Legislature(2017 - 2018)HOUSE FINANCE 519
03/29/2017 01:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB115 | |
| Public Testimony: Anchorage, Fairbanks, Juneau, Offnets | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 115 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 29, 2017
1:10 p.m.
1:10:20 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:10 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Steve Thompson
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO, PRESENT
Christine Niemi, Self, Juneau; Ron Pagenkopf, Self, Juneau;
Ron Somerville, Self, Juneau; Alexander Hoke, Self, Juneau;
Kate Blair, Tesoro, Juneau; Judy Andree, League of Women
Voters, Juneau; Bob Sylvester, Self, Juneau; Sally
Donaldson, Self, Juneau; Roy Fulwiler, Self, Juneau; Aimee
Kniaziowski, City of Kodiak, Kodiak; Rich Walker, City of
Kodiak, Juneau; Kathie Wasserman, Alaska Municipal League,
Anchorage; John Sonin, Civilized Humanity, Juneau.
PRESENT VIA TELECONFERENCE
Justin Vanzant, Self, Anchorage; Douglass Blattmachr, Self,
Anchorage; Bob Pawlowski, Self, Anchorage; Janet McCabe,
Self, Anchorage; Orin Seybert, Self, Anchorage; Mike Coons,
Self, Palmer; Dave Hanson, Self, Anchorage; Peter
Caltagirone, Self, Anchorage; Zacharrah Yates, Self,
Fairbanks; Libby Dalton, Self, Fairbanks; Cris Eichenlaub,
Self, Eagle River; Debbie Joslin, Self, Delta Junction;
Ruth Bueneman, Self, Fairbanks; Shelby Standley, Self,
Anchorage; Claire Steffens, Self, Anchorage; Patrick
Balton, Self, Delta Junction; Wayne Todd, Self, Anchorage;
Mary Geddes, Self, Anchorage; Bob Batrra, Self, Anchorage;
John Blaine, Self, Anchorage; Helen Nienhueser, Self,
Anchorage; Cheryl Keepers, Self, Fairbanks; Lynette Clark,
Self, Fairbanks; David Scott, Self, Auke Bay; Erika Wolter,
Self, Anchorage; Robin Smith, Self, Anchorage; Janie
Taylor, Self, Anchorage; Donald Crandall, Self, Anchorage;
Ronald Yarnell, Self, Fairbanks; Dan Donkel, Donkel Oil and
Gas LLC, Orlando, FL; Lynn McCabe, Self, Big Lake; Karen
Perry, Self, Chugiak; Brandy Dixon, Self, Anchorage;
Kathryn Andrews, Self, Anchor Point; Pamela Samash, Self,
Nenana; Paul D. Kendall, Self, Anchorage; Deanna James,
Self, Anchorage; Sara Aldwell, Self, Douglas; Mark Carr,
Self, Anchorage; Mark Richards, Self, Fairbanks; Elizabeth
Newell, Self, Anchorage; Martha Artz, Self, Wasilla; Amy
Hosea, Self, Delta Junction; Jeremy Price, Americans For
Prosperity, Anchorage; Paul Verhagen, Self, Nenana; Janet
Coffin, Self, Juneau; Byron Charles, Self, Ketchikan;
Conrad Muller, Self, Juneau; Pat Fox, Self, Fairbanks;
Roselynn Cacy, Self, Anchorage; Laura Bomner, Self,
Anchorage; Peter Mjos, Self, Anchorage; Julian Mason, Self,
Anchorage; Donald Frederick, Self, Anchorage; Wolfgang
Falke, Self, Fairbanks; Kristi Sherman, Self, Fairbanks;
Molly Sherman, Self, Fairbanks; B.A. Sherman, Self,
Fairbanks; Patrice Lee, Self, Fairbanks; Amie Verhagen,
Self, Nenana; Terry Reed, Self, Homer; Michael Bucy, Self,
Juneau; Michael Hanzuk, Self, Anchorage; Mike Swain, Self,
Anchorage; Evelyn Verhagen, Self, Nenana.
SUMMARY
HB 115 INCOME TAX; PFD CREDIT; PERM FUND INCOME
HB 115 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster addressed the meeting agenda.
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."
1:12:25 PM
^PUBLIC TESTIMONY: ANCHORAGE, FAIRBANKS, JUNEAU, OFFNETS
1:12:39 PM
CHRISTINE NIEMI, SELF, JUNEAU, spoke in support of the bill
and the income tax included in the bill on behalf of
herself and her husband. She recalled when an income tax
had existed in the 1980s. She appreciated the services
provided to Alaskans and believed they needed to continue.
