Legislature(2025 - 2026)ADAMS 519
02/05/2026 05:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB284 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 284 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 5, 2026
5:35 p.m.
5:35:06 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 5:35 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Elexie Moore
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Aimee Bushnell, Legislative Liaison, Department of Revenue;
Beth Weldon, Mayor, City and Borough of Juneau;
Representative DeLena Johnson; Representative Bill Elam.
PRESENT VIA TELECONFERENCE
Ken Huckeba, Self, Wasilla; Alex Wertheimer, Self, Juneau;
Chris Noel, Mayor, Denali Borough, Healy; Mike Milligan,
Self, Kodiak; Jila Stuart, Finance Director, Haines
Borough, Haines; Bryan Smith, Self, Anchorage; Sam Chanar,
Mayor, City of Toksook Bay, Toksook Bay; Elizabeth Bacom,
Self, Petersburg; Caroline Storm, Self, Anchorage; Theresa
Obermeyer, Self, Anchorage; Rita Trometter, Self, North
Pole; Tara Hutchinson, Self, Fairbanks; Kate Veh, Self,
Soldotna; Miguel Ramirez, Self, Fairbanks; Sandra West,
Self/Member, Kodiak Council, Kodiak; Laura Bonner, Self,
Anchorage; Glenda Ledford, Mayor, Wasilla; Randy Griffin,
Self, Fairbanks; James Akerelrea, President, Scammon Bay
Tribal Council, Scammon Bay; Roberta Murphy, Self, Emmonak;
Jacqueline Muehlbauer, Self, Fairbanks; Rozlyn Grady-Wyche,
Self, Anchorage; Barbara Haney, Self, North Pole; Rebecca
Logan, Self, Anchorage; Rebecca Braun, Self, Juneau; Lori
Strickler, Department Manager, City of Bethel; Leon Jaimes,
Self, Anchorage; Steven Toms, Self, Birchwood; Jim Hazlett,
Self, Wasilla; Doug Goering, Self, Fairbanks.
SUMMARY
HB 284 TAX COMPACT; SALES TAX; OIL & GAS TAX
HB 284 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 284
"An Act relating to the Multistate Tax Compact;
relating to apportionment of income to the state;
establishing a state sales and use tax; relating to
taxes levied by cities and boroughs; relating to the
corporate income tax; authorizing the Department of
Revenue to enter into the Streamlined Sales and Use
Tax Agreement or substantially similar agreement;
relating to the oil and gas production tax;
establishing an infrastructure maintenance surcharge
on oil; establishing a pipeline corridor maintenance
fund; and providing for an effective date."
5:37:02 PM
Co-Chair Foster explained there were three major parts of
the bill including sales, oil and gas, and corporate income
taxes. He planned to limit public testimony to the sales
tax portion of the bill in the current meeting. Public
testimony would be taken on the other components after the
committee had an opportunity to vet the other portions of
the bill.
Representative Allard remarked that the information put out
publicly communicated something different. She remarked
that the public had been told they could testify on the
entire bill.
Co-Chair Foster replied that he would ask individuals to
keep their comments limited to the sales tax portion of the
bill. He noted that the committee had a robust discussion
about the sales tax in the morning and afternoon meetings.
He stated that the committee had not yet addressed the
other two portions of the bill. There would be an
opportunity for public testimony on those portions later
on. He noted that the committee would take a break if the
committee finished with the listed testifiers. The
committee would wait to see if additional callers called
in. He provided the call in numbers and email address for
public testimony. asked to hear a recap of the sales tax
portion of the bill from the Department of Revenue.
5:40:47 PM
AIMEE BUSHNELL, LEGISLATIVE LIAISON, DEPARTMENT OF REVENUE,
relayed that HB 284 was one part of a larger fiscal plan
put forward by the governor for the legislature to
consider. The bill had three parts including the sales and
use tax, corporate income tax, and oil and gas production
tax. She limited her recap to the sales and use tax portion
of the bill. The bill would create a seasonal tax of 4
percent from April through September and 2 percent from
October through March. The bill would require sellers to
collect and remit the tax to the state and the state would
administer the tax and remit the proceeds back to the
municipalities. The municipalities would need to conform to
the state sales tax base and exemptions. Forty-five states
currently levied a sales and use tax and at 4 percent
Alaska would tie with five other states as the second
lowest rate. The intent was to have a very broad base that
applied to most consumer goods and services. She explained
that it was administratively simpler to start from an
assumption of taxability and a broad base allowed for a low
rate. The bill listed various exemptions to the sales tax
including jet fuel, healthcare services and related items,
internet access, sales or construction of real property,
and business-to-business transactions.
Co-Chair Foster repeated the call in number for the
meeting.
