Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/25/2017 05:00 PM LABOR & COMMERCE

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Audio Topic
05:59:02 PM Start
05:59:37 PM HB115
10:33:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 6:00 p.m. --
Heard & Held
-- Public Testimony <Limited to 2 Minutes> --
+ Professor Richard Pomp - HB 115 Sectional TELECONFERENCED
<Invited Testimony Removed from Agenda>
-- Statewide Public Testimony --
Please Sign-in at Your Local LIO
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Office Prior to Hearing.
Contact by Phone: 907-465-4968
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 25, 2017                                                                                         
                           5:59 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Mia Costello, Chair                                                                                                     
Senator Shelley Hughes, Vice Chair                                                                                              
Senator Kevin Meyer                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Berta Gardner                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
OTHER LEGISLATORS PRESENT                                                                                                     
Senator Tom Begich                                                                                                              
Senator Peter Micciche                                                                                                          
Representative Tammie Wilson                                                                                                    
Representative Cathy Tilton                                                                                                     
Representative Justin Parish                                                                                                    
Representative Chris Tuck                                                                                                       
Representative Lora Reinbold                                                                                                    
Representative Dan Ortiz                                                                                                        
Representative Dan Saddler                                                                                                      
COMMITTEE CALENDAR                                                                                                            
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 115(FIN) AM(EFD FLD)                                                                    
"An Act bearing  the short title of the  'Education Funding Act';                                                               
relating  to the  taxation of  income  of individuals,  partners,                                                               
shareholders in S corporations,  trusts, and estates; relating to                                                               
a payment  against the individual  income tax from  the permanent                                                               
fund  dividend disbursement;  and repealing  tax credits  applied                                                               
against the  tax on individuals  under the Alaska Net  Income Tax                                                               
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 115                                                                                                                  
SHORT TITLE: INCOME TAX; PFD PAYMENT/CREDIT;                                                                                    
SPONSOR(s): FINANCE                                                                                                             
02/10/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/10/17       (H)       FIN                                                                                                    
02/13/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/13/17       (H)       Heard & Held                                                                                           
02/13/17       (H)       MINUTE(FIN)                                                                                            
02/14/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/14/17       (H)       Heard & Held                                                                                           
02/14/17       (H)       MINUTE(FIN)                                                                                            
02/15/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/15/17       (H)       Heard & Held                                                                                           
02/15/17       (H)       MINUTE(FIN)                                                                                            
02/17/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/17/17       (H)       Heard & Held                                                                                           
02/17/17       (H)       MINUTE(FIN)                                                                                            
02/21/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/21/17       (H)       Heard & Held                                                                                           
02/21/17       (H)       MINUTE(FIN)                                                                                            
02/24/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/24/17       (H)       Heard & Held                                                                                           
02/24/17       (H)       MINUTE(FIN)                                                                                            
03/14/17       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
03/14/17       (H)       Heard & Held                                                                                           
03/14/17       (H)       MINUTE(FIN)                                                                                            
03/15/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/15/17       (H)       Heard & Held                                                                                           
03/15/17       (H)       MINUTE(FIN)                                                                                            
03/17/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/17/17       (H)       Heard & Held                                                                                           
03/17/17       (H)       MINUTE(FIN)                                                                                            
03/20/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/20/17       (H)       Heard & Held                                                                                           
03/20/17       (H)       MINUTE(FIN)                                                                                            
03/23/17       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/23/17       (H)       Heard & Held                                                                                           
03/23/17       (H)       MINUTE(FIN)                                                                                            
03/27/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/27/17       (H)       Heard & Held                                                                                           
03/27/17       (H)       MINUTE(FIN)                                                                                            
03/28/17       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/28/17       (H)       Heard & Held                                                                                           
03/28/17       (H)       MINUTE(FIN)                                                                                            
03/28/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/28/17       (H)       Heard & Held                                                                                           
03/28/17       (H)       MINUTE(FIN)                                                                                            
03/29/17       (H)       FIN AT 1:00 PM HOUSE FINANCE 519                                                                       
03/29/17       (H)       Heard & Held                                                                                           
03/29/17       (H)       MINUTE(FIN)                                                                                            
03/29/17       (H)       FIN AT 5:30 PM HOUSE FINANCE 519                                                                       
03/29/17       (H)       Heard & Held                                                                                           
03/29/17       (H)       MINUTE(FIN)                                                                                            
03/30/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/30/17       (H)       Heard & Held                                                                                           
03/30/17       (H)       MINUTE(FIN)                                                                                            
04/03/17       (H)       FIN AT 1:00 PM HOUSE FINANCE 519                                                                       
04/03/17       (H)       Heard & Held                                                                                           
04/03/17       (H)       MINUTE(FIN)                                                                                            
04/04/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/04/17       (H)       -- MEETING CANCELED --                                                                                 
04/07/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/07/17       (H)       <Bill Hearing Canceled>                                                                                
04/11/17       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/11/17       (H)       Moved CSHB 115(FIN) Out of Committee                                                                   
04/11/17       (H)       MINUTE(FIN)                                                                                            
04/12/17       (H)       FIN RPT CS(FIN) NT 4DP 4DNP 2NR 1AM                                                                    
04/12/17       (H)       DP: GUTTENBERG, GARA, SEATON, FOSTER                                                                   
04/12/17       (H)       DNP: TILTON, THOMPSON, PRUITT, WILSON                                                                  
04/12/17       (H)       NR: GRENN, ORTIZ                                                                                       
04/12/17       (H)       AM: KAWASAKI                                                                                           
04/15/17       (H)       BEFORE HOUSE IN SECOND READING                                                                         
04/16/17       (H)       TRANSMITTED TO (S)                                                                                     
04/16/17       (H)       VERSION: CSHB 115(FIN) AM(EFD FLD)                                                                     
04/17/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/17/17       (S)       L&C, FIN                                                                                               
04/24/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/24/17       (S)       -- MEETING CANCELED --                                                                                 
04/25/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
04/25/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/25/17       (S)       L&C AT 5:00 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
MIKE MILLER, Vice Chairman                                                                                                      
Alaska National Federation of Independent Business (NFIB)                                                                       
North Pole, Alaska                                                                                                              
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
DEVON THOMAS, President                                                                                                         
Alaska Association of Realtors                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
TOMAS BOUTIN, representing self                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MIKE MILLIGAN, representing self                                                                                                
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
MARY FORBES, representing self                                                                                                  
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
STOSH ANDERSON, representing self                                                                                               
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
ADRIENNE WILBER, representing self                                                                                              
Sitka, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
ED GRAY, representing self                                                                                                      
Sitka, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
RICK CARLSON, representing self                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
CHRISTINE NIEMI, representing self                                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
KEVIN SHIPLEY, representing self                                                                                                
Kake, Alaska                                                                                                                    
POSITION STATEMENT: Testified in support of HB 115.                                                                           
BRIAN MCNEIL, representing self                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Proposed that a state income tax accommodate                                                              
people who pay their own health insurance.                                                                                      
JIM CHEYDLEUR, representing self                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JEAN JAMES, representing self                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
MARK JOHNSON, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
WILLIAM HARRINGTON, representing self                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
SARAH DAVIES, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JANET MCCABE, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
HELEN NIENHUESER, representing self                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
SARAH MCCABE, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
SHANNA ZUSPAN, representing self                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
CHRIS BECK, representing self                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
ANDY HOLLEMAN, representing self                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
GREGORY ANDERSON, representing self                                                                                             
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
HERMAN MORGAN, representing self                                                                                                
Aniak, Alaska                                                                                                                   
POSITION STATEMENT: Testified that an income tax would have been                                                              
good, but cutting the permanent fund dividend (PFD) was the same                                                                
as a flat tax making the timing of the income tax wrong.                                                                        
DAVE PALMQUIST, representing self                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
GEORGE PIERCE, representing self                                                                                                
Kasilof, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of HB 115.                                                                           
SUSAN OPALKA, representing self                                                                                                 
Girdwood, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JASON JONES, representing self                                                                                                  
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
TRISH MCDOUGALL, representing self                                                                                              
Houston, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
RONALD ALLEN, representing self                                                                                                 
Skwentna, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MIKE COONS, representing self                                                                                                   
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
RICH YOUNG, representing self                                                                                                   
Eagle River, Alaska                                                                                                             
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
ROSELYNN CACY, representing self                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of a progressive tax                                                                 
with specific changes to HB 115.                                                                                                
BRINNA WOJTALEWICZ, representing self                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
ORIN SEYBERT, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JANA PIERCE, representing self                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
MARYLEE GUTHRIE, representing self                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
BILL WARREN, representing self                                                                                                  
Nikiski, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of HB 115.                                                                           
DAVID BRIGHTON, representing self                                                                                               
Kenai, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
RACHEL NEUENDORF, representing self                                                                                             
Soldotna, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
FRED STURMAN, representing self                                                                                                 
Kenai, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MICHAEL ILLG, representing self                                                                                                 
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
KATE FINN, representing self                                                                                                    
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
DUANE CHRISTENSEN, representing self                                                                                            
Anchor Point, Alaska                                                                                                            
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
DAN BOONE, representing self                                                                                                    
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
CLYDE BOYER JR., representing self                                                                                              
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
AMY BOLLENBACH, representing self                                                                                               
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified in support of HB 115.                                                                           
GARVIN BUCERIA, representing self                                                                                               
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
STEVE ST. CLAIR, representing self                                                                                              
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
ABBY ST. CLAIR, representing self                                                                                               
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
PETER MORGAN, representing self                                                                                                 
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
BETH RIVEST, representing self                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
PAUL KENDALL, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
KEVIN MCCABE, representing self                                                                                                 
Big Lake, Alaska                                                                                                                
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
LAURA BONNER, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
DAVID NEES, representing self                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
ELLIE GOTTSTEIN, representing self                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
BEN MULLIGAN, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Called for a spending cap before he will                                                                  
support an income tax.                                                                                                          
CURTIS THAYER, President                                                                                                        
Alaska Chamber of Commerce                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
DAVID LANDRY, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
MICHAEL CHAMBERS, representing self                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
JASON GUSTAFSON, representing self                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
DAVID BOYLE, Executive Director                                                                                                 
Alaska Policy Forum                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MARNIE HARTILL, representing self                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
DARIO BORGHESAN, representing self                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
DEENA MITCHELL, representing self                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
PATTY LINVILLE, representing self                                                                                               
Seward, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
BRUCE JAFFA, representing self                                                                                                  
Seward, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
MATT STEELE, representing self                                                                                                  
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
RYAN MCKEE                                                                                                                      
Americans For Prosperity                                                                                                        
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
BETH FREAD, representing self                                                                                                   
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
GARRETT ABBOTT, representing self                                                                                               
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
TERRI ROBBINS, representing self                                                                                                
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
BRENDA LOUGHMAN, Committee Member                                                                                               
Tongass School of Arts and Sciences                                                                                             
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
WALT COULTER, representing self                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
DON GRAY, representing self                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
GERALD BROWN, representing self                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
TERRENCE COLE, representing self                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JOAN FRANZ, representing self                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
PRINCESS LUCAJ, representing self                                                                                               
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
WOLFGANG FALKE, representing self                                                                                               
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
DANIEL LYNCH, representing self                                                                                                 
Soldotna, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of HB 115.                                                                           
PENNY VADLA, representing self                                                                                                  
Soldotna, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of HB 115.                                                                           
TIM SCHRAGE, representing self                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
CHRIS NELSON, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
CYNTHIA HENRY, representing self                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
BOB GRIFFIN, representing self                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
LUANN MCVEY, representing self                                                                                                  
Douglas, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JOAN O'KEEFE, Operations Chair                                                                                                  
The Foraker Group                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
MARJORIE HAMBURGER, representing self                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
CLAIRE HOLLAND LECLAIR, representing self                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
ROBIN SMITH, representing self                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
TERRIE GOTTSTEIN, representing self                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JEREMY PRICE, State Director                                                                                                    
Americans for Prosperity                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
JACKIE CASON, representing self                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
THEA AGNEW BEMBEN, representing self                                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JULIE NIELSEN, representing self                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JOSEPH ROTH, representing self                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
KARLA HART, representing self                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 115.                                                                           
JEB STUART, representing self                                                                                                   
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MARY KATASSE, representing self                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified that she supports HB 115 only if                                                                
there are no cuts to education and if the PFD is provided to                                                                    
those in need.                                                                                                                  
DARRELL SMITH, representing self                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
DAN DUNAWAY, representing self                                                                                                  
Dillingham, Alaska                                                                                                              
POSITION STATEMENT: Testified in support of HB 115.                                                                           
KURT SCHMIDT, representing self                                                                                                 
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
CORINNE ROLLMAN, representing self                                                                                              
Eagle River, Alaska                                                                                                             
