                                                                    
                                                                                                                                
LARRY MICHAELSON,   SELF,       MEADOW      LAKES       (via                                                                    
teleconference),  strongly  opposed   HB  115.  He  recently                                                                    
retired and lived on a fixed  income. He felt the rules were                                                                    
changing.  He   reported  that   his  property   taxes  have                                                                    
increased by 35 percent. He  thought that HB 115 would force                                                                    
people  to consider  moving from  the state  because of  the                                                                    
burden caused by additional  reductions. He strongly opposed                                                                    
HB 115.                                                                                                                         
                                                                                                                                
5:52:43 PM                                                                                                                    
                                                                                                                                
CINDY MICHAELSON, SELF,  MEADOW LAKES  (via teleconference),                                                                    
spoke  in   opposition  to  the  legislation.   She  thought                                                                    
additional cuts were necessary. She  opined that she did not                                                                    
want to  be responsible  for subsidizing people  choosing to                                                                    
live in rural Alaska. She  believed an income tax would only                                                                    
provide additional  funds to the  legislature to  waste. She                                                                    
suggested the state live within its means.                                                                                      
                                                                                                                                
5:55:00 PM                                                                                                                    
                                                                                                                                
RON  JOHNSON, SELF,  BUTTE  (via teleconference),  adamantly                                                                    
opposed HB 115. He  thought an income tax disproportionately                                                                    
affected Alaskans.  He believed  that the capital  gains tax                                                                    
hit  people too  hard. He  thought the  state had  done very                                                                    
little  to  cut  the  operating budget.  He  emphasized  his                                                                    
support for  Senator Dunleavey's plan. He  requested further                                                                    
hearings on HB 115, as  the legislation greatly affected all                                                                    
Alaskans.                                                                                                                       
                                                                                                                                
5:57:41 PM                                                                                                                    
                                                                                                                                
JANET JOHNSON, SELF, BUTTE  (via teleconference), opposed HB                                                                    
115. She  agreed with her husband's  testimony. She believed                                                                    
there were too many issues  being addressed in one bill. She                                                                    
wanted   to  see   the  topics   dealt   with  in   separate                                                                    
legislation.  She furthered  that there  should be  duration                                                                    
caps on  bills. She surmised  that the state had  a spending                                                                    
problem  rather  than a  revenue  problem.  She agreed  with                                                                    
Senator Dunleavy's plan to right-size government.                                                                               
                                                                                                                                
5:58:48 PM                                                                                                                    
                                                                                                                                
Mr.  Heller  was  back  online. He  continued  to  speak  in                                                                    
opposition of HB  115. He believed that an income  tax was a                                                                    
bad  idea. He  suggested  opening up  Alaska's resources  to                                                                    
generate revenue. He wondered  why Republican members on the                                                                    
finance committee were not on  some of the subcommittees. He                                                                    
advocated moving  the legislature  to Anchorage.  He thought                                                                    
the  state's spending  habits were  ridiculous. He  asserted                                                                    
that  people from  out of  state came  to Alaska,  got their                                                                    
Alaska  driver's  license,  and  were  receiving  fraudulent                                                                    
PFDs. He reemphasized  that it was time  for the legislature                                                                    
to stop spending money.                                                                                                         
                                                                                                                                
6:02:09 PM                                                                                                                    
                                                                                                                                
PAMELA GOODE   SELF RURAL   DELTANA  (via   teleconference),                                                                    
spoke  in opposition  of HB  115.  She argued  that for  the                                                                    
previous 10  years there  had been  a significant  amount of                                                                    
money  flowing into  the state  dramatically increasing  the                                                                    
size  and  scope of  government.  She  thought the  increase                                                                    
caused a substantial amount  of fiscal irresponsibility. She                                                                    
surmised the drop  in oil prices was not the  reason for the                                                                    
problem  but a  contributing factor.  She reasoned  that the                                                                    
legislature was using the fiscal  crisis as a way of getting                                                                    
into the  PF and  extracting taxes  from high  wage earners.                                                                    
She opined that  HB 115 did not fix the  fiscal problem. She                                                                    
thought  the  bill  attacked  new  investors  and  destroyed                                                                    
freedom and liberty. She opposed HB 115.                                                                                        
                                                                                                                                