^PUBLIC TESTIMONY
5:43:11 PM
BETH WELDON, MAYOR, CITY AND BOROUGH OF JUNEAU, thanked the
committee for the opportunity to speak. The city
appreciated the governor for offering a fiscal plan. She
relayed that municipalities like Juneau had been urging the
state to address its long-term structural deficit for many
years and the governor's proposal was the first plan the
city had seen acknowledging the need for new revenue in
many years. The community had recently discussed sales tax
policy. During the recent local election voters approved
new exemptions for food and utilities. She detailed that
the vote demonstrated that residents were paying attention
to tax policy and that they valued having the ability to
make local decisions in local circumstances. She shared
that Juneau had long supported the idea that an income tax
was the fairest statewide revenue tool that asked residents
to contribute based on the ability to pay. Juneau also
understood the political realities facing the legislature.
She stated that if a sales tax was the only revenue measure
with a path forward, Juneau understood, but it would like
to see the legislature protect municipal authority and
respect existing decisions made by local voters.
Ms. Weldon flagged Juneau's concern about how the state
would handle enforcement. Juneau wanted to be part of the
solution. She detailed that local governments delivered
many of the frontline services Alaskans relied on daily
including public safety, roads, utilities, recreation, and
more. She stressed that a strong state and local
partnership was essential to any state sustainable fiscal
framework. The state had needs and Juneau had needs. She
stated that Juneau was ready to work with the
administration and the legislature to ensure that a revenue
package supported state stability and local autonomy.
5:45:41 PM
KEN HUCKEBA, SELF, WASILLA (via teleconference), opposed
the bill. He stated it was an extremely tone deaf state
government that could expand itself into such proportions
that much of the legislative work sought new revenue at
every turn. He remarked that thousands of oil industry jobs
had been lost in the past several months. He explained that
people were not being told how the economy was doing
fiscally in order to pay for revenue measures. He was a
retired energy industry employee and wondered who worried
about stability for the people or small businesses who paid
the bills. He stressed they had not heard how the workers
or retirees would pay for more taxes. He emphasized that a
sales tax coupled with a property tax increase put the
shrinking working class in indentured servitude for the
benefit of a bloated state. He believed outmigration would
increase and revenues would fall because of the taxes. He
stated that adding jobs would only cause more bloated
government. He asked if the tax would be on vehicles used
to conduct business, food, transportation for affordable
medical services outside Alaska. He implored the committee
not to pass the bill.
Representative Stapp asked if Mr. Huckeba was aware the
proposal was from the executive and not the legislature.
Mr. Huckeba responded affirmatively. He was asking the
legislature to intervene and not pass the legislation.
Co-Chair Foster repeated the call in number for testimony.
Representative Allard asked for a repeat of the number.
5:50:15 PM
ALEX WERTHEIMER, SELF, JUNEAU (via teleconference), was
pleased to see the governor was considering a broad based
statewide tax to try to put the state budget on a
sustainable path and avert a plunge off the proverbial
fiscal cliff. He stated that unfortunately the governor's
plan was flawed and contradictory to his statement that
Alaskans deserve a stable fiscal system that avoided the
boom and bust cycle that came with a budget based on the
price of oil. Instead, it proposed a plan for short-term
relief through tax revenue and blind faith in the volatile
and uncertain revenue streams in the future from in oil and
gas extraction. He had several primary concerns about the
proposal but he focused his comments on the statewide
sales. He stressed that a statewide sales tax was not the
right approach. He supported returning to a state income
tax. He recalled paying state income tax decades back. He
stated it was a very simple process based on a percentage
of an individual's federal tax. He elaborated that it was a
progressive tax system so that individuals with limited
income paid a lower percentage. He stated it would recoup
some of the money leaving the state with the large seasonal
workforce that did not contribute to the infrastructure and
operation of the state. He highlighted that a sales tax
would impact low income people the most and would disrupt
the current use of sales tax by many municipalities
throughout the state to fund local government including the
elimination of exemptions crafted by the electorate in
those jurisdictions. Additionally, the sunset provision on
the new tax was short sighted. He remarked that it had
occurred in the past - the state had eliminated the income
tax because oil would pay for everything. He stated it was
wishful thinking that increases in oil and gas revenue
would offset the need for tax revenue, especially when
factoring in the elimination of important current revenue
such as the corporate income tax. He pointed out that if
the state started to see increased revenue from new oil and
gas projects, the tax rates could be modified to reflect
that, but the taxes should not be eliminated. He thanked
the committee for the opportunity to provide testimony.