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MICHELE WHITE, representing self                                                                                                
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
CRYSTAL SCHOENROCK, representing self                                                                                           
Kenai, Alaska                                                                                                                   
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
PHILLIP GRAY, representing self                                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
MIKE ALBERTSON, representing self                                                                                               
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
WENDY BRINGHURST, representing self                                                                                             
Eagle River, Alaska                                                                                                             
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
KRISTIN BELLONIO, representing self                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 115.                                                                           
CATHY MOSHER, representing self                                                                                                 
Willow, Alaska                                                                                                                  
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
JESSICA PRICE, representing self                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
ALAINA CLARK, representing self                                                                                                 
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
ED MARTIN, representing self                                                                                                    
Cooper Landing, Alaska                                                                                                          
POSITION STATEMENT: Testified in opposition to HB 115.                                                                        
ACTION NARRATIVE                                                                                                              
5:59:02 PM                                                                                                                    
CHAIR MIA COSTELLO called the  Senate Labor and Commerce Standing                                                             
Committee meeting  to order at 5:59  p.m. Present at the  call to                                                               
order  were   Senators  Stevens,   Gardner,  Hughes,   and  Chair                                                               
Costello. Senator Meyer arrived shortly thereafter.                                                                             
             HB 115-INCOME TAX; PFD PAYMENT/CREDIT;                                                                         
5:59:37 PM                                                                                                                    
CHAIR COSTELLO announced the consideration  of HB 115. She stated                                                               
that the committee will hear  public testimony. She noted that 74                                                               
people are waiting  online to testify in addition  to others. She                                                               
asked for comments to be limited to two minutes.                                                                                
6:00:34 PM                                                                                                                    
MIKE MILLER,  Vice Chairman,  National Federation  of Independent                                                               
Business  (NFIB),  North  Pole,  said  he  is  also  representing                                                               
himself as  an owner  of the  Santa Claus  House. There  are many                                                               
folks  online,   and  having  "once   set  in  your   chair,"  he                                                               
understands when you have a lot  of folks online and everyone has                                                               
something  to say.  He  said he  understands  that the  committee                                                               
would like to get everyone's  testimony and not leave anyone out.                                                               
He said  he would make his  testimony short and to  the point. He                                                               
then thanked  the committee  for "taking  this up."  Unlike large                                                               
businesses, he  said, small businesses  look at every  penny that                                                               
is spent.  He said there  are many issues  that "go into  when we                                                               
are  spending for  expansion." He  gave  the example  that he  is                                                               
looking at  expanding his store,  so he  factors a lot  of things                                                               
in. When it  comes to government, there are two  things to factor                                                               
in:  regulatory  issues  and  taxation.  He  is  in  the  tourism                                                               
industry, so there are not  many regulatory issues, but there are                                                               
issues of  taxes, and the more  that is put on  small businesses,                                                               
such as taxes-income  taxes-it has been his  experience that they                                                               
want  to grow  their businesses.  What  owners do  is take  their                                                               
profits and put  them back into business to hire  more people and                                                               
"do all  the things that small  business people do." It  has been                                                               
his experience that if those  dollars go to the government, there                                                               
are less  dollars to hire more  people. He said he  is looking at                                                               
hiring 20 more  folks when he expands his  business. Unlike large                                                               
businesses,   small   businesses   cannot  hire   "an   army   of                                                               
accountants, or  lawyers, or  lobbyists." That  is why  they have                                                               
the  NFIB, and  "we all  throw a  few bucks  together and  we get                                                               
Danny." Those are some things to  think about. Also, this bill is                                                               
projected to raise $600 to $700  million, and he said there was a                                                               
PowerPoint presentation  today that  said it was  $680 [million],                                                               
but the  problem is, this  is not  new money coming  into Alaska.                                                               
This is money  coming out of the back pockets  of working men and                                                               
women  in the  state. He  added  that it  is not  like Alaska  is                                                               
bringing this  money from the  Lower 48  states. It has  been his                                                               
experience  that the  consumer is  the best  multiplier of  those                                                               
dollars, and it has been  his experience-having once set in those                                                               
chairs-that  the government  is  the worst  at multiplying  those                                                               
dollars in  the economy.  He thanked the  committee and  said the                                                               
committee  has  a  lot  of  hard work  ahead  of  them.  Whatever                                                               
decision it makes will  be "a tough one." He said  he is "glad it                                                               
is you guys and not me anymore."                                                                                                
6:04:34 PM                                                                                                                    
DEVON THOMAS,  President, Alaska  Association of  Realtors (AAR),                                                               
Anchorage, said she  is a realtor and a lifelong  resident of the                                                               
area. The  AAR has over 1,700  members, and its mission  is to be                                                               
the  voice of  real  estate  for Alaska,  and  its  vision is  to                                                               
advocate   for  private   property  rights   and  to   create  an                                                               
environment  that encourages  real property  ownership. She  said                                                               
that  AAR  members  recognize  that  the  state  faces  difficult                                                               
decisions in  solving the fiscal  problems. Alaska  realtors feel                                                               
that  taking money  from Alaska  realtors  without cutting  state                                                               
spending  will  not  solve long-term  issues,  and  AAR  strongly                                                               
opposes HB  115 as  currently passed by  the House.  Many experts                                                               
believe that 2018  will bring higher interest  rates, an increase                                                               
in foreclosures, and an increase  in housing inventory across the                                                               
state.  There  is  already uncertainty  in  homebuyers  from  the                                                               
decline in  the oil  industry, she stated.  Passing HB  115 would                                                               
price many  potential homebuyers  out of  the opportunity  to own                                                               
their  own  home.   Housing  is  one  of   the  leading  economic                                                               
indicators, and  it supports  many jobs  outside the  real estate                                                               
sector,  including retail  and service  sectors. The  association                                                               
strongly opposes  anything that  will jeopardize  home ownership.                                                               
The omission of the mortgage  interest deduction and implementing                                                               
an  additional  capital  gains tax  will  discourage  buyers  and                                                               
sellers,  she  said.  An  income tax  will  depress  the  housing                                                               
economy, which is vital to  full employment for Alaska. She urged                                                               
the Senate to reject HB 115.                                                                                                    
6:07:10 PM                                                                                                                    
TOMAS  BOUTIN, Juneau,  said there  is no  better way  to destroy                                                               
Alaska's  society and  its culture  than  to have  an income  tax                                                               
concurrent  with  the  PFD   [permanent  fund  dividend].  Taxing                                                               
Alaskans who strive, create jobs,  and produce goods and services                                                               
that  the world  wants  to buy  and then  handing  out that  same                                                               
several hundred million dollars  to everyone regardless of effort                                                               
and initiative would  deal an economic blow more  severe than the                                                               
long-expected decline  in petroleum production. He  said he wants                                                               
a culture of work and  one that includes self-worth. The sponsors                                                               
of HB 115 must think we have  too many people working and too few                                                               
people  depending   on  government  checks,  he   opined.  Alaska                                                               
produces  less of  what it  consumes  than any  other state.  The                                                               
extent of the  recession will be due to the  lack of productivity                                                               
and overconsumption,  not the lack  of taxes.  Taxing productive,                                                               
working  families will  retard economic  growth,  and the  timing                                                               
couldn't be  worse, he  averred. Alaska has  three quarters  of a                                                               
million consumers.  Production must  come back into  balance, and                                                               
the road  will be  tougher with  an income  tax, he  added. Those                                                               
living  on government  payments  are held  harmless.  He said  to                                                               
"think about the  adverse selection that an  income tax implies."                                                               
The bill  attempts to  Bernie Sanderize  Alaska-a bitter  pill to                                                               
put on Alaskans.                                                                                                                
MR. BOUTIN  added that other  government spending  is consumption                                                               
rather  than production.  Lost oil  taxes  cannot be  made up  by                                                               
taking in  one another's washing.  No other state comes  close to                                                               
us,  he stated,  in per  capita government  handouts. Taxing  the                                                               
private  sector  for  government  solves none  of  the  problems.                                                               
"Would any  elected official look  a small business owner  in the                                                               
eye and tell her  she needs to pay an income  tax and withhold an                                                               
income tax  from her two employees  while the state pays  its new                                                               
natural  gas guy  $750,000 a  year to  have him  jet between  his                                                               
offices  in  Anchorage  and  Houston  and  Tokyo?"  The  bill  is                                                               
"dishonest"  and  gives  a  seal   of  approval  to  writers  and                                                               
musicians  but  looks  down its  nose  at  commercial  fishermen,                                                               
welders,  and truck  drivers. "It's  so typical."  He noted  that                                                               
Bernie [Sanders]  thinks he has  Alaskans over a barrel.  He said                                                               
that  Alaskans  don't  want  government  taking  wages  and  then                                                               
figuring out  how much to give  back, and that is  what an income                                                               
tax combined with a PFD does.                                                                                                   
CHAIR COSTELLO noted that Commissioner  Randy Hoffbeck joined the                                                               
meeting, as  well as Senator Micciche  and Representatives Tilton                                                               
and Wilson.                                                                                                                     
6:10:42 PM                                                                                                                    
MIKE MILLIGAN, Kodiak, said he supports  HB 115. He said he would                                                               
like to promote a culture of  responsibility in Alaska. He was in                                                               
the state  when there  was an  income tax and  when there  was no                                                               
PFD,  he said.  He  remembers the  debates  over moving  Alaska's                                                               
capital and over the WPPSS  project that went belly up, regarding                                                               
the GO  [general obligation] bonds  in Washington state.  He said                                                               
he  remembers all  of this,  and what  came about,  especially in                                                               
Kodiak, was a strict opposition to  an income tax by everyone who                                                               
has grown  up with a  PFD who think  that they shouldn't  have to                                                               
pay for government.  Government, like anything else,  you have to                                                               
pay for, like groceries and things  that a person uses. "You have                                                               
to  pay for  it. If  you  think you  are  going to  enrich us  by                                                               
cutting education more,  I think you're mistaken,"  he added. All                                                               
these people who  say they cannot afford an income  tax, they are                                                               
saying  that they  couldn't  have made  it back  when  we had  an                                                               
income tax.  He said  he would  like to  see an  association with                                                               
income tax and the PFD  application. The only deduction should be                                                               
for  somebody making  a property  tax payment  to a  local Alaska                                                               
government.   That  would   encourage   property  ownership   and                                                               
participation in  local government.  Alaska would get  money from                                                               
everybody to help  pay for government services. The  one thing an                                                               
income tax  helps, he stated, that  no other tax does  is that is                                                               
starts to tax  some of the wealth and wages  that are leaving the                                                               
state daily. "I encourage you to support this bill."                                                                            
6:12:50 PM                                                                                                                    
MARY FORBES, Kodiak,  said she supports HB 115. She  said she has                                                               
written  everybody in  the Senate  and has  previously testified.                                                               
She still feels  very strongly and agrees with  Mr. Milligan that                                                               
there  is too  much of  an entitlement  mentality in  Alaska. She                                                               
noted that she  has never lived anywhere where she  did not pay a                                                               
state income  tax. If instituting  an income tax  causes Alaskans                                                               
to move  elsewhere, "well, more  than likely they will  be paying                                                               
an  income  tax wherever  they  decide  to  move." She  said  she                                                               
disagrees with Mr.  Miller that a tax would not  be a new revenue                                                               
stream-it  is new  revenue  to  capture some  of  the money  that                                                               
people  take and  go live  in other  areas. She  said she  raised                                                               
three children who  got an excellent education, and  she hates to                                                               
think that future  Alaska kids will not get  a quality education.                                                               
"I think  this is the most  progressive way to spread  the burden                                                               
and encourage responsible state residency."                                                                                     
6:14:11 PM                                                                                                                    
STOSH ANDERSON,  Kodiak, expressed  his support  for HB  115. The                                                               
legislature and  the administration has  done a very good  job in                                                               
making  cuts to  the budget  in  the last  few years,  but it  is                                                               
getting to  the point of  diminishing returns for the  benefit of                                                               
state  citizens. He  stated  support for  capping  the PFD,  even                                                               
though that is  a regressive tax, in balance with  an income tax,                                                               
which  is progressive,  and would  share the  burden between  the                                                               
different  classes  and  user  groups  of  Alaska.  He  told  the                                                               
committee  that Alaska  must  address the  subsidies  to the  oil                                                               
companies. Everyone needs to pitch in;  we need to get our budget                                                               
in order.  It can only diminish  our bond rating, which  puts the                                                               
state  in  a  spiral  for   capital  projects  and  the  cost  of                                                               
6:15:23 PM                                                                                                                    
ADRIENNE WILBER,  Sitka, said she  is a commercial  fisherman and                                                               
has lived in  Alaska all her life. She said  she is a beneficiary                                                               
of state funded public education  and Medicaid. She expressed her                                                               
support for  HB 115, and she  would like a complete  fiscal plan,                                                               
which includes  some use of  permanent fund  earnings, empathetic                                                               
cuts to services,  and repealing oil industry tax  credits. "I am                                                               
not thrilled about  paying an income tax, but Alaska  is my home,                                                               
and closing  the state  budget deficit  while continuing  to fund                                                               
essential  services   like  public  schools,  health   care,  and                                                               
fisheries management  is worth it.  She said the  state financial                                                               
distress is tough for legislators,  but she encouraged doing what                                                               
is right for Alaskans and pass HB 115.                                                                                          
6:16:26 PM                                                                                                                    
ED GRAY, Sitka,  said he opposes this bill. There  has not been a                                                               
genuine effort to cut government,  and lawmakers seem to view the                                                               
public sector as a funding  source for "this over-expensive state                                                               
government that we  have." He said he does not  want to deal with                                                               
a new enforcement  branch to enforce a state tax.  He said he has                                                               
been a  business person  in Sitka  for about  35 years.  He noted                                                               
that  he has  had several  businesses, and  recently he  had some                                                               
damage from  mudslides. He is  currently "shut down," but  he has                                                               
been  looking to  restart in  other communities  in Southeast.  A                                                               
state income tax  is just a non-starter for him.  "I'm just going                                                               
to shut  it down if  it happens." He  noted that he  is currently                                                               
shut down,  and that he  is heavily  regulated. He is  in fishing                                                               
and he must deal with the  Fish and Wildlife Service. He repeated                                                               
that he is  heavily regulated, and the income tax  is just a non-                                                               
starter. "I'm just going to take my business outside the state."                                                                
CHAIR COSTELLO noted the presence of Representative Reinbold.                                                                   
6:18:58 PM                                                                                                                    
RICH  CARLSON, Juneau,  said  he  is a  retired  educator and  is                                                               
against HB 115.  The bill has been sold as  modest that will have                                                               
little impact  on the  majority of  Alaskans, but  this is  not a                                                               
modest bill. It  will place an enormous burden  on many Alaskans.                                                               
He said  it will grow  government, increase  unemployment, hinder                                                               
economic  growth, crush  small businesses,  and  would drive  the                                                               
state deeper  into a recession. The  sheer size of HB  115 shocks                                                               
him, he  said. It  is three  and a  half times  the size  of last                                                               
year's proposal  by the Walker  administration, which  would have                                                               
raised  approximately $200  million,  and this  will raise  about                                                               
$700 million. The  proponents proudly claim that  about 1 percent                                                               
of Alaskans  will pay about 27  percent of the taxes,  he stated.                                                               
"I  find that  attitude very  disturbed." Middle  and high-income                                                               
earners will  pay the vast majority  of this tax, and  that might                                                               