6:05:14 PM                                                                                                                    
                                                                                                                                
DENNY    KAY   WEATHER,    SELF,    HAWKINS   ISLAND    (via                                                                    
teleconference), strongly opposed HB  115. She believed that                                                                    
any money going  into the state coffers would  be spent. She                                                                    
provided a  historical example.  She reported  that Governor                                                                    
Hammond  came  up with  the  PFD  to safeguard  the  state's                                                                    
assets. She did not believe  legislators had done their job.                                                                    
She added that  the governor had already  created a hardship                                                                    
for  Alaskans by  reducing  their  dividends. She  suggested                                                                    
making  additional cuts.  She appreciated  legislators being                                                                    
available to hear public testimony.                                                                                             
                                                                                                                                
6:09:01 PM                                                                                                                    
                                                                                                                                
SHELEE CHAMBERLAIN, SELF,  ANCHORAGE  (via  teleconference),                                                                    
opposed HB  115. She also  opposed giving oil  companies tax                                                                    
credits,  which she  believed lead  to the  creation of  the                                                                    
legislation.  She  praised  Governor Walker  for  trying  to                                                                    
protect  the PFD  by  taping the  dividend.  She was  highly                                                                    
opposed to  taking money from  the PF earnings  reserve. She                                                                    
commented that many small  communities were already burdened                                                                    
with a sales tax. She surmised  a state income tax would add                                                                    
to that burden. She spoke  to the possibility of being taxed                                                                    
twice on  the PFD. She added  that a minimum tax  of $25 was                                                                    
difficult  for some  people. She  thanked the  committee for                                                                    
hearing her testimony.                                                                                                          
                                                                                                                                
6:11:51 PM                                                                                                                    
                                                                                                                                
BRIAN FELDMANN,     SELF, FAIRBANKS (via teleconference),                                                                       
supported HB 115.  He favored an income tax and  a 6 percent                                                                    
sales  tax  but opposed  taking  the  people's dividend.  He                                                                    
opined that the legislature  should repay previous draws. He                                                                    
believed  the  oil  companies  should  pay  more  taxes  and                                                                    
advocated  the development  of Alaska's  future in  order to                                                                    
generate new revenues.                                                                                                          
                                                                                                                                
6:15:40 PM                                                                                                                    
                                                                                                                                
ROSS MULLINS, SELF, CORDOVA  (via teleconference),  spoke in                                                                    
support  of   HB  115.  He  emphasized   the  importance  of                                                                    
protecting and  growing the corpus  of the PF. He  was happy                                                                    
to  see  a bi-partisan  House.  He  thought the  legislature                                                                    
needed to  move forward  and do the  right thing.  He really                                                                    
did not  want his  PFD touched  but realized  that something                                                                    
had to be done.                                                                                                                 
                                                                                                                                
6:19:03 PM                                                                                                                    
                                                                                                                                
MICHAEL  SHELDON,  SELF,  PETERSBURG  (via  teleconference),                                                                    
spoke against  HB 115. He  opposed restructuring the  PF and                                                                    
creating  an income  tax. He  thought the  bill would  cause                                                                    
more   hardship  on   working  Alaskans.   He  thought   the                                                                    
representatives  needed  to  work  towards  stabilizing  the                                                                    
economy by  controlling state spending.  He did not  want to                                                                    
see the PF decimated. He  read from the Alaska Constitution.                                                                    
He urged members to put the  decision to use the PF earnings                                                                    
to a vote of the people.                                                                                                        
                                                                                                                                
6:23:11 PM                                                                                                                    
                                                                                                                                
DAVID PARISH,  SELF, JUNEAU  (via teleconference),  spoke in                                                                    
favor of HB 115. He  thought there was a suitable compromise                                                                    
that would  provide a good  education to  his grandchildren,                                                                    
provide  street  maintenance,   and  continue  stable  ferry                                                                    
service on  the Alaska  Marine Highway System.  He mentioned                                                                    
other  programs  and entities  that  he  would like  to  see                                                                    
preserved. He  thought HB  115 was the  first step  toward a                                                                    
solution.                                                                                                                       
                                                                                                                                