She wanted her income tax and Permanent Fund Dividend (PFD)
to go towards services and not oil companies.
1:14:59 PM
RON PAGENKOPF, SELF, JUNEAU, spoke against the legislation.
He recalled when the state budget exceeded $100 million and
former Governor Bill Egan had been upset about that. He
shared that he and his wife had moved to the state over 50
years earlier. He spoke to his background in economics and
finance. He was concerned that the state was overreacting
to its financial situation. He explained that once an
income tax was implemented it would be almost impossible to
remove the tax even when revenue came in elsewhere. He
spoke to potential new oil coming online in the future. He
did not endorse a state income tax. He continued that the
state had $58.5 billion in Permanent Fund assets, much of
which was untouchable by constitution. He continued to
speak about the Permanent Fund amount. He spoke to
financial institutions return on investment. With a 5
percent rate of return the principal would remain constant.
Historically the fund had done well at an 8.22 percent
return. He spoke to use of the principal and money it would
generate.
1:21:44 PM
AT EASE
1:22:12 PM
RECONVENED
Mr. Pagenkopf believed the citizens of Alaska should have
longer than 2 minutes to speak.
Co-Chair Foster shared that the committee wanted to be able
to give everyone time to testify. He offered the email
address as another option.
RON SOMERVILLE, SELF, JUNEAU, spoke against the bill. He
shared that he worked with numerous seniors in the
community and he was concerned that costs would be pushed
to them. He stressed that the state could not afford its
current level of government. He thought it was unbelievable
what was expected for every individual to pitch in. He
discussed the elimination of some senior tax exemptions. He
underscored that some seniors would be forced to leave the
state due to high costs. He urged the committee to consider
that individuals on fixed income only had a limited amount
of discretionary income. He discussed it was cheaper to get
goods from out of state than from businesses in the
community. He asked the legislature to put a sunset date on
the income tax if it was implemented. He understood the
legislature had a difficult job.
1:27:11 PM
JUSTIN VANZANT, SELF, ANCHORAGE (via teleconference),
testified in support of an income tax at a maximum of 2
percent and the use of the Permanent Fund to support the
state. He spoke on behalf of himself and his family. He
requested a cap on the time on the implementation of the
bill in order for it to be reconsidered and voted on again
in the future. He shared that he was the sole income
provider for his family that included his wife and four
daughters. He communicated that he had worked in the oil
and gas industry. He shared that he had to purchase part of
his household goods on Amazon due to the high cost of goods
in Alaska. He reiterated his support for an income tax
capped at 2 percent and a time cap.
Co-Chair Seaton shared that a family of six would not pay
any income tax up to $50,000. He wondered whether Mr.
Vanzant was aware of that provision.
Mr. Vanzant replied that he understood and would still
accept a 2 percent income tax on his family.
Co-Chair Foster announced that the proposed income tax in
Alaska would be the fourth lowest in the country.
1:32:58 PM
DOUGLASS BLATTMACHR, SELF, ANCHORAGE (via teleconference),
felt that there were some drafting errors in the taxing of
the non-resident trust. He remarked that the definition of
resident trust included all trusts. He noted that Section
43.22.150 stated that a "trust consisting of property that
is or will be disposed or administered in the state", which
he felt were all trusts which had assets. He remarked that
taxation of non-resident trust would eliminate the trust
industry in Alaska. He felt that all the non-resident
trusts would go to other states that did not have an income
tax. He stated that there were 18 states who had adopted
similar legislation as Alaska, but Alaska, Delaware,
Nevada, were considered the best states for trusts. He
stressed that the state would lose the 14 jobs in the
state, and many attorneys, insurance agents, stock brokers,
and CPAs.
Co-Chair Seaton asked if there were 14 jobs with trusts in
Alaska, or only with the company.
Mr. Blattmachr answered there were 14 positions in his
business. He did not know about other institutions.
Co-Chair Seaton spoke to the investments held. He asked if
they were Alaskan investments.
Mr. Blattmachr replied that most were not Alaskan
investments.
1:37:05 PM
BOB PAWLOWSKI, SELF, ANCHORAGE (via teleconference),
thanked the bill sponsors for restructuring the Permanent
Fund, but he had a concern about the income tax component
of the bill. He spoke about senior exemptions. He asked the
committee to consider seniors who were beyond their earning
potential. He addressed what an income tax could do to
military retirees. He felt an income tax would cause
individuals to leave the state.
1:40:25 PM
JANET MCCABE, SELF, ANCHORAGE (via teleconference),
testified in favor of the bill, which she and her husband
believed was a balanced, fair, and effective approach
towards filling the budget gap. She spoke to the importance
of a stable structure. She believed the income tax was
correct in the bill. Additionally, the Permanent Fund
portion was right.