be  good  short-term  politics,  but it  will  have  a  long-term                                                               
adverse  effect  on  the  economy.  Senator  Hughes  and  Senator                                                               
Stevens  talked about  people leaving  Alaska, and  it is  a real                                                               
possibility,  he  opined.  He  said   HB  115  will  crush  small                                                               
businesses  due to  the regulations  that  will undoubtedly  come                                                               
from this-just  the idea of  trying to collect payroll  taxes and                                                               
do reports.  He noted the  threat of  an Alaska IRS  hanging over                                                               
people's  heads-that's got  to be  "disconcerning," he  said. The                                                               
bill seems to ignore the values  and spirit of Alaska. He came to                                                               
Alaska because it was a  place of opportunity that encouraged and                                                               
promoted  hard work  and sacrifice.  "That was  and still  is the                                                               
spirit of Alaska," but HB 115 ignores or penalizes that spirit.                                                                 
6:21:50 PM                                                                                                                    
SENATOR STEVENS  asked about Mr.  Carlson's remark  regarding the                                                               
taxes paid by 1 percent of Alaskans.                                                                                            
MR.  CARLSON replied  that  1  percent of  Alaskans  will pay  27                                                               
percent of the tax.                                                                                                             
6:22:25 PM                                                                                                                    
CHRISTINE  NIEMI, Juneau,  said her  comments represent  herself,                                                               
her husband, and  her grown children, who believe  that passing a                                                               
comprehensive fiscal plan  this session is the  top priority, and                                                               
HB  115 is  comprehensive. Her  family is  okay with  a permanent                                                               
fund  dividend   that  ranges  between  $1,000   and  $1,250,  as                                                               
negotiated between the  House and Senate. In 1983,  she was happy                                                               
to  receive a  dividend of  $386.  Before that,  Alaskans had  no                                                               
permanent  fund,  and  it  was  still  a  pleasure  to  be  here.                                                               
Additionally, she favors a progressive  income tax fair to people                                                               
of different income levels that  would capture money from out-of-                                                               
state  workers who  benefit from  Alaska jobs  and would  provide                                                               
broad-based revenue. Alaskans  contribute to for-profit companies                                                               
by buying their products, and  "we strongly oppose providing them                                                               
with subsidies." Lastly, she said,  she supports adequate funding                                                               
for  services such  as public  education, public  transportation,                                                               
roads  and ferries,  public safety,  public  health, and  pioneer                                                               
homes,  just  to  name  a few.  Additional  reductions  to  these                                                               
services is not  acceptable and is dangerous to  the children and                                                               
adults who depend on them. Please support HB 115, she said.                                                                     
6:24:23 PM                                                                                                                    
KEVIN SHIPLEY,  Kake, said he  represents himself even  though he                                                               
is the  superintendent of  a school district.  He said  he mildly                                                               
supports HB 115  as a vehicle to move forward  with a broad-based                                                               
plan.  He has  concerns about  the  bill, he  said, and  normally                                                               
would oppose  any form of income  tax. In another state  he lived                                                               
in, he vehemently opposed income  taxes; however, Alaska does not                                                               
have a  tax structure set  up. In reading HB  115, it is  not the                                                               
simple  plan that  the governor  put out  that would  be easy  to                                                               
regulate  and monitor  through the  permanent fund  committee, he                                                               
stated. It  will create a  large government organization  the way                                                               
the bill  is currently written.  He added  that he does  not like                                                               
the  multiple-tiered system  that  targets  and punishes  people.                                                               
Each Alaskan  must pay  their share; Alaska  is the  lowest taxed                                                               
state in  the nation.  Government has  been cut,  and he  said he                                                               
knows it will  never be cut enough for some  people, but when you                                                               
are the lowest tax group and  your government is as small as ours                                                               
is, we have to move forward.  The amount this bill raises is more                                                               
than the  gap, he said, and  he does not agree  with the Senate's                                                               
plan to  reduce by 5 percent,  because there have been  cuts, and                                                               
school districts will suffer dramatically,  and the students will                                                               
suffer. He suggested  working on the bill  in committee, "because                                                               
we  do  need  a  broad-based  tax."  He  suggested  indexing  the                                                               
permanent  fund  on earnings,  so  people  are not  double-paying                                                               
taxes. This bill  might be the vehicle to start  getting a broad-                                                               
based tax.                                                                                                                      
SENATOR GARDNER asked where Mr. Shipley is superintendent.                                                                      
MR. SHIPLEY answered Kake.                                                                                                      
6:26:47 PM                                                                                                                    
BRIAN  MCNEIL,  Fairbanks, said  Alaska  already  has a  personal                                                               
income tax. He urged that an  accommodation be made for those who                                                               
purchase their  own health insurance.  The proposed tax  is based                                                               
on  one's federal  adjusted gross  income,  line 37  of IRS  form                                                               
1040. At the federal level, that  has already been reduced by the                                                               
cost of health insurance premiums, but only if a person is self-                                                                
employed, he  explained. He said  he is  referring to line  29 on                                                               
form 1040,  the self-employed  health insurance  deduction. Under                                                               
federal law,  retirees, those working  for employers,  and others                                                               
cannot  use  the line  29  adjustment.  At  the state  level,  he                                                               
suggests  that the  adjustment be  available to  anyone who  buys                                                               
their own insurance.  This is important because of  the high cost                                                               
of Alaska health  insurance, which is about two and  a half times                                                               
the  average cost  for  all  states. Using  2017  data for  older                                                               
Alaskans with incomes just above  the subsidy cutoffs, he has the                                                               
following   examples  of   households  purchasing   the  cheapest                                                               
available nonsmoker health insurance:  A single 55-year-old would                                                               
pay $15,480 this year, or about  25 percent of the subsidy cutoff                                                               
adjusted  gross income.  A two-person  household,  both aged  64,                                                               
would pay  a total of  $41,616 this year,  or 51 percent  of that                                                               
subsidy cutoff  income. He  said that a  state tax  should expand                                                               
the  adjustment  to include  anyone  who  buys their  own  health                                                               
insurance.  If the  bill goes  through, then  Alaska should  have                                                               
some accommodation  for people who  have to pay their  own health                                                               
insurance. For older  people, it can be as high  as 50 percent of                                                               
their  income,  and   as  the  bill  is  written,   there  is  no                                                               
accommodation for  that unless the  person is  self-employed. The                                                               
subsidy cutoff  is about $81,000  for two people, so  even though                                                               
they might have  the same income, 50 percent of  that is going to                                                               
the very  minimum health  insurance plan,  which is  the cheapest                                                               
policy  available.  There  is a  credit  for  the  self-employed,                                                               
because  the cost  of health  insurance  comes off  prior to  the                                                               
adjusted gross  income, and it  doesn't for anybody else.  So, an                                                               
income tax  should address that. "I  know we have to  pay for the                                                               
cost of government somehow," he concluded.                                                                                      
6:30:39 PM                                                                                                                    
JIM CHEYDLEUR, Fairbanks, said he is  a parent and a husband. His                                                               
children  have gone  through public  schools, where  he has  seen                                                               
some  degradation,  and  he  is   seeing  lots  of  cuts  at  the                                                               
University of Alaska in Fairbanks.  He expressed his deep concern                                                               
that  Alaska develop  a  comprehensive plan  that  does not  just                                                               
address  this year's  problems. He  said HB  115 is  part of  the                                                               
plan.  Although it  may need  some fine-tuning,  he supports  the                                                               
bill. "We  need to  go back to  recognizing that  government does                                                               
cost people  money." People have  differing abilities to  pay for                                                               
it, and an income tax is progressive  and is one of the places to                                                               
go. He supports  some modifications in the  permanent fund, while                                                               
trying not  to hit people  for whom the dividend  is significant.                                                               
"I urge  you to support this.  Fine-tune it if need  be, but this                                                               
should not  be taken off  the table." He said  it is part  of the                                                               
big picture, as well as adjustments  to the credits being paid to                                                               
the oil companies and modifications to the PFD.                                                                                 
6:32:23 PM                                                                                                                    
JEAN JAMES,  Fairbanks, said she  is retired and has  many family                                                               
members  in Alaska.  She supports  HB 115  and absolutely  agrees                                                               
with  the  previous speaker.  For  the  good  of Alaska  and  its                                                               
communities, she strongly supports  broad-based taxes. She said a                                                               
sales tax would be regressive.  The chamber of commerce says that                                                               
without an income tax, the state  would still have $15 billion in                                                               
savings  beyond  what  is  in  the  permanent  fund,  but  fiscal                                                               
prudence   requires  maintaining   a  savings   account,  cutting                                                               
expenses,  and increasing  revenue.  She  noted that  significant                                                               
cuts  have already  been  made to  government,  schools, and  the                                                               
university, which  have reduced  state spending but  also reduced                                                               
employment. "We  have had enough  cuts, except maybe some  of the                                                               
tax  credits, legislative  per diem,  and  travel expenses."  The                                                               
next step, she  added, is to increase our revenue,  and an income                                                               
tax  is  easiest  and  fairest,  and it  addresses  some  of  the                                                               
concerns  that have  been  talked about  with  people not  having                                                               
enough money to do things. Alaska  had an income tax and a school                                                               
tax before  the pipeline, and  there were excellent  schools, the                                                               
university, and music/arts  programs, and "we need to  do it now;                                                               
we need  to have an income  tax." Unlike what Mr.  Miller stated,                                                               
the income tax would bring in about $80 million from out-of-                                                                    
state workers. She said there are  plenty of them. Alaska has, by                                                               
far, the  lowest taxes in the  country, and adding an  income tax                                                               
would make it  the second lowest. She noted that  Alaska also has                                                               
the largest  state landmass with corresponding  issues. She urged                                                               
caution while  comparing per capita  costs with other  states and                                                               
not compare apples  with oranges. "Pass a  comprehensive tax this                                                               
year and  be statesmen and  stateswomen and support HB  115," she                                                               
6:34:47 PM                                                                                                                    
MARK  JOHNSON,  Anchorage,   said  he  is  retired   and  is  not                                                               
representing any  group. He  said he  has been  in Alaska  for 44                                                               
years and intends to stay. He  has witnessed growth in the state,                                                               
some of  it good, but  who can  forget the Delta  barley project,                                                               
the Valdez  grain terminal, the  Pt. McKenzie dairy  project, the                                                               
fish plant,  and others? They were  all funded with oil  money by                                                               
the legislature under pressure from  various lobbyist groups, and                                                               
all failed to meet even  minimum expectations. Including the half                                                               
million dollars  given to TransCanada, the  legislature has spent                                                               
well  over  a  billion  dollars  on  a  gasline  that  has  never                                                               
materialized. Why not?  Because, he said, it  is not economically                                                               
feasible. Oil revenues  have declined, but this  was predicted 40                                                               
years  ago. Proposing  an income  tax is  the result  of a  self-                                                               
created  crisis,  he  stated. Did  legislators  prepare  for  the                                                               
decline in production  that everyone knew would  happen with just                                                               
a modicum  of restraint?  he asked.  No, they  did not.  In fact,                                                               
over the past  ten years, they increased the  operation budget by                                                               
over 100 percent  in the full light of  declining oil production.                                                               
"We have  the mechanisms  to bridge this  decline in  revenue; we                                                               
created  that  mechanism 40  years  ago,  and  we called  it  the                                                               
permanent fund,"  he said.  The budget can  be reduced  while the                                                               
state  draws from  the  over $13  billion  in the  constitutional                                                               
budget  reserve (CBR)  and the  permanent fund  earnings reserve.                                                               
Reducing the  budget will cause  hardship, he said,  but limiting                                                               
state  programs  will  help  find   new  cost-effective  ways  to                                                               
accomplish the  required services.  Hardship is the  catalyst for                                                               
innovation, and  the state needs to  focus on the future  and not                                                               
just  the next  election.  "We  need strong  leadership-something                                                               
that has  been lacking for the  last ten years." He  said he does                                                               
not  agree  with  implementing  an income  tax;  Alaska  has  the                                                               
highest cost  of living  in the  country, and a  tax will  add to                                                               
that. He also  questioned if the legislature  is trustworthy with                                                               
regard to future tax rates since  they have adjusted tax rates on                                                               
industry nearly  every session. Taxes  grow government,  and they                                                               
would harm  our economy at a  time when Alaska needs  to work its                                                               
way  out of  the  recession,  he opined.  He  said Alaskans  will                                                               
remember  any heroic  or  any reckless  attempts  to solve  these                                                               
problems. He urged the rejection of any income tax.                                                                             
6:38:14 PM                                                                                                                    
WILLIAM HARRINGTON,  Anchorage, said  he is retired  from private                                                               
employment, but he  is on social security, which  is the opposite                                                               
of a public employee who volunteers  to pay an income tax to stay                                                               
employed. "All of this modeling  is just speculation," he stated.                                                               
The cards  are marked and the  deck is stacked against  his group                                                               
of wage earners. He said he  was at his family's beach house when                                                               
his dad grilled a "mean  London broil." "The ladies" chatted over                                                               
after-dinner  drinks,  and his  aunt  discussed  the problems  of                                                               
health, investment, and unemployment  of her brother and wondered                                                               
what they  could do. His  grandmother crossed her arms  and said,                                                               
"He  got  the  same  as us."  Through  frugality,  and  downright                                                               
cheapness, his aunts  are well off, he said, but  his uncle lives                                                               
in a one-bedroom  apartment next to a freeway in  Seattle. As Mr.                                                               
Harrington's mother  said, "you  made your bed,  now lie  in it."                                                               
There's been 40  years of oil taxes and 40  years of uncontrolled                                                               
spending.  In  Juneau, a  $250,000  playground  [burned], and  he                                                               
questioned  if that  screams  excessive  privilege and  spending.                                                               
"And  how   about  that  grain   silo  in  Delta?"  He   said  he                                                               
congratulates  the Senate  on its  position, but  both sides  are                                                               
waving a flag saying, "I want what's best for Alaska!"                                                                          
6:40:1b8 PM                                                                                                                   
SARAH  DAVIES, Anchorage,  said she  is representing  herself and                                                               
that she  is a teacher. The  ideas that nourish the  expansion of                                                               
the self are created in our  homes and are explored in classrooms                                                               
of  diverse settings.  She said  that  she has  taught for  seven                                                               
years  in Alaska  and  has watched  a  continued divestment  from                                                               
those  classrooms  and  administrations  that  advocate  for  the                                                               
teachers  and students  incubating  inside  them. Looking  around                                                               
today, she said,  she cannot help but notice  an education system                                                               
and its composite human parts  in postures of poverty and fearful                                                               
uncertainty,   when  we   most  desperately   need  postures   of                                                               
possibility,  championship,  and  advancement.  She  stated  that                                                               
without investment,  Alaska will  stand witness to  the continued                                                               
malnourishment  of the  social,  physical,  mental, and  economic                                                               
health of its  own communities. "We are on a  growing edge today;                                                               
it is normal  to not know what  to do or where to  go," she said.                                                               
It is  normal to feel  confused, frustrated, anxious,  and tired,                                                               
and these are the indicators (unclear)  on the right side of this                                                               
profoundly  noble  fight to  promote  an  enriched education  for                                                               
students of all  ages, she opined. Far too many  of Alaskans have                                                               
watched too  many [students] walk  out of this state  seeking the                                                               
education they  know they  are entitled to  but can't  find here.                                                               
She urged taking action that  prioritizes personal and commercial                                                               
investment  in education.  "I  am  willing to  offer  my own  tax                                                               
dollars in support of this bill," she concluded.                                                                                
6:42:06 PM                                                                                                                    
JANET MCCABE,  Anchorage, said she supports  a progressive income                                                               
tax. It  is essential to Alaska's  future to both approve  a draw                                                               
from the  permanent fund earnings  reserve account and  an income                                                               
tax this session,  as a package. To be realistic,  once the state                                                               
starts  drawing  funds for  state  operations  from the  earnings                                                               
reserve, it  will be even less  inclined to impose an  income tax                                                               
to  cover  fiscal  needs.  The   results,  she  added,  would  be                                                               
increases  in withdrawals  from  the earnings  reserve in  future                                                               