5:53:21 PM
CHRIS NOEL, MAYOR, DENALI BOROUGH, HEALY (via
teleconference), thanked the committee. He echoed Mayor
Weldon's remarks acknowledging and appreciating the
governor for offering a revenue measure. The Denali Borough
understood the state's revenue shortfall and the pressure
it created. Alaska needed support for its schools, a
capital budget that made a meaningful difference, halting
the decline of infrastructure, investments in new needs
across the state, and inflation adjusted programs. The
borough had long supported a fiscal plan that included new
revenue and believed an income tax was the fairest
statewide tool because it asked Alaskans to contribute
based on their ability to pay. He added it was a tool the
state was equipped to use and one that was not available to
municipalities. He stressed that a sales tax proposal must
not undermine local authority or override decisions local
voters already made. He pointed out that sales tax was
among the most regressive revenue tools with the burden
falling most heavily on low income and vulnerable
residents. He stated that it threatened local decision
making and voter approved local policy choices. The bill
would impose a sales tax when voters in the Denali Borough
had not yet approved a local broad based sales tax and in
many places it would be a tax on top of already approved
local taxes making day to day life more expensive.
Additionally, it would preempt local control by risking the
subordination of municipal exemptions. He thanked the
committee.
5:55:46 PM
MIKE MILLIGAN, SELF, KODIAK (via teleconference), spoke in
strong opposition to a statewide sales tax. He emphasized
that the proposal punished communities that already had
sales taxes. Additionally, the proposal set up the state to
create another bureaucracy to help manage a statewide sales
tax. He shared that he lived in Fairbanks around 1975/1976
and he recalled that the city had over $20 million in extra
revenue from the sales tax. He stated that number one rule
of any tax was to always tax the other guy. He stated that
Alaska allowed foreign multinationals to lose money in a
foreign country and bring the losses back to Alaska to
deduct them from the obligation they had in Alaska oil
taxes. He stressed that there were many reasons to oppose
the bill, but the primary reason was that it removed one of
the few tools that rural Alaska had to manage alcohol. He
believed the tax would create more problems. He underscored
that sales taxes should be local and determined by
communities.
Representative Stapp clarified that that the proposal
included a larger constitutionalized Permanent Fund
Dividend (PFD). He asked if the testifier wanted to
comment.
Mr. Milligan traditionally supported a statewide income tax
because coastal communities had many people coming in from
outside. He agreed with the Hammond philosophy that the PFD
was not an entitlement, and it took money away from
government to give residents individual control. He looked
forward to his PFD, and he thought it was a great program,
but he did not see the sales tax as protecting the PFD. He
thought giving multinational companies an excuse to launder
losses in Alaska as a threat to the PFD. He hoped it would
be addressed by the legislature during the current session.
Representative Allard asked if the caller would forego the
PFD to avoid sales tax.
Mr. Milligan responded in the negative. He did not believe
the state should get rid of the PFD; it was something that
gave citizens power. He did not support anything that would
result in the elimination of the PFD.
Representative Stapp thought there may be something wrong
with the teleconference system as many people listed online
were not responding when called upon.
Co-Chair Foster called on the next individual listed [there
was no response].
6:03:09 PM
AT EASE
6:05:00 PM
RECONVENED
Co-Chair Foster recognized Representative Bill Elam in the
room. He explained that some of the individuals who had
called in had dropped off the line. He moved to the next
testifier.
6:05:35 PM
JILA STUART, FINANCE DIRECTOR, HAINES BOROUGH, HAINES (via
teleconference), thanked the committee for the opportunity
to testify. She relayed that Mayor Tom Morfitt wanted to
testify he was currently chairing the Haines Assembly
meeting. She shared that the community was heavily
dependent on local sales tax revenues in order to provide
services for residents and visitors. Local sales tax
currently paid for 30 percent of all general fund services
and 45 percent of the community's police protection and
public works. She relayed that the past fall residents
approved an increase to the current tax rate, which would
increase the summer rate to 7 percent. She explained it was
done largely in response to increased need in funding for
the local school district as state support had decreased in
recent years. She stated that as a rural community,
residents were already stretched to the maximum paying for
fuel, utilities, and groceries. The community understood
that the state was experiencing a revenue shortfall, but
the governor's proposed plan would greatly inhibit the
community's ability to provide services to residents and
visitors.
Co-Chair Foster relayed there were 18 people online. He
listed individuals in the queue.
6:07:57 PM
BRYAN SMITH, SELF, ANCHORAGE (via teleconference), was
speaking on his own behalf and is a teacher in Anchorage.
He understood the need for the state to raise revenue. He
highlighted that the situation seen in schools would break
several schools and teachers. He did not support a sales
tax. He pointed out that it would have regressive impacts
around the state, taking more from people with less. He
understood the governor's proposal would generate roughly
$1 billion per year in additional income. He suggested the
state could get roughly the same amount by looking at a
couple of lines in the tax code that credited oil companies
with roughly $1 billion per year for the past couple of
years. He highlighted that the spring 2025 revenue forecast
on the Department of Revenue website showed a total of $2.9
billion in FY 22 through FY 24 in producer credits from two
statutes: AS 43.55.024(i) and AS 43.55.024(j). If
additional revenue was needed after that, he agreed with
other callers that an income tax was a fairer way to go,
which would capture some of income from seasonal and
transient workers. He thanked the committee for its time.