1:42:14 PM
ORIN SEYBERT, SELF, ANCHORAGE (via teleconference),
supported the legislation. He stated that no one was
talking about touching the corpus of the Permanent Fund. He
believed the state could rely on living on the earnings
reserve portion. He shared he would adamantly oppose use of
the principal.
1:44:35 PM
Co-Chair Foster shared that individuals could listen in at
various locations.
MIKE COONS, SELF, PALMER (via teleconference), testified
against the legislation. He stated that the income tax
would hit him at about $1,000. He shared that seniors and
working lower income individuals would be the hardest hit.
The ones hurt the most would be hit the hardest. He
discussed that former President Obama, Bernie Sanders and
others were all for redistribution of wealth. He was
against the bill.
1:48:10 PM
DAVE HANSON, SELF, ANCHORAGE (via teleconference), strongly
supported the bill. He identified himself as a fiscal
conservative. He believed it was time for everyone to pay
their fair share. He recalled that the state had an income
tax in the past that had been as high as 16 percent. He
believed it was needed again. He believed a $1,000 cap on
the dividend made more sense than getting $1,200. He shared
that no one had complained when the dividend had been under
$1,000. He discussed that 43 states already had income
taxes; six of the states without income taxes had high
sales taxes. He reiterated his support of the bill.
1:51:34 PM
PETER CALTAGIRONE, SELF, ANCHORAGE (via teleconference),
shared that he had moved to Alaska one year earlier. He had
lived in a location that had a high sales tax and an income
tax. He believed it seemed to be a no-brainer to use
Permanent Fund earnings and then implement an income tax.
He stated that a portion of a dividend would be eaten up by
the income tax, which he found confusing. He spoke to bill
language related to capital gains that he found unclear.
1:53:44 PM
ZACHARRAH YATES, SELF, FAIRBANKS (via teleconference),
spoke in strong opposition to the bill. He remarked that it
was not a matter of state programs were needed, it was more
of a matter of what the state could afford. He remarked
that the country had recently voted Donald Trump into
office because of a desire for smaller government. He
discussed ways his family had cut back on spending in
recent years in order to afford heating oil and taxes. He
shared he had paid $16,000 on land tax the past year, which
was an extraordinary amount. He believed the Democrats had
not made a single cut in the budget. He spoke in support of
more cuts.
1:56:19 PM
LIBBY DALTON, SELF, FAIRBANKS (via teleconference),
strongly opposed a state income tax. She shared that state
operating costs had grown an average of 8 percent annually
over the past decade. She believed the answer to the
problem was simple - the state had a spending problem. She
stressed that the legislature was already capping the PFD,
which would hurt the economy and limit spending. She
believed state government was bloated. She suggested using
// savings to help bridge the budget gap. She wanted to a
cap to prevent runaway spending. She asked the committee to
protect the PFD and the earnings reserve account. She asked
the committee to improve the budget process by establishing
a committee from both sides of the aisle to work with the
governor on a budget over the interim. She stressed that
she paid property and federal income taxes. She wanted the
legislature to come up with a better solution to the budget
gap.
Vice-Chair Gara appreciated the testimony. He shared that
the bill would impose no income tax on a couple making
$30,000 annually.
2:00:14 PM
ALEXANDER HOKE, SELF, JUNEAU, discussed that the dividend
program had been created in 1980. He was concerned that
many people seemed prepared to bargain away their dividend;
however, it meant they were bargaining away the dividend
for future generations as well. He believed the problem
resided in a budget that had been developed during high oil
prices. He was concerned that the ratio of sharing between
the people and the government was a one-third/two-third
arrangement. He hoped the ratio could be reversed in future
years where two-thirds of the revenue would go to the
people. He believed the Percent of Market Value (POMV) draw
was too aggressive. He spoke to erring on the side of
caution and protecting the Permanent Fund. He was also
concerned that the state would be obliged to withhold a
portion of a person's dividend - he believed there was a
time conflict.
Co-Chair Seaton clarified that if person wanted to apply
the dividend to their payment it was optional. He compared
the option to Pick, Click, Give.
Mr. Hoke understood the issue.
2:04:46 PM
KATE BLAIR, TESORO, JUNEAU, shared information about the
company. She pointed to a flaw in the bill related to
withholding in non-investment partners. She provided detail
about how the provision could impact the company. She spoke
to the unduly burdensome provision. She shared that most of
the units were held by brokers; the PTP had no way of
determining who the unit holders were. Withholding was
calculated on an interim basis; there was no way to know
how to determine the amount. She supported an exemption for
PTPs as was done in Idaho and Illinois.