years,  and,  upon  exhausting  the reserve,  the  PFD  would  be                                                               
canceled,  and  eventually  the  corpus   of  the  fund  will  be                                                               
endangered. Alaska  will be much  poorer, and then an  income tax                                                               
will  come  back,  she  surmised.  She  urged  the  committee  to                                                               
consider  the  full scope  of  Governor  Hammond's vision,  which                                                               
included  a state  income tax  to provide  enough funding  in the                                                               
future so that legislators are  not tempted to balance the budget                                                               
by increasing the draw. The  cuts that have been proposed instead                                                               
of an  income tax would mean  the loss of 700  teaching jobs. The                                                               
ripple  effects  on the  economy  would  be felt  statewide,  she                                                               
offered. These  cuts are  the sort  of actions  that can  tip the                                                               
balance of throwing  a recession into a  major economic downturn.                                                               
She said  that there are  plenty of people  here to remind  us of                                                               
the benefits of quality schools  and universities. Alaska needs a                                                               
complete revenue  package to assure Alaska's  prosperity that was                                                               
identified by Governor Hammond 40  years ago: using the permanent                                                               
fund  earnings for  state services  and a  state income  tax. "We                                                               
need them both, this session, in one package," she stated.                                                                      
6:44:43 PM                                                                                                                    
HELEN  NIENHUESER,  Anchorage,  said   she  has  been  an  Alaska                                                               
resident  since  1959  and  strongly   supports  HB  115.  It  is                                                               
essential for  solving the deficit.  She supports the  income tax                                                               
along  with  the   House  revision  of  SB  26.   The  bills  are                                                               
complimentary, she  said, and  the state  needs both.  The income                                                               
tax won't  solve the problem  by itself,  but it is  an essential                                                               
part  of stabilizing  Alaska's finances.  She noted  that it  has                                                               
been  a  great  while  since  oil  started  flowing  through  the                                                               
pipeline,  and Alaska  has done  a lot  of good  things with  the                                                               
money-as well as  some wasteful boondoggles-but it  is not stable                                                               
as  demonstrated by  Alaska's present  deficit.  She pointed  out                                                               
that everybody else in this country  either pays an income tax or                                                               
a statewide sales tax, "so  don't believe this stuff about people                                                               
having to  leave the state." An  income tax is better  because it                                                               
affects  those most  able  to  pay the  most,  she  said, and  it                                                               
counters  the  effect  of  cutting   the  dividend,  which  is  a                                                               
necessary part  of restructuring  the permanent fund  but impacts                                                               
those at  the bottom of  the income scale  the most. She  and her                                                               
husband  are  both retired  from  government  jobs. "We  are  not                                                               
wealthy but believe  that a tax is the fairest  way to supplement                                                               
permanent fund earnings."  She said they may travel  less or wait                                                               
longer to  buy a new  car, but they  support the income  tax, not                                                               
only   because   it's   fair  but   because   they   have   three                                                               
granddaughters  who live  in  Alaska  and love  it.  They are  in                                                               
college  now and  will soon  be deciding  what they  will do  and                                                               
where they will  live. They want to live here,  but there must be                                                               
jobs. She  noted that there will  not be jobs if  the legislature                                                               
doesn't solve the  fiscal problems this year.  "These young women                                                               
and those like  them are essential to the future  of Alaska." She                                                               
said  education is  also critical  to the  future of  Alaska, and                                                               
paying income  tax to avoid  cutting education is  something that                                                               
many,  many  Alaskans are  willing  to  do.  She added  that  she                                                               
opposes  proposed cuts  as  there have  already  been deep  cuts,                                                               
including  cutting  the  job  of  one of  her  sons.  "We  should                                                               
continue to look for smart cuts,  but I fear for what Alaska life                                                               
will  be  like  if  the legislature  makes  much  deeper,  broad,                                                               
untargeted cuts."                                                                                                               
CHAIR COSTELLO  thanked Ms.  Nienhueser and  said that  the state                                                               
constitution  does not  allow for  a  dedicated fund,  so HB  115                                                               
represents an income tax that will go to the general fund.                                                                      
6:47:58 PM                                                                                                                    
SARAH MCCABE, Anchorage,  stated that she is in favor  of HB 115.                                                               
From  what she  has  heard  about the  budget  deficit, a  single                                                               
strategy will not work to fund  Alaska beyond the next few years.                                                               
There  needs  to be  several  sources  of revenue.  The  proposed                                                               
income tax is  progressive and reasonable, and it  would tax out-                                                               
of-state  workers  who use  services  and  facilities in  Alaska,                                                               
including roads, state troopers,  parks, government services, and                                                               
our carefully  managed fishery. Some  people say that  the income                                                               
tax  will discourage  people  from moving  to  Alaska or  staying                                                               
here. She disagreed and said that  several years ago she moved to                                                               
Texas,  another  state  without  an   income  tax,  and  she  was                                                               
astonished how  inexpensive housing  and other  necessities were,                                                               
but still  she chose to  return to Alaska.  She said many  of her                                                               
neighbors have  decided to  retire here,  because there  are many                                                               
reasons  to  stay or  leave  besides  the  cost of  living,  like                                                               
friends, career opportunities,  climate, activities, and thriving                                                               
communities.  She  said  she  supports  the  income  tax  because                                                               
Alaskans  must choose  to pay  for  services that  make Alaska  a                                                               
wonderful place  to live  and for  the sake  of one  another. She                                                               
requested  passing HB  115 as  part of  a coordinated  package of                                                               
revenue, (unclear), and expense reduction.                                                                                      
6:50:15 PM                                                                                                                    
SHANNA  ZUSPAN, Anchorage,  said HB  115  is a  critical part  of                                                               
enacting a  fiscal plan to remove  Alaska's economic uncertainty.                                                               
She supports an  income tax because of  education, economics, and                                                               
personal responsibility.  She was born  and raised in  Alaska and                                                               
is a  product of  the Anchorage  school district,  which prepared                                                               
her  for  a  successful  career.  Her and  her  husband  live  in                                                               
Anchorage  to  give  their children  the  same  opportunity,  she                                                               
explained. "Our schools  are our future," she added,  and "I want                                                               
competitive compensation for  our teachers." Economically, Alaska                                                               
can't keep going like this. As  a part owner of a small business,                                                               
she needs a  stable economic foundation. Her  business employs 15                                                               
professional  staff. It  exports its  services to  communities in                                                               
the Lower  48 and  reinvests its profits  here in  Anchorage. The                                                               
business pays well, she noted,  and it offers excellent benefits.                                                               
Last  year was  a good  year for  her business,  but she  has not                                                               
hired  anyone new  because of  uncertainty  on what  to base  its                                                               
growth  forecast on.  A business  association told  the committee                                                               
that small  businesses do not  support an income tax;  that's not                                                               
true  for her.  "We want  to grow,  but we  need to  know that  a                                                               
comprehensive fiscal  solution is  in the  works," she  stated. A                                                               
tax   is  also   about  personal   responsibility  and   personal                                                               
commitment to a better Alaska. She  said she spends her work days                                                               
helping  communities, and  the work  helps make  Alaska a  better                                                               
place.  She  does  not  spend   much  time  in  direct  political                                                               
advocacy, she  added, but  she is  here tonight  because it  is a                                                               
pivotal  moment  for Alaska.  "We  have  to accept  our  personal                                                               
responsibility to each other and  to Alaska," she added, and that                                                               
is why she supports HB 115.                                                                                                     
6:52:58 PM                                                                                                                    
CHRIS  BECK,  Anchorage, said  he  is  a  founding partner  of  a                                                               
successful small  business based in  Anchorage, and it  has grown                                                               
from  two  to 25  people  in  the  last  15 years.  His  business                                                               
provides consulting  services to  other small  businesses, Native                                                               
organizations, local  governments, and developers. He  said he is                                                               
on  the front  lines of  where cuts  to government  are affecting                                                               
people. Alaska must have a fair income  tax, and HB 115 is a good                                                               
place  to start.  He said  he strongly  believes that  continuing                                                               
cuts  to  government  are   directly  harming  Alaska's  economic                                                               
health.  Examples include  education and  transportation. Another                                                               
is the Alaska tourism industry.  Tourism brings almost $2 billion                                                               
each year and  supports one in eight Alaska jobs.  The last three                                                               
years the  state tourism  and marketing  budget was  chopped from                                                               
around $17  million to $5 million,  and, "now we're not  only the                                                               
49th state  to enter the union,  we're the 49th state  in tourism                                                               
marketing."  When  other  states  outspend  Alaska  and  get  the                                                               
customers, Alaska loses  the possibility to sustain  what we have                                                               
or to  grow. This proposed tax  would bring in about  $80 million                                                               
of new  money from people who  work here but live  elsewhere, but                                                               
adjustments in  the permanent  fund just  move around  money that                                                               
starts in Alaska. He said he  thinks Alaska has drifted away from                                                               
its values and spirit-the things  that we like to pride ourselves                                                               
on. "So many of us  talk about being self-sufficient, being self-                                                               
reliant, paying  for what we use,  but we don't actually  do that                                                               
in Alaska." He  said it is time  to get back to  those values and                                                               
pay a reasonable share of the services that we enjoy.                                                                           
6:55:35 PM                                                                                                                    
ANDY  HOLLEMAN,  Anchorage,  said  he is  newly  elected  to  the                                                               
Anchorage school  district board, but  he is speaking on  his own                                                               
behalf and is  in favor of HB 115. For  years Alaskans have faced                                                               
annual uncertainty  about when the  final budget will  happen and                                                               
what will be in it. It may be  what we're used to, but it is very                                                               
destructive and  very expensive,  he stated. A  lot of  effort is                                                               
spent revising  budgets, and the  uncertainty makes  retention of                                                               
talented people very difficult. You  need revenues that vary with                                                               
population growth  and with economic  activity, which  will bring                                                               
some  predictability   and  the  ability  to   manage  the  state                                                               
efficiently. The outflow of dollars  in the form of federal taxes                                                               
will be reduced, he stated.  There are no economically successful                                                               
states  that  don't  provide  good  services  to  citizens,  good                                                               
schools,  good  public  safety organization.  "We  have  to  grow                                                               
value; we  cannot hoard or cut  our way to prosperity."  He urged                                                               
the committee to  provide the state with a  sustainable budget by                                                               
implementing this income tax.                                                                                                   
6:56:45 PM                                                                                                                    
GREGORY ANDERSON,  Wasilla, said he is  just representing himself                                                               
and is against HB 115.  The legislature has spent Alaska's wealth                                                               
like a drunken sailor  for many years, and as soon  as there is a                                                               
downturn, legislators  try to seize the  opportunity to institute                                                               
new  taxes. An  income tax  will penalize  productive people  and                                                               
create a bureaucracy with new costs, he concluded.                                                                              
6:57:45 PM                                                                                                                    
HERMAN  MORGAN, Aniak,  said he  is from  rural Alaska  and would                                                               
like to  provide the rural perspective  on the budget and  how it                                                               
is being  handled. [An  income tax]  is not a  good idea  at this                                                               
time,  but any  other  time  it would  be  the perfect  solution.                                                               
Cutting the  permanent fund was  like a  flat tax, and  an income                                                               
tax  would have  been  good. People  look  for righteousness  and                                                               
honesty in government,  but it seems like it is  wrong to cut the                                                               
permanent  fund. In  Aniak,  the cuts  took  away $550,000.  That                                                               
money  could have  been spent  locally, and  the state  could get                                                               
some of it back in income  tax. The governor, before he ran, said                                                               
he wouldn't touch  our permanent fund. People like  Bob Herron in                                                               
the legislature  told people  to be  happy for  what you  get and                                                               
that they  didn't take  it all.  It is like  telling us  that "we                                                               
have to  spend your permanent fund  money, so we can  save it for                                                               
you." This doesn't make sense. In  the scripture it says, "He who                                                               
oppresses the poor insult their maker,  but he who honors him has                                                               
mercy on the  needy. Righteousness exalts a nation, but  sin is a                                                               
reproach  to any  people."  People  are poor  in  Alaska, and  by                                                               
taking  away their  permanent fund  like that,  it (unclear)  buy                                                               
things  for your  kids or  store for  the winter  or things  like                                                               
that.  He said  he would  support an  income tax  bill, but  only                                                               
after restoring  the PFD. That would  be a big boost  to Alaska's                                                               
economy. Be  honest with the  people you represent,  because when                                                               
this  is  all  over,  our maker  will  (unclear)  somebody  poor,                                                               
destitute, or hungry.  If you didn't help  them (unclear), that's                                                               
what  the bible  says. Don't  put another  burden on  us with  an                                                               
income  tax;  restore  the  permanent fund  first,  and  then  do                                                               
something  to  make  the  people  who come  here  pay  for  their                                                               
services, like  the fire  department and roads.  A lot  of people                                                               
who couldn't afford to pay, they  would not have to pay an income                                                               
tax. Don't send Alaska further down this road of destruction.                                                                   
7:01:56 PM                                                                                                                    
DAVE  PALMQUIST, Anchorage,  said he  is  a veteran  and a  third                                                               
generation  Alaskan. He  stated that  he  is opposed  to HB  115,                                                               
because Alaska already has a high  cost of living. Even if one of                                                               
the end  results was to  grab some of  the money from  people who                                                               
work  here and  leave  the  state, the  cost  would outweigh  the                                                               
benefit. He knows people who  own small businesses and sees their                                                               
struggles  every   day.  He  added   that  the   legislature  has                                                               
frivolously spent  a lot  of his  money, and  the bottom  line is                                                               
that there has  to be deep cuts. "We need  to stop this frivolous                                                               
spending  immediately,"  he said.  Services  cost  money, and  he                                                               
works hard  for his money, and  he doesn't want to  foot the bill                                                               
for people  being frivolous. If  this tax is  implemented, people                                                               
will leave  the state, but not  as much as when  people left when                                                               
the pipeline was completed. It will further harm the economy.                                                                   
7:04:04 PM                                                                                                                    
GEORGE PIERCE,  Kasilof, Alaska, said he  is representing himself                                                               
and that it will be hard  to beat William's testimony. The Senate                                                               
does  not want  an income  tax since  Alaska is  in a  recession.                                                               
"Well,  we're in  the same  recession and  you took  the people's                                                               
PFD, and that didn't bother you,"  he stated. An income tax would                                                               
capture  the last  revenue  of about  20  percent of  nonresident                                                               
employees  who  don't  contribute  to Alaska's  income  tax,  and                                                               
that's  called lost  revenue  to the  state,  he explained.  It's                                                               
revenue Alaska needs  to survive the so-called  recession, not to                                                               
mention it is  in a deficit. He said the  legislature should pass                                                               
an  income tax  and  then  come back  and  capture  all the  lost                                                               
revenue  from  the  many  exemptions we  give  to  nonprofits,  S                                                               
corporations,  and LLCs.  A survey  showed 64  percent of  voters                                                               
said to keep  the PFD intact and collect income  taxes or a sales                                                               
tax  to pay  for government  services. An  income tax  makes more                                                               
sense, as  it brings in  more revenue  to a badly  needed budget.                                                               
Every analyst and  expert told the committee what to  do to solve                                                               
this problem,  "but you  never listen to  this sound  advice," he                                                               
stated. Listen  to the voters-not special  interests-and vote yes                                                               
on  the  income tax.  Repeal  these  oil  tax credits,  he  said,                                                               
because that  is a  big problem. He  reminded the  committee that                                                               
Alaska will owe  the oil companies $1 billion  next year, "thanks                                                               
to you." A previous caller said  that 21 percent of Alaskans will                                                               
feel the effect of the income  tax, but he forgot to mention that                                                               
was  on  a  $75,000  income,  "so  do  your  job,  represent  the                                                               
Alaskans, and yes to an income tax."                                                                                            
7:06:48 PM                                                                                                                    
SUSAN  OPALKA, Girdwood,  said she  strongly  supports an  income                                                               
tax. Other have stated how she  feels, she said, and the tax will                                                               
capture money that goes out of  the state from people who are not                                                               