Co-Chair Foster reviewed the email address for public
testimony.
6:10:35 PM
SAM CHANAR, MAYOR, CITY OF TOKSOOK BAY, TOKSOOK BAY (via
teleconference), thanked the committee for the opportunity
to testify. He opposed the bill and the sales and use tax.
He shared that Toksook Bay was municipalities that joined
the Alaska Remote Sellers Sales Tax Commission (ARSSTC) in
2019. He shared that Toksook Bay received sales tax revenue
in monthly deposits from ARSSTC. He shared that if the
community continued to receive late community assistance
program payments beyond the month of July, he feared that
the community would not receive monthly sales tax revenue
in a timely manner if the bill passed.
Representative Jimmie thanked Mayor Chanar for his
testimony. She asked what the city used local sales tax
for. She asked what other needs the city had that exceeded
the sales tax revenue.
Mr. Chanar responded that the community's sales tax income
was 19 percent of its revenue. The income paid for four
departments including administration and finance, city
council, public works, and public safety. He explained that
the community's expenses exceeded the administrative income
and sales tax revenue was used to offset costs for street
lights and more.
Representative Jimmie asked if the local sales tax was
enough to pay for a fire department in Toksook Bay.
Mr. Chanar responded that the sales tax income was not
enough to pay for the services Toksook Bay provided. The
sales tax rate had not changed since the time of its
implementation.
Representative Jimmie asked how fires were dealt with in
the community.
Mr. Chanar answered that the community's fire equipment was
outdated. He explained it was necessary to be near the fire
hydrant system.
Representative Jimmie clarified that Toksook had a fire
hose but it was rarely used. She remarked that there was no
fire department in the rural area. She explained that
people responded to fires with five gallon buckets to throw
water on the flames.
Mr. Chanar agreed.
Co-Chair Schrage thought he heard Mayor Chanar state that
the community did not receive timely community assistance
payments. He stated it was the first time he had heard that
payments were not going out in a timely fashion. He asked
for comment from Mayor Chanar.
Mr. Chanar replied that he testified the prior session in
support of HB 133 (payment of contracts) because the
community had received community assistance payments in
September for FY 22, August for FY 23, October for FY 24
and FY 25, and September for FY 26.
6:17:54 PM
ELIZABETH BACOM, SELF, PETERSBURG (via teleconference),
testified against a statewide sales tax. She detailed that
a statewide sales tax was not good for Alaskans who were
already struggling to pay for groceries, utilities,
childcare, rent, and a number of other things. She stated
that a so called temporary sales tax would
disproportionately impact low income residents as well as
local businesses. She reported that the proposal would turn
Petersburg into a 10 percent sales tax community.
Additionally, some communities were already using local
sales tax revenue to provide services like roads, fire,
police, libraries, and many other things that kept citizens
safe and lives enriched. She stated that a state sales tax
would be an additional and unnecessary burden for residents
and communities. She supported a fair and reasonable income
tax structure specifically targeted to fund education. She
detailed that it would not impact low income residents and
it would address the dollars earned in Alaska that also
left Alaska. She implored the committee to keep Alaska on a
sustainable path. She thanked the committee.
6:19:39 PM
CAROLINE STORM, SELF, ANCHORAGE (via teleconference),
supported analyzing options for new revenues, but based on
an Institute of Social and Economic Research (ISER)
presentation of the fiscal options in front of the
legislature, she did not support a sales tax because it was
so regressive. She stated it was especially regressive
without exemptions for unprepared food, formula, diapers,
menstrual products, basic first aid, etcetera. She stated
the legislature could consider other revenue options
including online sales tax, the repeal of SB 21 [oil tax
legislation passed in 2013], and closing the S corporation
income tax loophole. She asked the committee to continue to
analyze revenue measures that were the least regressive.
6:21:23 PM
THERESA OBERMEYER, SELF, ANCHORAGE (via teleconference),
supported an online sales tax and closing the S corporation
loophole. She represented 14 people in her family and could
not support any new taxes in Alaska. She read that the
state would have to hire 67 new employees to implement a
sales tax. She thought it was ridiculous. She did not
support the idea because it would mean handing out money on
one hand and taking in money on the other. She thought it
was nonsensical. She hoped the legislature would not
support any new sales taxes. She found it comical that the
governor was introducing a big fiscal plan at the end of
his term that went through 2031. She thought he should have
been trying to pass a fiscal plan when he was first elected
and reelected. She thanked the committee.
6:23:47 PM
RITA TROMETTER, SELF, NORTH POLE (via teleconference),
understood the government would like to increase income to
the state as it was unable to maintain a workable budget by
making cuts. She hoped that Alaskan residents would be
exempt from a seasonal sales tax. She stated that having a
tax in the winter at a reduced rate on necessities such as
food, oil, gasoline, and medical supplies was not helpful.