Representative Wilson asked if it was handled in other
states.
Ms. Blair shared that the exemption was straight forward in
Illinois and applied to every partnership other than a PTP.
She stressed that Idaho was different - withholdings were
exempted. She stated that if a unit withheld more than $500
it was reported back to the state.
Co-Chair Seaton asked Ms. Blair to provide her written
comments.
2:09:53 PM
JUDY ANDREE, LEAGUE OF WOMEN VOTERS, JUNEAU, spoke in
strong support of the legislation. The league supported the
progressive income tax that did not have an undue burden on
low income families. The league did not support further
cuts at the time due to the $3 billion in cuts that had
already been made. The league did not support further cuts
to education. She and her husband also personally supported
the bill.
2:11:49 PM
CRIS EICHENLAUB, SELF, EAGLE RIVER (via teleconference),
spoke against the legislation. He believed the bill raided
the Permanent Fund. He recalled that in 2000 the
legislature had tried to buy residents out by offering a
$25k payout. He asked about the fuel savings. He thought
there was plenty of time for people to weigh in on the use
of the PF. He opposed HB 115. He thanked the committee.
2:14:25 PM
DEBBIE JOSLIN, SELF, DELTA JUNCTION (via teleconference),
opposed HB 115. She had been a resident of Alaska for 28
years. She was a real estate broker and had seen several
people leave. She did not feel enough reductions had been
made. She did not think it was necessary to initiate a
complicated income tax. She opined that folks would not be
able to stay in the state.
2:16:44 PM
RUTH BUENEMAN, SELF, FAIRBANKS (via teleconference),
opposed HB 115. She had been in Alaska since 1975. She
queried amount of the PFD for 2017.
Co-Chair Foster relayed that the amount had been determined
and would not until the fall sometime.
Ms. Bueneman continued to provide her testimony. She
understood there were a couple of ways to balance the
budget. She was most concerned with people that would be
affected the most. She did not believe using the Permanent
Fund to run government had not been the intent.
Co-Chair Foster relayed that if the bill passed the PFD
would be $1,250 in the current year.
2:20:28 PM
SHELBY STANDLEY, SELF, ANCHORAGE (via teleconference),
spoke against the bill. He believed there were many other
solutions to fill the spending gap. He spoke to the large
budget of the Anchorage School District. He suggested a 1
percent property tax increase in Anchorage and still be
less than other locations. He explained a similar tax had
funded much of the education system in Houston, Texas where
he had previously lived. One of the reasons he had moved to
Alaska was due to the lack of a sales and income tax. He
did not have a strong opinion about the PFD because he did
not think it was a large long-term economic stimulus.
2:24:26 PM
CLAIRE STEFFENS, SELF, ANCHORAGE (via teleconference), she
was disappointed in the operating budget process where cuts
had not been made. She believed the bill taxed merely to
raise money. She stated that heaping money on Alaska's
schools had not been successful. She believed the
education's success was pitiful. She believed the value of
the Permanent Fund would be eroded if the funds were used.
She was opposed to the electronic filing component. She
believed there had been numerous ways to cut the budget,
but the Democrats had not wanted to do so. She spoke to
cost savings. She asked the committee to vote no on the
bill. She believed the legislature did not listen to the
public.
2:28:58 PM
PATRICK BALTON, SELF, DELTA JUNCTION (via teleconference),
spoke against the legislation. He shared that he ran a
small business in Alaska. He was opposed to income taxes,
which he believed penalized productivity. He spoke to cuts
to government that did not have a multiplier effect. He
stated that Alaska ranked the highest in government
spending. He believed government was too large. He was
opposed to the income tax. He believed there should be a
cap on government spending.
2:32:07 PM
WAYNE TODD, SELF, ANCHORAGE (via teleconference), testified
in strong support of the legislation or any bill that
resulted in restructuring the Permanent Fund and
implementing a state income tax. He stressed the more that
was cut the deeper and longer the recession would be. He
stated that PFD restructuring would allow all Alaskans to
pitch in. He spoke against further cuts. He believed the
bill should be passed immediately.
2:34:22 PM
MARY GEDDES, SELF, ANCHORAGE (via teleconference),
testified in favor of the bill. She supported a cap on the
PFD, but believed it should be lower. She supported
changing the time of the PFD program residency
requirements. She was in favor of the reinstitution of a
state income tax. She believed an income tax was necessary
to maintain essential services such as roads, schools, and
other. She spoke to a budget that had been approved by the
House that would cut over $300 million more. She stressed
the cuts were substantial. She believed further cuts would
harm public safety.