taxed. "I strongly support an income tax."                                                                                      
7:07:25 PM                                                                                                                    
JASON  JONES, Palmer,  thanked god  for conservative  Republicans                                                               
for holding the ground on  state spending and taxes. "Our biggest                                                               
problem  in  Alaska  is  our  tax-and-spend  governor  and  House                                                               
liberals." He said the schools can  get all the money on the face                                                               
of this earth, and they still  would be crying for more. The kids                                                               
would get a  better education if the schools  were privatized, he                                                               
added. Most  educators are liberals,  so don't worry  about their                                                               
pathetic votes.  No income  tax, no fuel  tax, fully  restore our                                                               
PFD, he said.                                                                                                                   
7:08:18 PM                                                                                                                    
TRISH MCDOUGALL, Houston,  Alaska, said her family  is in Alaska,                                                               
and her  daughter was born  here and  owns a small  business. She                                                               
told the  committee that she  has a combined knowledge  of pretty                                                               
much most  of the issues that  have been brought up,  because her                                                               
son-in-law works  in the oil  industry, her husband works  in the                                                               
auto industry,  her sister works  for a nonprofit, and  she works                                                               
in the health  care industry. Because of the  recession, she does                                                               
not  support   HB  115.  Personal  responsibility   "is  not  the                                                               
justification  here," she  said.  This is  the responsibility  of                                                               
elected  officials   to  manage   over-spending.  She   told  the                                                               
committee to "look in your own  house from the top down, and then                                                               
come  to us  with an  actual  plan that  is fiscally  responsible                                                               
across the  board equal  for all Alaskans."  She stated  that she                                                               
does not support anything in  the bill, whatsoever. It will break                                                               
the backbone of working Alaskans  regardless of how much goes out                                                               
of  the state.  "I  don't  think that  will  offset  what we  are                                                               
looking at as far as our deficit right now," she concluded.                                                                     
7:10:36 PM                                                                                                                    
RONALD  ALLEN,  Skwentna,  said  he  and his  wife  live  in  the                                                               
wilderness and have  a small farm and a very  low income. He said                                                               
he is a retired naval officer and  a Viet Nam veteran. He said he                                                               
is against  the income tax  in HB 115.  From what he  can figure,                                                               
there are 735,000  residents and only about  135,000 are working.                                                               
He  gets  social  security,  a  pension,  and  a  little  bit  of                                                               
(unclear).  President Franklin  Roosevelt created  a program  for                                                               
the  baby  boomers, and  he  said  he  wanted to  provide  social                                                               
security, so people could have  pride and dignity in their senior                                                               
years.  He said  he  went on  social security  in  2010 and  sold                                                               
everything he had and moved to  Skwentna, because both he and his                                                               
wife lost their jobs. "We've been  struggling, but if you have to                                                               
take  my  social  security  away  as a  Viet  Nam  veteran,  it's                                                               
disgraceful," he  said, but he  still has his pride  and dignity.                                                               
He stated  that he  farmed with his  grandfather in  Indiana, and                                                               
that is  what he  and his  wife are  trying to  do in  Alaska. He                                                               
built a 50-foot high tunnel,  and they are growing vegetables and                                                               
raising a few animals. He doesn't  see how an income tax is going                                                               
to work. "I'm  not sure what it  is, but I have an  idea, and you                                                               
probably  don't want  to hear  it."  He asked  everyone to  think                                                               
about the  people who  are struggling.  He said  he is  trying to                                                               
help people with his garden and his turkeys, but it is not easy.                                                                
7:14:21 PM                                                                                                                    
MIKE  COONS, Palmer,  said he  is speaking  for himself  and said                                                               
progress  equals socialism  and an  income tax  is socialism.  He                                                               
calculated what his  tax would be. For him and  his wife it would                                                               
be $954,  but each might  get $1,250 from  the PFD. If  they both                                                               
are not  given a  PFD, that  will cost them  $3,454. They  are on                                                               
fixed incomes  and will have  to set aside  $79 per month  to pay                                                               
their tax. He would set aside  $90, and that is $90 that Walmart,                                                               
Lowes, and gas stations will not  get. That is $90 not going into                                                               
businesses and  will cause the  loss of employees. That  means no                                                               
flights  to go  see  his  mom, which  costs  $600,  and at  least                                                               
another two  years to save  for a new ATV  [all-terrain vehicle],                                                               
which costs  about $20,000. Testimony  today stated that  16 more                                                               
state workers  offset the  74 state workers  that have  been pink                                                               
slipped. Regulations will  be about 200 pages.  The president and                                                               
Congress are cutting  taxes, he opined. Progressives  want to add                                                               
200 pages of regulations to support government; hell no.                                                                        
CHAIR  COSTELLO  noted that  over  150  Alaskans are  waiting  to                                                               
testify, and she urged witnesses to be brief.                                                                                   
7:17:10 PM                                                                                                                    
RICH  YOUNG, Eagle  River, suggested  putting emotions  aside and                                                               
looking at facts and science.  Science says any increase in taxes                                                               
reduces growth. One  percentage point cut in  personal income tax                                                               
raises the GDP [gross domestic  product] by 1.4 percent. He noted                                                               
a  website  that  shows  studies  supporting  that.  There  is  a                                                               
recession, and  the testifier before  him said that he  will have                                                               
to wait to buy a new SUV [sport  utility vehicle] or an ATV or to                                                               
spend  $100 at  Lowes. He  said  that will  affect the  Anchorage                                                               
economy  immediately.  "You want  to  take  $300 million  of  the                                                               
permanent fund away from the  economy, and then you're gonna take                                                               
$600  million, because  I'm going  to give  you (unclear)  of new                                                               
money, and you want to take  that out of the economy-$900 million                                                               
out  of the  economy of  the state  of Alaska  per year,  and you                                                               
don't see that  that's going to cause  a recession?" Unemployment                                                               
and people leaving  the state to find  work-he doesn't understand                                                               
how that science is good for Alaska.                                                                                            
7:18:43 PM                                                                                                                    
ROSELYNN  CACY, Anchorage,  said that  the permanent  fund versus                                                               
the income tax  divides Alaskans by income. "If I  make less than                                                               
$1,000 per pay  period, the permanent fund  dividend is important                                                               
and  significant  to  me,"  she  noted,  "especially  if  I  have                                                               
children."  If her  income was  doubled or  tripled or  ten times                                                               
that  amount, the  dividend becomes  much less  important and  an                                                               
income tax becomes more important.  The progressive tax structure                                                               
does the same. She suggested  removing the section where some pay                                                               
no tax. It  is an illusion. This group already  gave up more than                                                               
this  amount  in the  PFD  reduction,  she  said. There  are  two                                                               
natural places  to increase  a wage withholding.  The first  is a                                                               
half  percent increase  when the  state unemployment  withholding                                                               
ends,  she  stated,  "currently 198.50  of  tax  somewhere  under                                                               
$40,000."  The second  is a  "6.2 percent  that individuals  stop                                                               
paying in  social security  tax, about 118,000."  If a  5 percent                                                               
tax were withheld  at this point, a lot of  wage earners wouldn't                                                               
even notice. On line 13, page 1,  and lines 1-20 on page 2 of the                                                               
bill, if  taxable income  is under  $40,000, the  tax would  be 2                                                               
percent of the  amount. If the taxable income  is between $40,000                                                               
and  $120,000, the  tax would  be $800  plus 2.5  percent of  the                                                               
amount over $40,000, and if  the taxable income is over $120,000,                                                               
the  tax would  be  $2,000  plus 5  percent  of  the amount  over                                                               
$120,000. "Let's make it painless," she concluded.                                                                              
7:21:14 PM                                                                                                                    
BRINNA  WOJTALEWICZ,  Anchorage,  said  she  is  a  middle-school                                                               
special education teacher and currently  serving as the president                                                               
of  the   Anchorage  Education   Association.  She   thanked  the                                                               
committee and noted  that since 2014, Alaska's  fiscal crisis and                                                               
the uncertainty  for school districts  has had an  adverse impact                                                               
on  students  and  their  learning. For  the  last  three  years,                                                               
students have been  watching as their class size  gets bigger and                                                               
services  reduced.  "That's   why  I'm  asking  you   to  pass  a                                                               
comprehensive  fiscal plan  that includes  a broad-based  revenue                                                               
measure like  HB 115."  No educators  in Anchorage  have received                                                               
pink  slips yet,  she stated,  but  Anchorage has  lost over  100                                                               
positions. She said she has fielded  calls and emails in the past                                                               
couple  of  weeks  from  those  who  are  distressed  from  being                                                               
displaced from  their buildings,  and this  is what  happens when                                                               
positions are cut.  Some of these staff members have  been in the                                                               
same building  for years,  she explained.  It is  detrimental and                                                               
disruptive to  a classroom, and  it is happening now  without the                                                               
monumental cuts  in the Senate  proposal. "We cannot cut  our way                                                               
out of  the state fiscal  crisis," she stated. She  urged passage                                                               
of  HB 115.  She said  she  is gravely  concerned about  Alaska's                                                               
children; they  need a strong  message that they are  cared about                                                               
and valued.                                                                                                                     
7:23:13 PM                                                                                                                    
ORIN SEYBERT,  Anchorage, said he  is speaking for  himself, "but                                                               
myself also  includes my  seven kids,  18 grandkids,  and 30-some                                                               
great grandchildren, and even a  couple of great-greats. He urged                                                               
support  of  HB  115.  For  those people  who  have  a  knee-jerk                                                               
opposition to an  income tax, he asked them to  read the bill and                                                               
see how  much it  has changed  in the  last month  or two.  It is                                                               
easier  and easier  on  the low-income  people;  the dividend  is                                                               
exempt;  there's a  $4,000  exemption; and  it  derives the  most                                                               
money from the  high-income people, of which a lot  of his family                                                               
are. He  added that  the tax  will bring  in revenue  from people                                                               
making  our money  and  taking  it back  outside.  Don't let  the                                                               
Senate  hierarchy, particularly  the finance  committee, continue                                                               
the draconian cuts,  which are only making things  worse. He said                                                               
SB 26 is a  good start and he supports it,  but saying there will                                                               
be future  cuts, though  they don't know  where, and  the balance                                                               
can be made up with the  CBR-that's our savings. To depend on the                                                               
CBR to  fill the gap  is like homeowners burning  their furniture                                                               
to keep  the house warm  for another night. "Please  support this                                                               
bill," he concluded.                                                                                                            
7:25:35 PM                                                                                                                    
JANA PEIRCE, Fairbanks, said she  is speaking for herself and for                                                               
her  husband. Like  many  Alaskans, they  support  an income  tax                                                               
along with a  disciplined use of permanent fund  earnings and oil                                                               
tax credit reform  as a balanced approach for  solving the fiscal                                                               
crisis. "I  don't understand why  people think we  shouldn't have                                                               
to pay  anything for  the government services  we use."  She said                                                               
she  thinks it  is irresponsible  to encourage  this thinking  by                                                               
continuing to  spread the fairy  tale that there is  enough waste                                                               
in government that  after two years of deep cuts,  Alaska can cut                                                               
its way  out of this without  eating away at the  quality of life                                                               
in Alaska.  There is not  $2.9 billion  in waste; if  there were,                                                               
the  Senate majority  would not  be proposing  deep cuts  to K-12                                                               
education, the  university, and even  pioneer homes with  no plan                                                               
for  where those  seniors would  go.  Even with  those cuts,  the                                                               
Senate  majority's  plan  doesn't   close  the  fiscal  gap,  she                                                               
explained. The income  tax that has been proposed,  she added, is                                                               
modest and would  be a very small price to  pay for the privilege                                                               
of living  in this beautiful  and culturally rich  state. Several                                                               
have warned that  some people would leave the  state because they                                                               
don't  want to  pay for  the government  services they  use. That                                                               
would be their  choice, she said, but she  expressed more concern                                                               
for the  people who will  be forced to  leave if they  lose their                                                               
jobs  to  the economic  impact  of  continued deep  and  reckless                                                               
budget cuts.                                                                                                                    
7:27:24 PM                                                                                                                    
MARYLEE  GUTHRIE, Fairbanks,  said she  has been  in Alaska  long                                                               
enough to  enjoy the  full complement of  dividends and  to enjoy                                                               
the even larger  financial benefit to my family  of the (unclear)                                                               
provided by  the petroleum industry,  and she supports HB  115 or                                                               
an improved  version. After following state  budgets and revenues                                                               
closely  for  many years,  she  sees  that the  alternative,  the                                                               
Senate majority  plan, is  to downsize  Alaska by  downsizing its                                                               
fiscal  capital,  human  capital, and  infrastructure,  which  is                                                               
downsizing the  future, she  said. Public  capital is  a uniquely                                                               
Alaskan legacy, and it is a  uniquely Alaska need. "We're kind of                                                               
like Lake  Wobegon, where  all the kids  are above  average." She                                                               
noted that  all the costs as  a state are way  above average, the                                                               
tax  base  without  petroleum  is  way  below  average,  and  the                                                               
investment reserves  are crucial to Alaska's  future. The premise                                                               
is that a lot of people  are meeting this huge ambition in Alaska                                                               
where surely  government can  be cut  another 20  percent without                                                               
serious  harm;  surely,  we  have  enough  savings  that  we  can                                                               
liquidate some of our capital,  and surely the future will refill                                                               
those  coffers.   "Those  premises   are  unsound   and  fiscally                                                               
reckless," she stated.                                                                                                          
7:29:21 PM                                                                                                                    
BILL WARREN, Nikiski,  said he is a 66-year  resident and retired                                                               
from  the pipefitters  local 357.  Alaska has  been very  good to                                                               
him, and he  favors HB 115. The head  tax on the PFD is  a tax on                                                               
babies through seniors, he added, and  it is terrible. There is a                                                               
$3 billion budget  crisis that needs to be fixed.  Alaska needs a                                                               
state income  tax, because the  two taxes  would tax the  low and                                                               
high-income  citizens and  the state  would  receive $85  million                                                               
from  nonresident workers.  In other  words, "you  would tax  the                                                               
poor folks  and the fat cats  and the people in  between-it would                                                               
be fair." He  added that without balancing the  budget this year,                                                               
the  legislature   will  instill   fear  and   uncertainty  among                                                               
Alaskans, resulting in very high anger.                                                                                         
7:30:39 PM                                                                                                                    
DAVID BRIGHTON,  Kenai, said he  is the father of  three students                                                               
and  is  a  special  education teacher  and  president  of  Kenai                                                               
Peninsula  Education Association.  He thanked  the committee  and                                                               
encouraged members  to pass HB  115. It is controversial,  and no                                                               
one like taxes, but Alaska is  the only state that has neither an                                                               
income or a sales tax. "I  enjoyed the days when oil revenue paid                                                               
for services that we all enjoy," but  it is now time to act. Some                                                               
senators have said that they prefer  the sales tax over an income                                                               
tax, but  there is  no sales  tax bill,  and the  legislature has                                                               
taken too  long to address  the budget deficit, he  cautioned. He                                                               
congratulated  it for  cutting the  budget;  the reductions  were                                                               
substantial and an important step.  While sensible reductions and                                                               
efficiencies should  be sought,  the big  cost savings  have been                                                               
found, and  Alaska needs  to increase  its revenue  and diversify                                                               
it. He said  he supports the POMV [percent of  market value] as a                                                               
big step  in the right  direction, and  he has enjoyed  the years                                                               
that he  got a dividend,  but "we  can't afford them,  and $1,000                                                               
per year is enough." He said  he does not want further reductions                                                               
in  services.  A  5-percent  cut  in  schools  would  affect  his                                                               
children's  education,  as the  Kenai  school  district would  be                                                               
forced to  cut 50  teachers-over 8 percent  of current  staff. It                                                               
would   force  the   board  to   consider  cutting   programs  or                                                               
drastically  increasing  class  size,  and that  would  harm  the                                                               
education of  the children.  "My youngest son  will never  have a                                                               
second  chance at  second grade,"  he  stated. Get  it right  the                                                               