She thought that exempting WIC and food stamps was not
treating people equally. She did not know how it helped a
working person trying to make ends meet. She stated that
the bill taxed items and vehicles purchased out of state
when they were brought to Alaska. She asked if it meant
that someone who purchased a vehicle several years ago and
was still making payments would be subject to the tax if
they registered it in Alaska. She asked what the tax would
be on a used vehicle. She pointed out that for years people
talked about leaving the state because they could not
afford to live in Alaska. She highlighted that the bill
would make it more unaffordable. She referenced the people
in Interior Alaska who had experienced an extremely cold
December and were now having to pay for the utility bills.
She suggested the elimination of property taxes if a sales
tax were to pass. She asked the committee to vote against
the bill as written.
Representative Stapp thanked Ms. Trometter for calling and
communicated that he was opposed to the bill.
6:26:29 PM
TARA HUTCHINSON, SELF, FAIRBANKS (via teleconference),
stated that she opposed the proposed budget. She remarked
that the governor would be remembered for failing Alaskan
children by not supporting education funding, selling out
Alaskans to big business and oil and gas companies, for
wasteful spending on frivolous lawsuits that did not
benefit Alaskans. She did not believe he should be allowed
to further burden Alaskan families. She supported passing
legislation that had been previously vetoed by the governor
including appropriately taxing S corporations and oil and
gas companies, she supported reining in AIDEA expenditures
by passing more congressional oversight of its activities.
She stated that after those things passed, she would
support an income tax that would include income from some
of the highest earners she had worked with who lived out of
state and worked on the North Slope or in hard rock mines.
She referenced that a committee member had asked a
testifier if they would support the bill if it provided a
bigger PFD. She stated that everyone loved a larger PFD,
but she pointed out that the dollars were taxed by the
federal government and a majority of the state's resource
dollars would then be going to the federal government. She
thanked the committee for the opportunity to testify.
6:29:04 PM
KATE VEH, SELF, SOLDOTNA (via teleconference), opposed the
tax. She would like to see things like alcohol being taxed
because they were unhealthy. She thought it was time to tax
the rich. She stated that the legislature needed to start
looking into an income tax.
Representative Allard asked if Ms. Veh had said to tax the
rich.
Ms. Veh responded affirmatively.
6:30:11 PM
MIGUEL RAMIREZ, SELF, FAIRBANKS (via teleconference),
stated that the governor had been pushed into offering the
bill because the legislature had not been smart with the
state's money since 2013. He did not believe a future
legislature would honor the sunset on the tax proposed in
the bill. He remarked that once the legislature saw
billions coming in, spending tended to increase. He
referenced earlier testimony that a vehicle purchased out
of state would be taxed when it was brought to Alaska. He
asked why Alaskans should be told by the state government
how and when to spend their money and get punished for
spending their hard earned dollars. He remarked that
Alaskans were contributing to the state by living in the
state. He did not think the PFD funds should have ever been
used to run state government. Additionally, he did not
think federal pandemic funds should have been sued to run
state government. He suggested that if the governors of
Texas and Florida succeeded in eliminating property taxes,
Alaska would see outmigration. He noticed that when
Representative Stapp asked questions of commissioners, he
could never get a straight answer. He did not know where he
stood on the bill. He knew that outmigration needed to be
stopped. He suggested getting rid of vacant positions or
moving session back on the road system. He thanked the
committee.
Representative Stapp thanked Mr. Ramirez for calling in.
6:33:48 PM
SANDRA WEST, SELF/MEMBER, KODIAK COUNCIL, KODIAK (via
teleconference), thanked the committee. She understood the
state revenue shortfall. She supported broad based revenue
and she believed an income tax was the fairest statewide
tool because it asked Alaskans to contribute based on their
ability to pay. She stressed that the bill would increase
the tax burden on residents on top of local taxes approved
by voters. An additional sales tax would mean additional
cost for food and shelter. The burden of the sales tax
would fall on low income and the most vulnerable residents.
6:35:43 PM
Representative Allard asked if Ms. West would agree to a
flat income tax percentage for everyone regardless of their
income.
Ms. West was not familiar enough to say yes or no.
Representative Allard provided a scenario where she was
personally taxed 3 percent. She asked if Ms. West would
also be willing to be taxed at the same rate of 3 percent.
Ms. West responded affirmatively.
6:36:41 PM
LAURA BONNER, SELF, ANCHORAGE (via teleconference), did not
support a regressive sales tax that would hurt families.
She did not support a proposal to reduce corporate income
tax to zero after five years. She stated it would put the
burden on everyday Alaskans. She pointed out that many
communities had existing sales taxes to pay for local
services. She was opposed to the 50/50 PFD proposal, which
she did not believe was sustainable. She believed the
fiscal policy document from the Alaska Municipal League
made more sense than the governor's bill. She did not
support joining the multistate compact. She stated that the
passage of SB 21 in 2013 had cost the state way too much.