2:37:06 PM
BOB BATRRA, SELF, ANCHORAGE (via teleconference), spoke in
strong support of an income tax. He believed it would
provide a stable income stream. He thought that people
actively invested in government would be more likely to
participate. He supported flexibility if conditions changed
in the future. He believed it was a good deal for Alaskans
where 25 percent would be paid by non-residents.
2:38:49 PM
JOHN BLAINE, SELF, ANCHORAGE (via teleconference),
testified in support of the bill. He shared that he and his
family had been fortunate to use the dividend to help pay
for college for their sons. He relayed that for many
individuals the dividend helped pay rent, for food, and
other important items. He shared that cuts had been made to
the dividend the previous year, which he believed was
wrong. He believed a graduated income tax would mean
Alaskans would have skin in the game. He spoke to
legislators who were financially dependent on the oil
industry for work. He believed it was a conflict of
interest that should be changed. He spoke to an improved
educational system and society in Alaska.
2:41:58 PM
HELEN NIENHUESER, SELF, ANCHORAGE (via teleconference),
testified in support of the bill. She supported the income
tax because they had three granddaughters who loved it in
Alaska. She stressed the girls wanted to live in Alaska,
but could only do so if jobs were available. She tried to
understand why Alaskans would not support an income tax.
She provided her thoughts on the matter. She did not
support much deeper cuts.
2:44:57 PM
BOB SYLVESTER, SELF, JUNEAU, supported the bill in general;
however, he hoped the dividend amount could be maintained
as high as possible. He recognized that many people used it
as disposable income; however, others relied on it. He
believed a tax would mean people would have skin in the
game.
2:46:31 PM
SALLY DONALDSON, SELF, JUNEAU, testified in support of the
legislation. She recognized the committee's hard work. She
did not support further cuts to the budget. She noted that
the budget had been severely cut since 2013. She hoped
education was not cut further. She believed the income tax
in the legislation was very reasonable.
2:48:06 PM
ROY FULWILER, SELF, JUNEAU, testified in support of the
bill. He supported the senior tax exemption. He shared that
he lived next to his daughter and granddaughter. He gave a
personal story about walking with his granddaughter to
school. He did not believe the income tax in the bill would
harm him. He spoke to his limited life savings that would
not be impacted.
2:50:38 PM
AIMEE KNIAZIOWSKI, CITY OF KODIAK, KODIAK, testified in
support of the bill and a sustainable comprehensive budget
solution. She was fully in support of an income tax and
capping the PFD to fund state services. She thanked the
committee for its time.
Vice-Chair Gara asked if Ms. Kniaziowski was testifying on
behalf of the City of Kodiak.
Ms. Kniaziowski replied she was testifying on behalf of the
City of Kodiak and herself.
Vice-Chair Gara asked if the City of Kodiak had taken a
position on the bill.
Ms. Kniaziowski answered that she believed the City of
Kodiak supported a sustainable budget plan.
2:52:49 PM
CHERYL KEEPERS, SELF, FAIRBANKS (via teleconference),
testified in favor of the legislation. She believed the
budget had been sufficiently cut. She did not want the
economy to go into further recession. She spoke to impacts
on the university. She believed it was important to take
advantage of Permanent Fund earnings. She was unsure about
the impact on federal taxes.
2:55:11 PM
LYNETTE CLARK, SELF, FAIRBANKS (via teleconference), did
not support the bill. She believed it was the governor's
bill and thought it the administration represented a trail
of lies. She was opposed to the entire bill. She did not
believe an income tax was the answer to the state's budget
problems. She believed further cuts were necessary. She
believed the legislature needed to address shipping costs
legislators could have paid for by the state - she referred
to a recent case that she called "shipping gate." She
thought more cuts could be made.
2:58:55 PM
DAVID SCOTT, SELF, AUKE BAY (via teleconference), spoke in
favor of HB 115. He was a 68-year resident of Alaska. He
appreciated all of the work the legislature had done.
3:00:24 PM
ERIKA WOLTER, SELF, ANCHORAGE (via teleconference),
supported HB 115. She thought she was a fiscal
conservative. However, she believed the state had cut
enough. She preferred a sales tax as opposed to an income
tax. She also spoke to additional sideboards for qualifying
to receive a PFD.
3:02:10 PM
ROBIN SMITH, SELF, ANCHORAGE (via teleconference),
supported HB 115. She spoke in favor of an individual
income tax. She was a business owner and was starting to
experience the effects of the recession. She favored
funding education which is why she was amenable to an
income tax. She advocated a fiscal plan. She thanked the
committee.