first time by fully funding the budget for K-12.                                                                                
7:32:50 PM                                                                                                                    
RACHEL NEUENDORF, Soldotna, said  she testified last year against                                                               
an income  tax and still opposes  the burden of a  tax on working                                                               
people. She  asked how much it  will cost to implement  a tax. It                                                               
will create  another inefficient bureaucracy and  makes no sense,                                                               
she stated. She  has not heard how much it  will cost, but adding                                                               
more government is never the answer  to a budget deficit. "If you                                                               
really want  to stifle the  already struggling economy,  then add                                                               
this income  tax," she  opined. People would  leave. Why  stay in                                                               
this state with a high cost  of living, high unemployment, and an                                                               
income tax? How can  you ask people to live on  less? She said to                                                               
continue to  make cuts. "Let  me be very  clear; they need  to be                                                               
dramatic," she said.  It is crazy that Alaska  is asking Alaskans                                                               
to do  with less but can't  seem to make tough  choices. She told                                                               
the  legislature to  have the  courage  to cut  all programs  not                                                               
guaranteed   by  the   Alaska   Constitution.  The   constitution                                                               
guarantees public education, safety,  and welfare, and this broad                                                               
definition has allowed  for Alaska to be a  social welfare state,                                                               
and the  state cannot afford  it. It is  time to assess  the need                                                               
and funding of  programs. "If you must take  money, then continue                                                               
to consider  the PFD  like you  have." She said  she is  tired of                                                               
hearing that  Alaska has  the lowest tax  burden in  the country,                                                               
while  it has  the entitlement  of the  PFD. All  Alaskans should                                                               
have to shoulder  the responsibility to fund  the government. She                                                               
told the  committee to consider taxing  nonresidents and tourists                                                               
as a start, but don't ask for money from working Alaskans.                                                                      
7:34:49 PM                                                                                                                    
FRED  STURMAN, Kenai,  said he  is against  this tax.  Kenai city                                                               
said  that it  was "$500,000  short of  sales tax,"  and that  is                                                               
approximately $20 million  that was not spent in  the city limits                                                               
this last  year. He said he  spoke with a business  owner who cut                                                               
his work force  by 20 percent. He didn't lay  anybody off but put                                                               
them  on four-day  work  weeks,  a good  policy  to consider  for                                                               
government employees. He spoke with  another man in Kenai who cut                                                               
his force by  20 percent, and as  soon as the summer  is over, he                                                               
would cut another 10 to 12  percent. He said he talked to someone                                                               
who was packing  up to leave as  soon as school was  out, and her                                                               
husband has already left to find  a job. They have seven kids and                                                               
are going to  be leaving. "And you talk about  taxing the out-of-                                                               
state people;  we just lost  9,000 jobs  on the North  Slope," he                                                               
said, and "half of them people  lived outside, or more." He noted                                                               
that 60  percent of  the people  on the  Slope live  outside, and                                                               
they got  laid off  too. It  wasn't just  Alaskans that  got laid                                                               
off, he explained.  He said to cut taxes, "and  I don't think you                                                               
should  consider   giving  another  3.5  percent   raise  to  the                                                               
employees this year, and make them pay their own health care."                                                                  
CHAIR  COSTELLO noted  that there  are  many who  are waiting  to                                                               
speak,  and some  have already  left.  She said  that people  can                                                               
provide written testimony.                                                                                                      
7:37:05 PM                                                                                                                    
MICHAEL ILLG, Homer,  said he supports HB  115, symbolically, the                                                               
"education funding  act." The tax  is about the future  of Alaska                                                               
and  putting kids  first. "We  need this  income tax  to pay  for                                                               
education," he said. He said Alaska  cannot just focus on what is                                                               
happening  inside the  classroom,  but the  roles  of schools  go                                                               
beyond standardized  tests. It is  more about  the relationships,                                                               
the people they connect with,  he stated, and the opportunity for                                                               
betterment. To continue  to kick the can down the  road with less                                                               
money for  schools is going to  be a hardship for  many families.                                                               
"We're  talking hardship  for children;  we simply  cannot afford                                                               
not  to  implement  this  tax,"   he  added.  He  encouraged  the                                                               
committee to look  at public education from a  different point of                                                               
view, rise above party affiliation,  and ask themselves what they                                                               
believe is the best thing for  the kids and the future of Alaska.                                                               
"Look at  public education as  a public safety issue,"  he urged.                                                               
The better kids are in the  classroom, the better they will be as                                                               
Alaskans, he concluded.                                                                                                         
7:39:30 PM                                                                                                                    
KATE  FINN,  Anchor Point,  said  she  agrees with  the  previous                                                               
speaker to  focus on education.  There is no dedicated  fund, but                                                               
this is an  education tax. She said she just  returned from China                                                               
where there is a 95 percent  literacy rate. The United States has                                                               
86 percent literacy, with 32  million people who cannot read, she                                                               
reported. The Literacy Council of  Alaska reports that 43 percent                                                               
of  the lowest  literacy people  live  in total  poverty, and  17                                                               
percent receive food stamps, and 70  percent have no jobs or only                                                               
part-time  jobs.   There  is  nothing  more   critical  than  the                                                               
education  of  Alaska's children,  she  opined.  Russia has  99.9                                                               
percent literacy;  Cuba has 99.8  percent literacy. "What  are we                                                               
doing when we don't focus  our attention on education?" Education                                                               
is not  Socialism, it  is just  socially responsible,  she added.                                                               
She urged  passing HB 115, capping  the PFD at $1,000  or $1,200,                                                               
and repealing  gas tax credits-all  in the name of  balancing the                                                               
budget, which must be done now.                                                                                                 
7:41:46 PM                                                                                                                    
DUANE CHRISTENSEN,  Anchor Point, noted  that he is either  in an                                                               
alien universe  or still in Anchor  Point. He said he  is opposed                                                               
to HB  115, and he has  heard the same arguments  about education                                                               
every  year. He  has lived  in Anchor  Point from  the time  when                                                               
Alaska wasn't a state to the time  it did not have an income tax.                                                               
Last year,  9,100 jobs  were lost, and  the projection  is 12,000                                                               
this year.  The projected income  from the  tax at $8  million is                                                               
not going  to balance  the budget,  "so you're  going to  have to                                                               
look elsewhere anyway."  He said he has not  heard anything about                                                               
cutting  this stupid  boondoggle  gasline project,  which is  not                                                               
going to  go anywhere. It  doesn't pencil out, he  explained, and                                                               
it has never penciled out. He  received a letter from "one of you                                                               
senators," and the context of  the letter was ludicrous, claiming                                                               
that this is sustainable, "and it  is not." He has been trying to                                                               
work his way to retirement for  years, "and if this goes through,                                                               
then that just  shoots that in the foot."  He encouraged senators                                                               
to stand  ground. Government doesn't create  wealth. The senators                                                               
are the thin line against tearing apart the future, he said.                                                                    
7:44:08 PM                                                                                                                    
DAN BOONE,  Homer, said Alaska needs  to broaden its tax  base so                                                               
everyone  has  skin  in  the  game.  Everyone  appreciates  well-                                                               
functioning  and  efficient   government,  good  schools,  public                                                               
safety, and well-maintained roads. We  just don't like paying for                                                               
it. Not paying, he said, has  worked for nearly 40 years, but now                                                               
we  must start  bearing  part  of that  burden.  First, he  said,                                                               
Alaska needs  to revise  oil taxes  so that  there is  a positive                                                               
cash flow from every barrel of  oil that flows down the pipeline.                                                               
Second, there needs  to be a cap  on the PFD; $1,200  is a little                                                               
more than  the historic  average and  is a  nice $100  per month.                                                               
Third, Alaska  should implement a  statewide income tax,  and the                                                               
easiest  means  would be  a  small  percentage of  one's  federal                                                               
income  tax. That  would capture  money  from those  who earn  an                                                               
income in  Alaska but choose  to live outside  and, consequently,                                                               
don't spend much  of their income here. He suggested  a few small                                                               
adjustments, such  as increasing  fuel taxes and  changing senior                                                               
exemptions,  such as  free auto  and hunting  licenses. He  noted                                                               
that  he is  a senior  and would  be impacted.  None of  this tax                                                               
restructuring is  particularly pleasant,  he pointed out,  but it                                                               
is  absolutely necessary  for the  long-term fiscal  stability of                                                               
the state. He urged the committee to pass HB 115.                                                                               
7:45:47 PM                                                                                                                    
CLYDE BOYER JR., Homer, said  he represents himself and his wife,                                                               
Vivian. He  is a  retired certified public  accountant and  had a                                                               
small  business  and  saw  no real  problems  suffered  by  small                                                               
business clients during  the time that Alaska had  a state income                                                               
tax. He said he is in favor of  an Alaskan income tax to fund the                                                               
important services provided  by the state. "Our  citizens need to                                                               
step up  and help," he  added. Alaskans currently pay  nothing to                                                               
finance the state, and with the  income tax, Alaska will still be                                                               
close to  the state with  the lowest  taxes on citizens.  He said                                                               
Alaska needs to  continue to have excellent education  and to not                                                               
let its bond rating drop again.  He supports adjusting the PFD as                                                               
an interim measure and hopes that  the tax credits offered to the                                                               
oil  industry will  be reduced  to  help balance  the budget.  He                                                               
reiterated his support of HB 115.                                                                                               
7:47:15 PM                                                                                                                    
AMY  BOLLENBACH,   Homer,  said  she  agrees   with  Mr.  Boyer's                                                               
testimony and  is very  much in  favor of HB  115, because  it is                                                               
fairer to  low-income citizens and  provides money  for important                                                               
services, like  education. She  opined that  Kate Finn  had great                                                               
comments on  Alaska's poor  reading rates  in comparison  to some                                                               
much  poorer countries.  "We can't  hurt  children because  we're                                                               
afraid to  have an income  tax," she  added. She lived  in Alaska                                                               
many years when there was an  income tax, and one year, 1964, she                                                               
was  living in  a basement  with her  husband and  "theoretically                                                               
building  a house."  Part of  the  structure was  damaged in  the                                                               
earthquake, and the  well quit giving water, so they  were in bad                                                               
straights. "We were  worried about doing our  federal income tax,                                                               
but we  had so many deductions  from my illnesses that  it wasn't                                                               
so bad,  and then we  suddenly thought,  oh, we forgot  the state                                                               
income tax."  Well, it  was only about  $250. Almost  all middle-                                                               
income people and  upper-income people can afford  $250, so let's                                                               
not throw away our children's future for a few hundred dollars.                                                                 
CHAIR COSTELLO  said there are  still over 100 people  waiting in                                                               
various locations across the state.                                                                                             
7:49:24 PM                                                                                                                    
GARVIN BUCERIA,  Palmer, said he  is opposed  to HB 115  and top-                                                               
down  economics that  involves government  funding and  excessive                                                               
social  programs.  Governor  Walker  has  irresponsibly  cut  the                                                               
government-funded  PFD program  and rewarded  state workers  with                                                               
salary  increases when  there  have been  reductions  in the  oil                                                               
industry when the  government failed to pay the  incentives in SB                                                               
21, by promoting an untimely  rail link with Canada, by promoting                                                               
a gas  pipeline and  its offices and  staff, and  by perpetuating                                                               
the funding of  the Knik Arm crossing. "Obviously,  I support the                                                               
bottom-up  economic view  that supports  private enterprise,"  he                                                               
averred. He thanked the committee  for not supporting "House bill                                                               
majority  legislation." He  doesn't  relish  sharing his  limited                                                               
income with a  growing workforce. The objective  of the committee                                                               
should be to maintain current  Permanent Fund Corporation returns                                                               
without  changing its  present structure.  The folio  was up  4.5                                                               
percent for  the first  half of  FY17, and  between April  21 and                                                               
April 25,  the permanent fund  gained $497.5 million,  he stated.                                                               
Passage  of SB  21 increased  production on  the North  Slope. He                                                               
said to accelerate new discoveries  where the government provides                                                               
incentives to make  them two to three years away  from linking to                                                               
the  trans-Alaska pipeline.  "Reduce  this budget,"  he said.  He                                                               
urged the committee  to use the constitutional  budget reserve to                                                               
fund a  reduced budget. So  far, it  is not sustainable,  but use                                                               
it, and,  yes, numerous special  legislative slush funds  to fund                                                               
government. Don't cave to the House majority, he added.                                                                         
7:51:43 PM                                                                                                                    
STEVE  ST.  CLAIR,  Wasilla,  said  he  opposes  HB  115;  it  is                                                               
dishonest to  put education anywhere  in the title, but  it seems                                                               
that everyone is talking about  education. The intent of the bill                                                               
is  to generate  new  revenue to  continue  wasteful spending  of                                                               
government. "If you  want to find revenue, there  are many places                                                               
in the  budget to find them,  such as $300 million  of funded and                                                               
unfunded positions,"  funded positions  that are not  filled, and                                                               
$250  million of  optional Medicaid  services. He  referred to  a                                                               
budget he  produced a couple  of years ago.  He said he  found 85                                                               
percent of the revenue that the  committee says they need, and it                                                               
took him  less than a  90-day session.  He said no  teachers were                                                               
fired. An income  tax deters people from working.  His family has                                                               
decided that it  is too expensive to work. A  family of four with                                                               
an  income of  $50,000 will  see  its income  reduced 8  percent,                                                               
which  includes the  loss of  the PFD  and a  $210 state  tax. He                                                               
explained  that he  is  willing  to pay  his  fair  share if  the                                                               
government cuts its budget less  than 1 percent. These people who                                                               
are saying deep  cuts, not happening. Most people  who support an                                                               
income  tax  work for  the  government  or  are suckling  on  the                                                               
government udder, he  stated. Looking at fiscal note  number 2 on                                                               
this bill, it  shows that four employees will be  hired this year                                                               
and 37  employees in 2019 and  60 employees in 2020.  "For all of                                                               
you sitting there  that wanted to reduce the  size of government,                                                               
if  you  support this  bill,  you're  not  reducing the  size  of                                                               
government." He urged a no vote.                                                                                                
7:53:48 PM                                                                                                                    
ABBY  ST. CLAIR,  Wasilla,  said  she opposes  HB  115. She  said                                                               
legislators  have been  elected  to keep  her  best interests  at                                                               
heart,  not  to  increase  the government's  bank  account.  "You                                                               
should be  paying the bills  required by the  state constitution,                                                               
then prioritizing  the additional  bills," she  stated. A  way to                                                               
cut  costs would  be to  stop funding  "those unfilled  positions                                                               
throughout  the  entire state,"  which  is  wasting $300  million                                                               
annually,  which  she  learned  about  from  a  Mission  Critical                                                               
meeting. Another option to save  money would be to eliminate some                                                               
Medicaid  services,  she said.  "We  cannot  afford the  Cadillac                                                               
plan."  These cuts  would  provide  the same  money  equal to  an                                                               
income tax. One out of every  ten Alaskans are veterans and many,                                                               
like herself,  live on a  fixed budget  and would be  required to                                                               
pay additional  taxes, even  though she  lives below  the poverty                                                               
line.  She reminded  the committee  that many  other states  have                                                               
tried  this and  lost revenue  and lost  a significant  number of                                                               
residents, because they can't or won't  pay it. "Is this what you                                                               
want  for  Alaska?"  She  said   Alaska  is  suffering  from  the                                                               
recession, and  there are other  options. She told  the committee                                                               
to  listen to  the experts  like United  for Liberty  and Mission                                                               
7:55:28 PM                                                                                                                    
PETER MORGAN,  Palmer, said he  represents himself and  his wife,                                                               
who does  not know  that he  is testifying. He  said he  does not                                                               
want  to pay  three  to  four hundred  dollars  a  month when  he                                                               
shouldn't have  to. He  said he  doesn't want to  pay when  he is                                                               
retired. He doesn't want to pay  taxes on his social security. He                                                               