She highlighted that production had not increased but
Alaska was receiving about one-third of the revenue it
received prior to the passage of the bill. There were other
ways to increase revenue such as the online internet tax.
She stated that an income tax would be easier to administer
than the tax proposed in the governor's bill. She was
adamantly opposed to the bill. She hoped the legislature
could come up with a better plan.
6:38:57 PM
GLENDA LEDFORD, MAYOR, WASILLA (via teleconference),
thanked the committee for the opportunity to testify. She
stated that local governments understood the state's
revenue shortfall and pressures it created. Local
governments had long supported broad based revenue and an
income tax was the fairest statewide tool because it asked
Alaskans to contribute based on the ability to pay. She
stated that if a sales tax was the only proposal, it must
not undermine local authority or override decisions made by
local voters. She stated that the bill would increase the
total tax burden on Alaskans and in many places it would do
so on top of local taxes voters had already approved,
making life more expensive. Costs would increase on
groceries, diapers, heating fuel, and more. She stated that
a sales tax was among the most regressive revenue tools
with the burden falling on low income and vulnerable
residents. Additionally, it threatened local decision
making and local voter-approved policy choices. Community
sales taxes included things that voters approved to make
the system workable locally. The bill did not clearly
protect those choices.
Representative Moore thanked Mayor Ledford for calling.
6:41:33 PM
RANDY GRIFFIN, SELF, FAIRBANKS (via teleconference), spoke
against the sales tax because it would destroy the honesty
and purity of the PFD that had always been provided after
essential services were paid for. He noted there were some
things that were more important than the PFD such as public
safety, courts, and snow removal. He noted there may be
some things that were not more important than the PFD. He
recognized that it was a wonderful thing, but he believed
any state that could afford to hand out free money had no
money problem. He noted Alaska was the only state that
provided a PFD. He suggested that if the state had a sales
tax or income tax it would change the PFD into a public
assistance payment. He pointed out that a dividend
generally meant there was surplus money (e.g., a profitable
business that paid its shareholders a dividend). He did not
want the PFD to change into welfare. Currently, there was
no shame in taking the PFD, he did not support an income
transfer where money was sucked out of the pockets of
Alaskans just to give it to other people in Alaska. He
remarked that many of the individuals were not working or
were drug abusers. He stated there was nothing wrong with a
public assistance payment going to needy people who had no
other way to get back on their feet. He believed the lack
of a sales or income tax served as a barrier to increased
government spending. He stated that the government spent
plenty of money and it would get more money as the
Permanent Fund grew in the future. He did not support an
income or sales tax.
6:44:24 PM
JAMES AKERELREA, PRESIDENT, SCAMMON BAY TRIBAL COUNCIL,
SCAMMON BAY (via teleconference), spoke in opposition to
the proposed sales tax because it placed the burden on the
people in rural Alaska. He highlighted that everything cost
more in rural Alaska before tax was even factored in. He
stressed that freight, barges, and planes cost substantial
money. He stated that goods already cost two to four times
the cost on the road system. He explained that sales tax
would stack on top of the cost. The region was also paying
the cost to bring fuel to its villages at about $40,000 per
year. He explained that residents would be faced with
paying the tax or going without goods. He relayed that the
money people made in villages was not disposable income. He
underscored that many rural households relied on seasonal
work, subsistence, and fixed income.
Representative Jimmie thanked Mr. Akerelrea for calling in
and providing a good perspective of how the bill would
impact rural Alaska.
Co-Chair Foster thanked Mr. Akerelrea for calling.
6:47:03 PM
ROBERTA MURPHY, SELF, EMMONAK (via teleconference), spoke
in opposition to the bill. She is the tribal administrator
for Chuloonawick Native Village and her office received
numerous donation requests for assistance with food and
utilities. She shared that the city government depended on
local taxes. She detailed that in the past six months a
case of Top Ramen increased from $20 to $25. She stressed
that residents in rural Alaska were already suffering
because of the prices. She was not on public assistance and
she was barely making it due to the cost of living in the
community. She shared that oil cost $9.67 per gallon and
her grocery bill was $700 every two weeks. They were
already trying to make their money stretch and the bill
asked them to stretch even more. She thought there should
be other sources to find the money. She relayed that the
majority of Emmonak residents lived off food stamps and
heating assistance. There were some people who did not
qualify for any of the public assistance. She noted that if
a person's snow machine broke down they had to order parts
and it was shipped on the one cargo that charged $78 for 23
pounds of freight. She elaborated that snow machines were
used for subsistence. She shared that Emmonak had a cannery
that had employed residents, but it had closed. She was
opposed to the tax.
Representative Jimmie thanked Ms. Murphy for her hard
testimony. She asked what the existing sales tax in Emmonak
was.
Ms. Murphy answered that the current sales tax was 3
percent. There had been a vote on increasing the rate to 4
percent, but it had failed.