3:04:45 PM
JANIE TAYLOR, SELF, ANCHORAGE (via teleconference), spoke
in favor of HB 115.
3:06:19 PM
DONALD CRANDALL, SELF, ANCHORAGE (via teleconference),
supported HB 115. He had some concerns with the 4.75
percent draw. He wanted to ensure that PF was properly
inflation-proofed. He spoke in support of an income tax. He
thought several budget cuts had already been made. He
opposed additional cuts to education which was a
responsibility that legislators should take seriously. He
thanked the committee for its time.
Co-Chair Foster shared that the public could submit their
testimony in writing.
3:09:38 PM
RICH WALKER, CITY OF KODIAK, JUNEAU, spoke in support of HB
115. He reported that the City of Kodiak had supported a
fiscal plan. He suggested an income tax that followed the
federal income tax. He also thought the legislature's
attempt to continue issuing a PFD. He noted the large size
of Alaska and the hardships associated with living in rural
Alaska. He thought taking action was important. He invited
members to come to Kodiak for a visit some time.
3:12:19 PM
RONALD YARNELL, SELF, FAIRBANKS (via teleconference), spoke
in support of HB 115. He thanked the committee for its
time.
3:13:07 PM
DAN DONKEL, DONKEL OIL AND GAS LLC, ORLANDO, FL (via
teleconference), spoke about the oil industry. He thanked
members for trying to lead the state into a better
financial situation. He suggested members take a look at
the oil and gas agency. He really believed that Alaska was
driving out investment. He talked about working on getting
some lease extensions. He urged members to encourage
production. [He did not report on HB 115].
Co-Chair Foster clarified that in the meeting was the
public testimony for HB 115, and felt that Mr. Donkel's
testimony was in reference to HB 111.
Mr. Donkel elaborated that additional production would make
it possible to not tax the system. He felt that the system
blocked the additional production. He praised Vice-Chair
Gara for his commitment.
3:17:56 PM
LYNN MCCABE, SELF, BIG LAKE (via teleconference), opposed
HB 115. She thought additional spending reductions were
needed. She urged members to encourage development. She did
not believe actual cuts had occurred. She referred to the
governor's pipe dream. She asserted that education funding
was bloated. She suggested that if the members could not
make specific cuts, they could apply a percentage
reduction.
3:22:29 PM
KAREN PERRY, SELF, CHUGIAK (via teleconference), spoke
against HB 115. She thought the people of Alaska was better
at spending the state's money than the legislature. She
accused the legislature of stealing from the people of
Alaska. She asserted that government needed to stop
spending. She encouraged the growth of the economy. She
continued to accuse the government stealing the people's
money. She quoted an Alaskan She strongly opposed HB 115.
***
3:26:32 PM
BRANDY DIXON, SELF, ANCHORAGE (via teleconference), opposed
HB 115. She was a business owner, and felt that she would
need to pass extra costs to her customers.
3:27:43 PM
KATHRYN ANDREWS, SELF, ANCHOR POINT (via teleconference),
opposed HB 115. She felt that adding an income tax would do
damage to the economy. She suggested getting rid of the
nonessentials. She did not believe enough cuts had been
made and that that should be addressed before taxing the
people. She thanked the committee for its time.
3:31:18 PM
PAMELA SAMASH, SELF, NENANA (via teleconference), spoke in
opposition of HB 115. She did not feel the House had worked
hard enough on compromise. She believed taxes should be the
last resort.
3:33:04 PM
PAUL D. KENDALL, SELF, ANCHORAGE (via teleconference),
spoke in opposition of HB 115. He expressed various
concerns. He referenced an article from an Oklahoma
newspaper regarding a home invasion. He mentioned an
intellectual steal. He continued to provide various
opinions. He encouraged the legislature moving to
Anchorage. People needed to gather together to decide the
direction of the state. He continued to mention various
items not related to the bill.
3:38:13 PM
DEANNA JAMES, SELF, ANCHORAGE (via teleconference), spoke
in favor of a flat tax but discouraged touching the PFD.
She thanked the committee for considering a flat tax.
3:39:59 PM
SARA ALDWELL, SELF, DOUGLAS (via teleconference), supported
HB 115. She spoke of some of her family members attending
the university. She also spoke of the increased burden on
state workers as result of various cuts. She encouraged an
income tax. She was very willing to pay an income tax. She
did not what the state beholden to the oil companies and if
an income tax helped with that she would support of it.
3:43:01 PM
MARK CARR, SELF, ANCHORAGE (via teleconference), supported
HB 115. He was a small business owner. He thought an income
tax was fair and progressive. He liked the idea that out of
state workers would be paying a tax. He noted that times
had changed, and that people needed to start contributing.