doesn't want  to pay taxes on  his IRA, Roth, and  401K. He added                                                               
that he doesn't  want his children to be paying  any taxes on the                                                               
things that  are left  to them  when he is  gone. "It  is totally                                                               
unfair."  The money  is  there now  to take  care  of this.  "Jay                                                               
Hammond, everybody  said, he's  a great  guy and  he did  a great                                                               
thing, and he did."  He said he has spent every  dime of his PFD.                                                               
He asked  if anyone thought, at  the time, that 20  to 30 percent                                                               
of that  PFD would  be shoveled back  to the  federal government.                                                               
What  a waste!  Federal  money  never did  anything  to help  the                                                               
state. The  coolest thing  about the PFD  is everyone  shared the                                                               
same  amount, and  things are  different now,  and we  should all                                                               
share the  weight of the  burden of government. Cutting  needs to                                                               
happen,  but this  should  not be  put back  on  people who  have                                                               
earned  money in  this state.  There is  plenty of  money in  the                                                               
permanent fund.  Although unpopular,  why not direct  that money,                                                               
just like we would  do if it were a PDF check,  to taking care of                                                               
these  bills,  he said,  and  we  would  stop  wasting 20  to  30                                                               
percent, and the rest of us would  be able to make it. He said he                                                               
applauds  his majority  in the  Senate  for hanging  on for  dear                                                               
life. The majority in the House  is just acting like lemmings, he                                                               
told the  committee. They  are not thinking  about what  is going                                                               
down.  He  urged the  committee  to  not  pass  HB 115.  He  said                                                               
Governor Hammond did not think  about the money Alaskans would be                                                               
shoveling to the federal government out of the PFD.                                                                             
7:58:19 PM                                                                                                                    
BETH RIVEST,  Juneau, said she  is a  mother of three  and worked                                                               
for  the  Coastal  Management Program,  stayed  home,  started  a                                                               
business, and  now works for  a charter school.  Long-term fiscal                                                               
planning requires  changes to Alaska's revenue  and spending. She                                                               
said she  supports HB 115,  with some work,  as it will  help all                                                               
Alaskans. A family she knows is  moving; one member of the family                                                               
works  at the  mine and  plans on  working two  weeks and  flying                                                               
south each  time. That income  earned in Alaska will  not support                                                               
the  state. She  said she  believes  in humanity,  and there  are                                                               
people who need  to be cared for. It is  the most vulnerable: the                                                               
youth who  need education, the  elderly, all sorts of  folks need                                                               
our support.  She noted that  she has  two people staying  at her                                                               
house  for the  summer working  in tourism.  They are  from North                                                               
Carolina, and  they actually  pay North  Carolina state  taxes on                                                               
the  money earned  in  Alaska. "That  just  doesn't make  sense."                                                               
There  needs to  be a  revenue source  and it  should include  an                                                               
income tax. She said she has  kids in the public school, and some                                                               
kids don't fit  the school system and need  more visual learning.                                                               
The  uncertainty of  a stable  fiscal plan  is difficult  for the                                                               
most vulnerable kids.                                                                                                           
8:02:26 PM                                                                                                                    
At ease.                                                                                                                        
8:03:06 PM                                                                                                                    
CHAIR COSTELLO  called the committee  back to order.  She thanked                                                               
everyone for their civility.                                                                                                    
PAUL  KENDALL, Anchorage,  asked  for his  stolen permanent  fund                                                               
money with  interest and damages,  and he asked the  committee to                                                               
travel to Anchorage to deal  with the public employee unions. "It                                                               
seems to me they keep bringing  up services," he said. There is a                                                               
thing called  essential services  and a thing  called priorities.                                                               
"If you think I'm  going to pay a school teacher  40 grand a year                                                               
to come  up here, plus  bennies, to hang  out for nine  months so                                                               
that I can raise  her kids while she's not a  mommy, and they can                                                               
teach my  children other  things that are  of more  value, you're                                                               
dead wrong." He  challenged the committee to  a public discussion                                                               
about services. Many economies are  being sustained by the shared                                                               
wealth of the state, he said,  and there needs to be a discussion                                                               
about  whose money  is a  shared  resource. "They've  constructed                                                               
economies  due to  the  richness of  the  oil companies.  They've                                                               
constructed false economies,  and the minute you pull  one of the                                                               
economies  out, the  whole thing  tumbles,"  he explained.  Right                                                               
now, there are two things ready  to fall, which are PERS and TRS.                                                               
It has to stop now, he said. "You  have to buy them out. You have                                                               
to stop the  public employees' union. That's  communism. You have                                                               
to reconstruct  your public employee  payroll. We do not  pay you                                                               
to retire;  we pay you if  you work, and then  you purchase those                                                               
other things." Public education  is embarrassingly detrimental to                                                               
our  children, he  noted. The  state  can no  longer sustain  the                                                               
opportunists  who are  mobilizing  the resources  given to  them.                                                               
They are using  their skills to go against the  public, he added,                                                               
and "we cannot  sustain that." He thanked  people for testifying,                                                               
but  he wants  to  get back  to  unhurried, engaging  discussions                                                               
instead of  compressed pop-up government  moments. He said  he is                                                               
disappointed because  he thought  Alaska would be  different than                                                               
the Lower 48 and the San Francisco boys.                                                                                        
8:07:26 PM                                                                                                                    
KEVIN MCCABE, Big Lake, said he  is retired from the military and                                                               
(unclear audio). If any income  tax is imposed on him, especially                                                               
the one in  HB 115, he will (unclear) leaving  the state, because                                                               
over $7,000 will be removed from  the coffers by the tax. The PFD                                                               
is money constitutionally provided  to the people (unclear). This                                                               
is redistribution  of wealth on  a rather large scale.  He stated                                                               
that  HB  115 is  not,  by  any  definition, a  broad-based  tax.                                                               
Alaska's  problem, he  opined, is  that neither  legislative body                                                               
nor the governor proposed significant  cuts. The state has enough                                                               
money without  removing the  peoples' PFD  or instituting  a tax.                                                               
The policy of many departments is  to fund positions that are not                                                               
filled, otherwise known as a  slush fund, he explained, and other                                                               
niceties  such  as  the  Knik  Arm  Bridge  Toll  Authority,  the                                                               
legislative chef, and  the mail room, which  are unnecessary. The                                                               
departmental mission creep is huge  and has not been addressed by                                                               
any  legislative body  or the  governor. "Consider  the Anchorage                                                               
school district  where 44 percent  of the budget  apparently goes                                                               
to  the administration."  He  asked if  the  legislature had  any                                                               
control over the use of state  funds. There is a spending problem                                                               
and not  a revenue problem.  House Bill  115 is not  an education                                                               
funding act, it is a progressive  income tax by the rogue section                                                               
of  the legislature  and a  governor with  a pipeline  dream. The                                                               
loudly proclaimed budget  cuts are smoke and  mirrors, he stated.                                                               
The cuts are  not enough; there needs to be  another $200 million                                                               
in cuts  this year alone,  he stated. (Unclear.) He  reminded the                                                               
senators he voted  to move the capital to Anchorage  or closer to                                                               
"the  people."  He  wants  the  same access  to  the  capital  as                                                               
lobbyists, he said.                                                                                                             
8:10:49 PM                                                                                                                    
LAURA BONNER,  Anchorage, said she  is retired and plans  to stay                                                               
in  Alaska and  has  never  been employed  by  the  state or  any                                                               
school.  Economist  Gunnar  Knapp  said  Alaska  will  experience                                                               
impacts  of  lower  oil  revenues,  and  not  making  significant                                                               
progress  toward  closing  the   deficit  will  have  significant                                                               
negative consequences.  Last year  the legislature  made progress                                                               
with cuts only,  she noted, cutting 40 percent  since 2014. There                                                               
are not  many places left  to cut, and the  negative consequences                                                               
are already occurring, she said,  with the reduction of troopers,                                                               
job losses, costs shifted to  local governments, services cut for                                                               
vulnerable  Alaskans, less  maintenance  of the  roads, and  less                                                               
funding  for  education.  Cuts  to  public  education  will  have                                                               
impacts  for generations,  she added,  including  the quality  of                                                               
future employees,  innovation, research, and more  challenges for                                                               
public safety  personnel. Now is  the time to  consider revenues,                                                               
including  a  progressive  income  tax.  Restructuring  the  PFD,                                                               
changing  the  tax  code,  prudent   cuts  in  the  budgets,  and                                                               
implementing an income tax will  give Alaska fiscal stability for                                                               
years to come. "We need all four parts," she added.                                                                             
8:13:21 PM                                                                                                                    
DAVID NEES,  Anchorage, said  he is  testifying for  himself, his                                                               
son, and his wife. In 2002  Tony Knowles introduced an income tax                                                               
that was similar  and was rejected by the Senate,  19-0, he said.                                                               
A  progressive income  tax  is  the worst,  because  it seeks  to                                                               
distribute money from  the rich to the poor. A  flat tax, like in                                                               
North Carolina, taxes every resident.  A 1982 ISER report pointed                                                               
out that Alaska's  high income means that Alaskans  pay more than                                                               
its  fair share  of federal  income  tax. Earning  so much  means                                                               
Alaskans  pay 25  percent more,  he stated.  In 2015,  the median                                                               
family income in the state was  the second highest in the nation,                                                               
which  leads to  higher taxes,  and this  bill will  add to  that                                                               
burden. The  name of the  act violates  Article 9, Section  7, of                                                               
the  Alaska Constitution,  which  prohibits  dedicated funds,  he                                                               
explained. "If  they want  a dedicated  fund for  education, they                                                               
can  do  it  like  we  did  with  the  PFD,"  he  said,  with  an                                                               
initiative. He said he is opposed  to HB 115, "no matter what you                                                               
call it, because it's lipstick on a pig."                                                                                       
8:15:54 PM                                                                                                                    
ELLIE GOTTSTEIN, Anchorage, said  she is representing herself and                                                               
is one  of Senator Meyer's  constituents. Alaska needs to  find a                                                               
way to fund  what matters. For her, she said,  education is a top                                                               
priority, but  the bottom line  is that to sustain  Alaska, there                                                               
needs to  be a long-term plan.  That is why she  supports HB 115.                                                               
"We  need  to  diversify  state revenue  to  fund  vital  health,                                                               
safety,   and  education   needs,  which   is  mandated   by  our                                                               
constitution," she  said. You  get what  you pay  for, and  it is                                                               
time to step up and pay for it,  she added. Income tax is the way                                                               
to ensure continuous funding for  the things that matter, and the                                                               
Senate  fiscal plan  of using  only the  permanent fund  earnings                                                               
leaves  a  deficit  of  hundreds   of  millions  of  dollars  and                                                               
disproportionally hurts  lower income  and rural  populations. An                                                               
income  tax will  help balance  the impacts  of new  revenues and                                                               
will  ensure that  nonresidents contribute  to the  solution, she                                                               
added.  Without  a  diversified tax,  the  state  cannot  support                                                               
future growth  and expansion. As  the economy grows, so  does the                                                               
population.  Without a  broad-based tax,  the state  will not  be                                                               
able to support  the future we want. This is  about the longevity                                                               
of Alaska, she concluded.                                                                                                       
8:17:44 PM                                                                                                                    
BEN MULLIGAN, Anchorage,  said he feels that Alaska  is not ready                                                               
for  a broad-based  tax. He  said he  understands, probably  more                                                               
than  the  average  person,  that the  legislature  has  cut  the                                                               
budget,  but the  government is  inefficient. There  are ways  to                                                               
become more  efficient and free  up money  to do the  things that                                                               
are a priority, he stated.  To have faith in government spending,                                                               
he  would like  to  see  a spending  cap.  "Having  that sort  of                                                               
control on government  spending through the years  would give me,                                                               
I would say,  a little more faith in knowing  that money is being                                                               
well-spent wisely,  knowing that  you couldn't just  increase the                                                               
budget exponentially given the sort  of income that's coming in."                                                               
He said, until he sees that, he will oppose HB 115.                                                                             
8:19:00 PM                                                                                                                    
CURTIS THAYER, President, Alaska  Chamber of Commerce, Anchorage,                                                               
said his group  is opposed to HB 115. The  chamber was founded in                                                               
1952 and  is the voice of  small and large businesses.  Alaska is                                                               
blessed with  the resources needed  to fix its problems,  and the                                                               
financial  reserves are  under strain,  and, he  said, "we  can't                                                               
live off  savings forever." The  resources are  considerable, and                                                               
by working  together Alaska can  close the fiscal gap  by cutting                                                               
the cost  of government, living  within its  means, restructuring                                                               
the permanent fund  to protect the dividend,  using the earnings,                                                               
and establishing a statutory  appropriation limit. Currently, the                                                               
chamber feels that  until those are done, it is  premature to tax                                                               
Alaskans,  which  will exacerbate  the  situation,  he stated.  A                                                               
recent survey  of 808 Alaskans  shows most oppose an  income tax.                                                               
Alaskans  overwhelming realize  that taxes  will have  a negative                                                               
impact on the  state's economy. That opinion will  not change, he                                                               
added, until  the governor and  the legislature have  a mechanism                                                               
to  control future  spending.  He quoted  the  Tax Foundation  as                                                               
saying this proposal will make Alaska  one of the states with the                                                               
highest taxes in the country, like California and New York.                                                                     
8:21:39 PM                                                                                                                    
DAVID  LANDRY, Anchorage,  testified  that he  is a  construction                                                               
contractor  and has  had a  business out  of Anchorage  since the                                                               
1980s. He fully  supports HB 115. He said that  he read the op-ed                                                               
by the chamber  of commerce, and he is wondering  what world they                                                               
are living in.  He suspects that there are not  a lot of business                                                               
people  running the  chamber. There  is no  possibility that  his                                                               
business will  be killed by  this income tax-quite  the contrary,                                                               
he added. There is a  real feeling of instability among customers                                                               
right now, and he deals with  people who have money. Most of them                                                               
are informed enough to know there  will be a broad-based tax, and                                                               
they  want  to know  what  it  will be  and  that  there will  be                                                               
stability  before  they  start  spending  money.  As  a  business                                                               
person, he explained,  "you need to get this cleared  up." It has                                                               
been many  years since the price  of oil fell, and  the state has                                                               
not had stable income. He  stated that a predictable state budget                                                               
based on the  permanent fund earnings and the income  tax will be                                                               
a blessing. The tax  will be a very good thing  for the state and                                                               
will eliminate the  ping pong budgeting based on  oil revenue. "I                                                               
strongly urge you to pass this," he concluded.                                                                                  
8:23:46 PM                                                                                                                    
MICHAEL  CHAMBERS, Anchorage,  said  he is  a  Viet Nam  veteran,                                                               
former  public schoolteacher,  and starving  artist. "I  stand in                                                               
direct opposition  to HB  115." He asked  why the  legislature is                                                               
restructuring the permanent fund  and implementing an income tax.                                                               
He  said it  is  because  the legislature  refuses  to lower  the                                                               
operating budget. "I could care  less how many misrepresentations                                                               
have been  made." The truth is,  the budget has not  been cut. It                                                               
is  obvious,  he  said,  that  the  legislature  prioritizes  the                                                               
government worker  over the  private worker,  because there  is a                                                               
higher  probability  that  the government  worker  will  vote  to                                                               
protect his or her own  paycheck. These actions are about tending                                                               
your own  beans for reelection,  and nothing more,  he explained.                                                               
The governor  has the distinction  of being the only  governor in                                                               
America who  taxes children 50  percent of their income,  and now                                                               
legislators wish  to join  him in  this theft  at 75  percent, he                                                               
said.  Incorporating  the  income  tax  will  give  Alaskans  the                                                               
distinction  of  having  the   highest  cost-of-living  index  in                                                               
America.  "If  this legislation  is  passed,  this will  be  your                                                               