Representative Jimmie asked if Ms. Murphy would support
keeping the tax on large corporations instead of making it
smaller.
Ms. Murphy replied affirmatively.
6:53:10 PM
JACQUELINE MUEHLBAUER, SELF, FAIRBANKS (via
teleconference), opposed the bill. She stated that the bill
was hard on local governments, harder on lower income
Alaskans, and those in higher income brackets. She shared
that she just paid a $1,200 oil bill for heat due to record
low temperatures. She suggested taxing oil companies
instead of implementing a sales tax. She stated it was
appalling how much oil companies got out of Alaska's
resources. She emphasized that oil companies should be
paying the state in order for Alaska to have the best
schools and roads in the country. There was no reason not
to tax oil companies. She supported an income tax and
pointed out that most other states had one. She stated that
they could not keep believing in the PFD; it was necessary
to start thinking about how the future would look, which
would mean taxes. She did not support eliminating the
corporate tax. She stated that the companies could afford
to pay taxes to Alaska, improve the state, and make a
profit. She stressed that the legislature had a duty to
Alaskans, not corporations.
Representative Stapp thanked Ms. Muehlbauer for calling.
6:55:50 PM
ROZLYN GRADY-WYCHE, SELF, ANCHORAGE (via teleconference),
shared that she is a resident of Mountain View, which she
characterized as one of the most diverse and
disenfranchised neighborhoods in Anchorage. She stressed
that Alaska needed real sustainable revenue and it was
imperative to choose the least regressive path forward. She
opposed a statewide sales tax. She supported restoring oil
taxes and a progressive income taxes. She opposed
eliminating corporate taxes. She emphasized that sales
taxes did not hit corporations first, they hit families.
Sales taxes raised the price of groceries, diapers, gas,
and school supplies and forced working people to choose
between food, rent, medicine, and keeping the lights on,
while large companies continue to receive tax breaks. She
underscored that it was not fiscal responsibility; it was
shifted the burden downward. She stressed that families
were already stretched beyond stretch. She detailed that
elders were already choosing between prescriptions and
groceries, and parents were already juggling multiple jobs
in order to survive. She emphasized that a sales tax harmed
communities like hers. She shared that as a new small
business owner, she knew that sales taxes were passed
directly to customers.
Ms. Grady-Wyche shared that as a parent of five she felt
every increase at the register and as an educator she saw
the consequences of underfunding every day. She detailed
that there were fewer supports, overcrowded classrooms, and
burdened staff. She supported a progressive income tax that
protected low income families, scaled with ability to pay,
and included nonresident workers. She stated it was
necessary to stop pretending that corporate income taxes
created prosperity. She continued to discuss reasons for
her opposition to the bill. She stressed that Alaska should
not be forced to choose between a PFD and a functioning
state. She reiterated the items she supported and opposed.
She stated that no legislators complained about receiving a
$30,000 raise, but when every day Alaskans were asked to
contribute through a fair system suddenly it was
controversial. She underscored the need to choose the least
regressive path.
6:59:32 PM
BARBARA HANEY, SELF, NORTH POLE (via teleconference),
thought looking at a statewide sales tax was appropriate.
She believed the state would be much better off with a
sales tax than an income tax. She remarked that the wealthy
always found ways to avoid income taxes, but it was
difficult to avoid a sales tax. She stated that poor
individuals on welfare would not pay sales taxes. She
remarked that a 3 to 4 percent tax equated to a nickel and
people would not work hard to avoid paying that amount.
However, she found it problematic that the bill did not
contain a local government carveout.
Representative Galvin remarked that there was a momentary
shutdown of the audio system. She communicated to Ms. Haney
that her voice mattered, and the committee members were all
listening. She thanked the testifier for calling in.
7:02:23 PM
REBECCA LOGAN, SELF, ANCHORAGE (via teleconference), asked
the legislature to follow the rule the legislature put in
place for the public. She stated that the hearing had been
noticed as an opportunity for the public to testify on the
entire HB 284. She thought many people were surprised the
testimony was limited to the sales tax portion of the bill.
She stated that individuals had hung up when they found out
they could not testify on the other portions of the bill.
She added that testifiers were being allowed to speak to
other items besides the sales tax. She thought the
committee did not give the public the opportunity to
testify.
Co-Chair Foster clarified that the committee ran out of
time earlier in the day to take up the other two sections
of the bill including oil tax and corporate income tax. The
committee would come back to those portions of the bill the
following week and there would be an opportunity to testify
after that time.
Representative Bynum asked if the testifier had anything
specific to share.
Ms. Logan replied that she did not. She thought it was
disrespectful to businesspeople to make the change.
Co-Chair Foster clarified that individuals could submit
written testimony as well.