He appreciated members' efforts.
3:44:48 PM
MARK RICHARDS, SELF, FAIRBANKS (via teleconference),
opposed the legislation. He wanted more individual freedom
and less government involvement. He was a government
employee. He reported a gentleman on the radio who had lots
of great ideas, Bob Gillam. He encouraged members to take a
look at Mr. Gillam's idea. He thanked the committee.
3:47:10 PM
ELIZABETH NEWELL, SELF, ANCHORAGE (via teleconference),
supported HB !!%. She was a self-employed science fiction
writer. She supported a state income tax. It placed a hard
link between the economy and the government. She thought
Alaska was one of the only tax without an income tax. She
thought investment was necessary. She thanked members.
3:49:34 PM
MARTHA ARTZ, SELF, WASILLA (via teleconference), spoke in
opposition of HB 115. She indicated she was aware of the
problems of the state. She asked the legislature to stop
spending. She believed in a state sales tax and a sin tax
and a tax on luxury items. She thanked members for their
time.
3:51:47 PM
AMY HOSEA, SELF, DELTA JUNCTION (via teleconference),
opposed HB 115. She suggested the use of a lottery. She
spoke to the expense of living in Delta Junction and
reported needing all of the income possible.
3:53:05 PM
JEREMY PRICE, AMERICANS FOR PROSPERITY, ANCHORAGE (via
teleconference), spoke in opposition of HB 115. He came
from a line of self-employed business owner. He thought a
spending cap was a good idea. He referred to some of the
history of a spending cap.
3:55:26 PM
PAUL VERHAGEN, SELF, NENANA (via teleconference), opposed
HB 115. He believed that reductions to government spending
was necessary. He voiced concerns of thousands of people
moving away from the state. He opposed HB 115.
3:57:03 PM
3:57:54 PM
JANET COFFIN, SELF, JUNEAU (via teleconference), opposed
the legislation. She spoke of the legislature wasting money
with special session. She thought the tax was outrageous.
She opposed HB 115.
3:59:15 PM
KATHIE WASSERMAN, ALASKA MUNICIPAL LEAGUE, ANCHORAGE, spoke
in favor of HB 115. She reported that the membership was
happy with the legislation being offered. She supplied a
list of items the league recommended to the legislatures.
The league did not believe that just one thing could be
done to solve the whole problem.
4:01:54 PM
BYRON CHARLES, SELF, KETCHIKAN (via teleconference), He
reported that he had supplied a document to members. He had
just spoken to the attorney general of Alaska. He noted
Alaska had made $2.2 billion. He was 65 years old.
Co-Chair Seaton asked the testifier to submit further
comments to the committee.
4:05:59 PM
CONRAD MULLER, SELF, JUNEAU (via teleconference), favored
HB 115. He thanked members for the work put into the bill.
He was glad to see a progressive income tax. He spoke of
the detriments of a sales tax. He liked the idea of
collecting taxes for those who work in Alaska but live
outside of it.
4:07:38 PM
PAT FOX, SELF, FAIRBANKS (via teleconference), supported HB
115. However, she was concerned with all of the give-a-
ways. She was a senior citizen. She thought a sales tax was
good. She encouraged people to stop giving away Alaska's
resources. She ran her own business and had not been given
anything to help her business. She thanked the committee.
4:10:08 PM
ROSELYNN CACY, SELF, ANCHORAGE (via teleconference), asked
about the sign for the Anchorage Legislative Information
Office. She opposed HB 114. She asked the legislature not
to change the PF. She thought the PFD existed to keep the
fund permanent. She suggested a 1 percent income tax. It
would be simpler than the tax proposed in HB 115.
4:13:18 PM
LAURA BOMNER, SELF, ANCHORAGE (via teleconference),
testified in support of the legislation. She believed the
restructuring of the PFD would help to maintain the
dividend into the future. She stated an income tax could
help fund infrastructure and other. She would not support a
sales tax, which she believed should be reserved for local
governments. She favored the bill over the Senate bill SB
26. She stressed a fiscal plan included an income tax,
restructuring the PFD, and passing HB 111 that would reduce
oil credits.
4:16:06 PM
PETER MJOS, SELF, ANCHORAGE (via teleconference), testified
in support of the bill. He relayed that many individuals
had left Alaska. He believed the proposed $750 million cuts
would result in significant job loss. He had recently been
in California that had numerous taxes and was a vibrant
state. He asked the legislature to implement the tax.
4:19:06 PM
JULIAN MASON, SELF, ANCHORAGE (via teleconference), did not
support the legislation; however, he did not object to an
income tax or a restructuring of the Permanent Fund. He
thought all Alaskans should pay the same rate. He spoke to
a new way to tax that was in the trust provision that he
believed was messed up.