6:25:19 PM                                                                                                                    
                                                                                                                                
WILLIAM   DEATON,   SELF,  CORDOVA   (via   teleconference),                                                                    
approved  of cutting  education  because,  as a  15-year-old                                                                    
boy, he was  capable of learning on his own.  He was against                                                                    
funding  Planned Parenthood,  as they  did not  provide pre-                                                                    
natal care. He  spoke in opposition of HB  115 and supported                                                                    
Senator Dunleavey's  plan. He also  encouraged more  cuts to                                                                    
the budget. He suggested putting any  changes to the PF to a                                                                    
vote of the people. He opposed HB 115.                                                                                          
                                                                                                                                
6:27:34 PM                                                                                                                    
                                                                                                                                
MARY NANUWAK, SELF, BETHEL   (via   teleconference),   spoke                                                                    
against  HB   115.  She  did   not  like  that   the  Alaska                                                                    
Legislature did  not want to  hear from  Alaska's indigenous                                                                    
people. She did not approve  of multiple topics in the bill.                                                                    
She maintained that  original Alaskans should have  a say in                                                                    
any decisions  being made about  the affairs of  Alaska. She                                                                    
noted the difficulty  of small villages being  able to speak                                                                    
to the legislature. She urged  members to consider children,                                                                    
elders, and people without money.                                                                                               
                                                                                                                                
6:33:09 PM                                                                                                                    
                                                                                                                                
ROSS BIELING, SELF,      ANCHORAGE   (via   teleconference),                                                                    
spoke  against  HB  115. He  reported  that  gross  spending                                                                    
investment dropped for those states  that had implemented an                                                                    
income tax.  He thought  that the  capital gains  portion of                                                                    
the  bill would  definitely  scare off  investors. He  noted                                                                    
some of the other  challenges including healthcare costs. He                                                                    
did not believe that HB 115 was the way to get things done.                                                                     
                                                                                                                                
6:35:53 PM                                                                                                                    
                                                                                                                                
ED MARTIN, SELF, COOPER  LANDING (via teleconference), spoke                                                                    
in opposition to HB 115. He  provided a quote from the first                                                                    
United States  President, Thomas  Jefferson. He  spoke about                                                                    
the use of  the PF and about protecting the  PFD. He thought                                                                    
it was necessary to generate  new wealth for the citizens of                                                                    
Alaska. He  mentioned a homestead  that had  been subdivided                                                                    
and a program  called the Alaska Land  Voucher. He expressed                                                                    
concerns  about adding  50  more people  to  the payroll  to                                                                    
administer a  state income tax.  He observed that  the state                                                                    
had  a  serious  problem  with   just  paying  for  what  it                                                                    
currently had.  He urged members  to look  for opportunities                                                                    
to create new wealth.                                                                                                           
                                                                                                                                
6:40:40 PM                                                                                                                    
                                                                                                                                
EVAN EADS, SELF, FAIRBANKS  (via teleconference), was unsure                                                                    
if he approved of the  entire bill, although he supported an                                                                    
income  tax. He  spoke to  some of  the history  of a  state                                                                    
income tax  under Governor Hammond's administration.  He did                                                                    
not approve of out-of-state  workers not contributing to the                                                                    
state budget.  He suggested implementing an  income tax that                                                                    
was  capped for  residents of  Alaska at  the amount  of the                                                                    
dividend. He thanked the committee members for their time.                                                                      
                                                                                                                                
Co-Chair  Seaton reported  having  to go  to a  subcommittee                                                                    
finance meeting and thanked everyone who testified.                                                                             
                                                                                                                                
HB  115  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster  reviewed  the  agenda  for  the  following                                                                    
Monday.                                                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
HB 115 Support Documents PKT 1 2.16.17.pdf HFIN 2/17/2017 1:30:00 PM
HB 115
HB 115 Opposition lettersPKT 2 2.16.17.pdf HFIN 2/17/2017 1:30:00 PM
HB 115
HB 115 Opposition Documents PKT 3 2.17.17.pdf HFIN 2/17/2017 1:30:00 PM
HB 115
HB 115 Support Documents PKT 2 2.17.17.pdf HFIN 2/17/2017 1:30:00 PM
HB 115
HB 115 Supporting Doc An Introduction to Alaska Income Tax OptionsIssues Hanson.pdf HFIN 2/17/2017 1:30:00 PM
HB 115