7:05:08 PM
REBECCA BRAUN, SELF, JUNEAU (via teleconference), thanked
the committee for the opportunity to testify. She shared
that her high school science teacher had sign above his
door that said "TANSTAAFL," which stood for there ain't no
such thing as a free lunch. She stated that in her view it
was not possible to have good schools, safe communities,
and plowed roads without money. She appreciated the revenue
conversation, but she did not support the governor's
approach. She opposed reducing corporate income taxes,
which shifted more of the burden onto Alaskans. She did not
support a state sales tax, which disproportionately
impacted low and middle income families, was hard on
communities relying on local sales taxes, was very hard on
rural Alaska where the cost of goods was already high. She
stated that income taxes could be designed to protect low
and middle income Alaskans and would be deductible from
federal taxes. She highlighted that an income tax would
ensure Alaska received a contribution from the 24 percent
of the workforce that lived out of state. The state had the
tools to solve its revenue problem by closing the S corp
tax loophole and taxing out of state corporations doing
online business in Alaska. She pointed out that Alaska had
the lowest individual tax burden in the nation and she
believed it could sustain a modest progressive income tax.
She emphasized the need for the leadership and courage that
would generate the revenue to enable the state to thrive.
She thanked the committee.
7:07:09 PM
Co-Chair Foster recognized Representative DeLena Johnson in
the room.
7:07:34 PM
LORI STRICKLER, DEPARTMENT MANAGER, CITY OF BETHEL (via
teleconference), spoke against the bill. She stated that
the cost of living in Bethel and other rural Alaska
communities was already higher than what many people could
afford. She stated that the tax would disproportionately
impact people living in rural areas and would make life
unaffordable. The rising cost of living was already forcing
people to leave the region. She suggested that the state
should be working to prevent outmigration and make it
easier for people to live, work, and thrive in rural
Alaskan communities. She understood the state was facing a
budget crisis; however, a regressive tax was not the
solution and would not help Alaska at large. She asked the
committee not to support the proposal. She thanked the
committee for its time.
Representative Jimmie thanked Ms. Strickler for her
testimony. Quyanna.
7:08:55 PM
LEON JAIMES, SELF, ANCHORAGE (via teleconference), opposed
a sales tax under the bill, which he believed would
disproportionately hurt lower income individuals and rural
Alaskans. He used Wasilla's local sales tax as an example
and highlighted it had exemptions for childcare and daycare
services, medical supplies, postage, shipping, and shipping
supplies. He noted that all of the items were uniquely more
common in Alaska and were not exempted from the proposed
sales tax. He pointed out that goods and energy costs in
rural Alaska were already substantially higher and the
proposal did not exempt those things. He urged the
committee to oppose the proposal.
Co-Chair Foster noted that the committee would come back in
15 minutes
7:10:36 PM
AT EASE
7:28:10 PM
RECONVENED
Co-Chair Foster noted there were three additional callers
online.
7:28:42 PM
STEVEN TOMS, SELF, BIRCHWOOD (via teleconference), wanted
to see oil tax go back to a previous system. He remarked
that a couple of administrations cut the oil tax and as a
result the legislature was dipping into the Permanent Fund
to pay for services that the oil tax should be paying for.
He wanted the legislature to leave the Permanent Fund
alone. He determined that a sales tax was unnecessary if
the previous oil tax was reinstated.
7:30:43 PM
JIM HAZLETT, SELF, WASILLA (via teleconference), stated
that a sales tax was not a bad idea if it was charged to
nonresidents, not residents. He remarked that it was
working in other towns in Alaska seasonally. He asked why a
sales tax was being considered at all when there were many
workers coming to Alaska to make money on the North Slope
and who then left the state. He stated that the individuals
did not pay income tax [to the state]. He thought the
individuals should pay an income tax. He thought the
legislature needed to draw the needed money from somewhere
besides the Permanent Fund and General Fund.
7:32:18 PM
DOUG GOERING, SELF, FAIRBANKS (via teleconference),
highlighted that sales tax was regressive and would hit
rural communities much harder than urban communities. He
stated that an income tax would be less regressive. He
pointed out that an income tax or a state sales tax would
require a new state bureaucracy to implement. He
highlighted that at the same time, the state funded the
Permanent Fund [Dividend] Division, which meant there would
be one state agency handing money out and another state
agency collecting money. He would rather have the PFD
distributed in a progressive way, which would not harm low
and medium income individuals. He reasoned it would not be
a regressive tax, and it would not bleed money out of the
state in the form of federal income taxes. He remarked that
25 to 30 percent of each PFD check was sent to the federal
government. He thanked the committee.
Representative Stapp thanked Mr. Goering for calling.
Co-Chair Foster thanked all of the testifiers for calling.
HB 284 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
day.
ADJOURNMENT
7:35:38 PM
The meeting was adjourned at 7:35 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 284 Public Testimony Recd by 020626_R.pdf |
HFIN 2/5/2026 5:30:00 PM |
HB 284 |