Vice-Chair Gara asked Mr. Mason to provide ideas on the
provision.
Mr. Mason recommended removing the provision.
4:21:33 PM
DONALD FREDERICK, SELF, ANCHORAGE (via teleconference),
spoke to seniors paying federal income tax on social
security. He shared that if the state enacted an income tax
that seniors would be negatively affected. He shared that
most states did not charge taxes on retirement income or
military He suggested reduced spending and reduced
Permanent Fund checks. He was tired for paying for the lazy
and greedy.
4:24:17 PM
WOLFGANG FALKE, SELF, FAIRBANKS (via teleconference),
opposed HB 115. He suggested that the decision be left to
the people and wanted to see it on the ballot. He provided
some of his background. He was a naturalized citizen of
Alaska.
4:26:37 PM
KRISTI SHERMAN, SELF, FAIRBANKS (via teleconference),
supported HB 115. She thought it was long overdue that
citizens of the state help out. She thought the bill was a
good start.
4:27:12 PM
MOLLY SHERMAN, SELF, FAIRBANKS (via teleconference),
supported HB 115. Alaskans needed to pay their share.
4:27:40 PM
B.A. SHERMAN, SELF, FAIRBANKS (via teleconference),
supported HB 115. She appreciated the opportunity to
testify.
4:28:16 PM
PATRICE LEE, SELF, FAIRBANKS (via teleconference), spoke in
support of HB 115. She did not want to see additional cuts
to the point of the decimation of various programs. She
used childcare as an example. She also wanted to see the
pupil teacher ratios remain small. She was willing to pitch
in. She thanked the committee.
4:30:09 PM
JOHN SONIN, CIVILIZED HUMANITY, JUNEAU, was in support of
HB 115. He thought maximizing the PFD distribution.
4:32:42 PM
AMIE VERHAGEN, SELF, NENANA (via teleconference), spoke in
strong opposition of HB 115. She did not feel the
legislature was making reasonable decisions. She thought
additional cuts were necessary. She thought spending would
continue. She urged the committee consider many ideas
instead of taking the easy way out. She provided several
examples. She asked members to work together. She noted
Alaska was one of the most expensive state in the nation.
She would not oppose an income tax, but not before other
measures were taken.
4:35:15 PM
TERRY REED, SELF, HOMER (via teleconference), spoke in
opposition of HB 115. She thought an income tax was the
last measure to take. She thought the legislature should
kick SB 21 to the curb and obtain additional revenues
through a different oil tax system. She encouraged
additional cuts.
Vice-Chair Gara encouraged her to stay tuned for more
debate on the oil tax bill HB 111.
4:37:01 PM
MICHAEL BUCY, SELF, JUNEAU (via teleconference), supported
HB 115. He listed several programs and services that he
wanted. He thought government was good when it was done
right. He used Canada as an example. He thought oil
companies had benefited more than Alaskans and the tax
system should change.
4:40:24 PM
MICHAEL HANZUK, SELF, ANCHORAGE (via teleconference),
staunchly opposed HB 115. He did not believe there had been
enough budget cutting measures taken in the session. He
thought tax implications and reductions to the PFD should
not take place before additional cuts were made. He thought
under no circumstance should an income tax be imposed and
encouraged a spending cap.
4:43:21 PM
MIKE SWAIN, SELF, ANCHORAGE (via teleconference), spoke in
opposition of HB 115. He wondered about the number of $750.
He appreciated the time.
4:45:03 PM
EVELYN VERHAGEN, SELF, NENANA (via teleconference), spoke
in opposition of HB 115. She encouraged looking for
wasteful spending. She thought taxes should be the
legislature's last resort. She had seen an increase in
government employee salaries. She wanted more
accountability from government workers. She thought
additional resources should be developed. She also
suggested increasing tourism into the winter months to see
Northern Lights. She thanked the chairman.
Co-Chair Foster relayed the agenda for the evening at which
time public testimony would continue to be heard for HB
115.
ADJOURNMENT
4:50:12 PM
The meeting was adjourned at 4:50 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 115 - Support Documents - Public Testimony (2) 3.29.17.pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB 115 - Opposition Documents - Public Testimony (2) 3.29.17.pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB115 Support 3.29.17 2.pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB115 Oppose 3.29.17 2.pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB115 Oppose 040417 3.pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB115 Support 040417 4.pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB115 - Opposing (040617).pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |
| HB115 - Supporting (040617).pdf |
HFIN 3/29/2017 1:00:00 PM |
HB 115 |