legacy," he  cautioned. He said he  is a fan of  legislation that                                                               
calls for no  income tax and no restructuring of  the PFD, and he                                                               
would like to  see that plan advocated,  because many legislators                                                               
are saying it doesn't pencil out. "It does pencil out."                                                                         
8:25:44 PM                                                                                                                    
JASON GUSTAFSON,  Anchorage, said  he represents himself  and his                                                               
wife and  children. He said  he is  here today because  of money,                                                               
which  the state  doesn't have  enough  of. "So  what next?"  The                                                               
easiest answer is to cut, but  the state could cut every employee                                                               
and still  run a deficit,  so it can't cut  its way out  of this.                                                               
Some fellow  Alaskans are  talking about  an income  tax damaging                                                               
the economy, but he does not  hear how they will close the budget                                                               
gap. "I  hear them  saying hell  no to taxes,  as if  somehow the                                                               
budget crisis  will go  away." One way  or another,  Alaskans are                                                               
going  to  pay.  Last  year the  governor  vetoed  a  substantial                                                               
portion  of  the PFD,  and  folks  might  argue that  that's  not                                                               
income,  but Alaskans  see that  it  is income  on their  federal                                                               
income tax. What  people are really saying is that  they will pay                                                               
more for  an income tax  than what  they lose from  the dividend.                                                               
Most Alaskans  can't say that;  most Alaskans stand to  lose more                                                               
from the  loss of the  dividend than  from the income  tax, which                                                               
means that the damage to  the economy will be exacerbated without                                                               
the  income tax-it's  either/or  and not  nothing,  he stated.  A                                                               
state income  tax can  be deducted  from the  federal tax,  so it                                                               
costs Alaskans less  to raise the same revenue. It  is just math.                                                               
"It's that same  math I learned in Anchorage  public schools, the                                                               
same public schools  that are getting hit with  budget cuts." His                                                               
children  attend those  schools,  and those  schools trained  his                                                               
employees, and they  are the single most  important investment in                                                               
Alaska's future.  Don't eat your  seed corn, he  added. Education                                                               
funding  pays interest  as the  children grow  up, get  jobs, and                                                               
become the economy  of tomorrow. He urged going  forward with the                                                               
one option that raises more money than it costs.                                                                                
8:28:06 PM                                                                                                                    
DAVID BOYLE, Anchorage, said he  is the executive director of the                                                               
Alaska Policy  Forum and part of  a mission critical team  but is                                                               
testifying as  an individual. He  said everyone would  agree that                                                               
the  last thing  to do  during a  recession is  impose taxes.  He                                                               
repeated  himself. Taxes  will drive  the economy  into a  deeper                                                               
recession,  he  opined.  Before the  state  redistributes  wealth                                                               
either  through  an  income  tax  or a  PFD  cut,  he  urged  the                                                               
legislature to  reduce the budget,  including K-12  education. It                                                               
takes courage  to resist, and  for those  who want to  spend more                                                               
for education without accountability,  "guess what? Alaska spends                                                               
more for  students than all but  two other states." He  said that                                                               
before his  social security is  taxed, and his  mortgage interest                                                               
is taxed,  and before the active  military is taxed, "I  want you                                                               
to cut the 3.5 percent  merit pay for state government employees.                                                               
I want  you to  tax your  per diem at  $265 a  day, which  is not                                                               
taxable  under  the  federal  code."   He  also  would  like  the                                                               
legislature to  cut money  for promoting a  gasline. He  does not                                                               
want to pay for the gasline,  he clarified. "Thank you for my two                                                               
minutes of democracy." Kill this bill, he concluded.                                                                            
8:30:19 PM                                                                                                                    
MARNIE HARTILL, Anchorage, said she  is speaking as an individual                                                               
in  support of  HB 115.  She  is a  school teacher  and the  vice                                                               
president of  school programs.  In 2009,  she started  teaching a                                                               
multimedia class,  but was not  provided any computers.  In 2011,                                                               
there were cuts to the school  social worker, and she was working                                                               
with a student who did sleep on  a bed and with students who were                                                               
not living  with parents,  but the school  still lost  its social                                                               
worker.  In 2014,  hundreds of  teachers were  pink slipped,  and                                                               
there  were cuts  to school  business connections.  In 2015,  she                                                               
witnessed   increases  in   class  sizes   again,  and   programs                                                               
benefiting students in career and  college resources were reduced                                                               
to a skeleton staff. "Are  you using a 10-year-old computer every                                                               
day to work  or learn?" she asked. Each year,  she witnesses more                                                               
cuts to  education, and  two weeks  ago her  school did  not have                                                               
adequate  staff  to  deliver the  state  assessment  while  water                                                               
leaked through the ceilings. Education  costs have climbed due to                                                               
the rise  in health care costs,  she said, and she  surmised that                                                               
the committee was supportive of  HB 123, which will help Alaskans                                                               
get buying power  to reduce health care  costs with transparency.                                                               
The high  cost of health care  and the lack of  a defined benefit                                                               
plan has teachers churning in and  out of Alaska but not sticking                                                               
around, she  added. Opponents to  HB 115 say that  small business                                                               
owners will leave  the state, but where will  they go? Washington                                                               
has a broad-based sales tax and  Oregon has an income tax. A June                                                               
6, 2016,  article in  Forbes magazine lists  the states  with the                                                               
best  and  worst   economies,  and  leading  the   top  is  Utah,                                                               
Washington, and  California. Utah  has a great  income tax  and a                                                               
great economy, she pointed out.                                                                                                 
8:32:34 PM                                                                                                                    
DARIO BORGHESAN,  Anchorage, said  he and  his family  support HB                                                               
115, but not because he wants  to pay taxes, but because he wants                                                               
good schools for his son,  safe streets, and healthy communities.                                                               
He noted that  some people conclude that an income  tax will make                                                               
people  leave Alaska.  He said  every other  state has  either an                                                               
income tax  or a sales tax,  but the legislature should  ask what                                                               
happens if  Alaska tries  only to  cut its  way to  a sustainable                                                               
budget.  Will  cutting  the  university,  cutting  programs,  and                                                               
reducing professors keep Alaska youth  from leaving the state for                                                               
college?  If  they  leave,  will   they  come  back  without  the                                                               
knowledge economy  and social  network that  they need  to create                                                               
businesses  in  the 21st  Century?  He  questioned whether  young                                                               
families  will  want to  come  to  Alaska  when there  are  33-35                                                               
students in K-12 classrooms. The  reason there are legislators is                                                               
the  need for  knowledgeable and  thoughtful people  to take  the                                                               
long-term view of  what is healthy for our future  and our state.                                                               
Looking at places  around the country that  are prosperous, where                                                               
people want  to live, those aren't  places that try to  cut their                                                               
way  to  prosperity;  they  are   places  that  invest  in  their                                                               
community. "The way  to do that is  for all of us to  chip in and                                                               
pay a  little bit of  income tax to  support our schools  and our                                                               
community," he concluded.                                                                                                       
8:35:11 PM                                                                                                                    
DEENA MITCHELL,  Anchorage, said she strongly,  strongly supports                                                               
HB 115,  and there has  been wonderful testimony, so  she doesn't                                                               
want to be  repetitive. She has an MBA in  finance and a master's                                                               
degree in economics,  and having listened to  testimony, there is                                                               
no doubt that  Alaska needs to solve this problem  this year. The                                                               
state needs  fiscal certainty, she  said, and after  cutting $700                                                               
million  out of  the operating  budget over  the last  two years,                                                               
government  spending per  capita on  a real  dollar basis  is the                                                               
lowest it's  been in decades.  Many businesses need  certainty to                                                               
make future  investments, and  she has  heard that  companies are                                                               
doing work  from out-of-state offices,  because they  lack enough                                                               
confidence  in Alaska's  economy to  hire locally.  Alaska has  a                                                               
generous spirit that cares for  neighbors and strangers, and that                                                               
is what government services do  for its most vulnerable, like the                                                               
elderly and  children. "That  is why we  pay taxes,"  she stated.                                                               
The  Alaska  disconnect  has  been talked  about  a  little  this                                                               
session in  that as its  population grows, revenues do  not grow.                                                               
Having a progressive income tax  is a counter to the regressivity                                                               
of the PFD  cuts and ensures stability in  funding, which schools                                                               
desperately need.  It also ensures  that when there is  growth in                                                               
population,  there will  be  growth in  revenues  to support  the                                                               
services those people need.                                                                                                     
8:37:26 PM                                                                                                                    
PATTY  LINVILLE, Seward,  said  she recalled  sitting around  the                                                               
campfire  in  1976  and  discussing her  future  with  other  20-                                                               
somethings  who had  recently arrived  in Alaska.  Someone stated                                                               
that he was going to stick  around long enough to milk Alaska and                                                               
then move  on. "Little did  he know that  those of us  who stayed                                                               
would  be  able  to  milk   the  system  for  quite  some  time."                                                               
Inevitably now, we  must give back, and  HB 115 is the  way to do                                                               
so.  Universally,  people  with  families put  down  roots  where                                                               
education is valued  and supported; however, in  today's world it                                                               
is possible  for breadwinners to  travel to their jobs  in Alaska                                                               
and maintain  a household  Outside for the  sole purpose  of good                                                               
education for their  children. She said she has  friends who have                                                               
done that, and  she knows young families  contemplating doing so.                                                               
As her  son says, "It's  just a plane  ride." House Bill  115, if                                                               
implemented, will show all Alaskan  families that we want them to                                                               
settle  in  for the  long  haul.  An  income tax  designated  for                                                               
education will show educators that  we are serious about creating                                                               
an environment  where children will  be challenged to be  part of                                                               
Alaskan's  future. Paying  a  tax will  also remind  us  to be  a                                                               
participant  in the  government we  pay for.  She encouraged  the                                                               
committee to pass HB 115.                                                                                                       
8:39:05 PM                                                                                                                    
BRUCE JAFFA, Seward, said  he is 70 and has been  a welder for 50                                                               
years. He  worked for a company  that employed between 12  and 50                                                               
people, he added.  He said he pays property tax  in four boroughs                                                               
and owns  property in  other boroughs, and  he fully  supports HB                                                               
115 as a fair and valuable  way to solve Alaska's revenue crisis.                                                               
People should be responsible  and conservative with expenditures,                                                               
individually and  as a  society. "We decide  what things  we need                                                               
and what things  we have to have and the  means to acquire them."                                                               
As a  society, we  determine that certain  things in  an advanced                                                               
civilization  are necessary  and  should be  willing  to pay  for                                                               
them. "It is  our responsibility to pay for these,"  he added. It                                                               
has  been over  20 years  since Alaskans  have had  the PFD,  and                                                               
everyone  forgets that  we have  to  support ourselves.  Alaskans                                                               
have forgotten that this is  our obligation. An income tax, along                                                               
with reduced expenditures, partial  application of permanent fund                                                               
revenue, and modification of  resource extraction tax structures,                                                               
would  provide  certainty and  is  the  fairest way  forward,  he                                                               
stated. An income tax would  be offset by deductions from federal                                                               
taxes and would  force nonresident wage earners  to contribute to                                                               
the  state   economy.  Nonresident  wages  are   often  from  the                                                               
extraction of  state resources, and  it is  fair that there  be a                                                               
collection from these  wages before they leave  the state. Income                                                               
tax is  partially balanced by  the PFD program, he  stated, which                                                               
is fairly distributed to all legal residents.                                                                                   
8:41:40 PM                                                                                                                    
MATT STEELE,  Wasilla, said he is  a small business owner  in the                                                               
Mat-Su, and  he has  had to  take some big  income hits  over the                                                               
past couple of years. He added  that $18,644 is what the state of                                                               
Alaska  spends every  year, including  the  federal portion,  for                                                               
every man, woman, and child. He  opined that the budget is out of                                                               
control. When his income declined,  his family had to make budget                                                               
cuts to his cable TV. He  explained that he drives an 18-year-old                                                               
car  and  maintains  it  himself.  If the  state  took  the  same                                                               
approach, it would not be "up  against this wall." The income tax                                                               
is going  to be  devastating to  his business  and to  most small                                                               
businesses that he knows. "It is insane!"  He said he is a fan of                                                               
Senator  Hughes. He  begged the  committee to  get the  budget in                                                               
control. "I beg  you, beg you, to  consider a plan, if  we had to                                                               
do anything,  like Michael Dunleavy's  plan." He said  he thought                                                               
that plan  was sound and secure,  and that plan would  not affect                                                               
his family.  He said he  wanted to tell testifiers  still waiting                                                               
to talk that this notion that people  have to pay income tax as a                                                               
civic  responsibility  is insane.  Ten  percent  of his  adjusted                                                               
income  goes to  borough  taxes  in addition  to  a  gas tax  and                                                               
everything else that he pays.                                                                                                   
8:43:49 PM                                                                                                                    
RYAN  MCKEE, Americans  For Prosperity,  Wasilla, said  that cuts                                                               
alone will not solve the  problems, but hearing other testifiers,                                                               
there seems to be agreement that  the budget has been cut as much                                                               
as it possibly  can be. He said  that is not the case,  and a lot                                                               
more needs to be cut. The  legislature needs to prove to Alaskans                                                               
that  is can  operate efficiently  with the  money it  has before                                                               
asking for  more, he stated.  The legislature has spent  way more                                                               
than it  should have during  times of  high oil prices,  and that                                                               
can't happen again. He added that  a lot of Alaskans are a little                                                               
bit  leery of  giving more  money  when a  lot of  people in  the                                                               
legislature  say that  they have  already  cut to  the bone.  The                                                               
House majority  should follow the  Senate majority  and implement                                                               
spending  caps to  control,  or  at least  adjust,  the one  that                                                               
currently  exists to  really control  the  growth of  government,                                                               
"especially in times  like this when the price of  oil is low and                                                               
probably  even more  importantly when  oil is  high, so  we don't                                                               
have more wasteful spending like  the past," he explained. It has                                                               
been mentioned that the cost of  living is high in Alaska, and he                                                               
is opposed to  implementing an additional cost of  an income tax,                                                               
especially on  just a  certain group of  people. People  say that                                                               
everyone will pay  their fair share, but the way  that the tax is                                                               
set up,  that is not  the case, he  stated. Once again,  about 27                                                               
percent of  Alaskans will pay the  majority of this, and  that is                                                               
not a  fair share, he  said. He told  the legislature to  rein in                                                               
the out-of-control  spending instead of  thinking of new  ways to                                                               
tax Alaskans to fix the bloated budget.                                                                                         
CHAIR  COSTELLO said  there are  54 people  waiting to  speak and                                                               
asked that comments be brief.                                                                                                   
8:46:27 PM                                                                                                                    
BETH FREAD, Palmer,  said she is not excited about  the fact that                                                               
the legislature  can't figure out  how to cut the  budget, except                                                               
when it  comes to  the undesignated general  funds, which  is the                                                               
money  "that  we  most  directly  feel as  long  as  they  aren't                                                               
(unclear) of  programs, like education."  Alaska has  the highest                                                               
costs of  per capita education  and the lowest result,  she said,                                                               
and  she can't  imagine why  people think  the schools  need more                                                               
money and  not more streamlining.  Thank goodness  Senator Hughes                                                               
is  working on  accomplishing those  two goals,  she added.  "The                                                               
silos for our  seed corn, the school system, is  letting mold and                                                               
mildew  form  and run  rampant  throughout  the silos."  Alaska's                                                               
children are  still going out of  state for college and  jobs, so                                                               
don't think that UAA or UAF  are the nation's best. Education has                                                               
to be improved  and Alaska has proven that money  doesn't fix it,                                                               
she added. She stated that she  can tell who the public employees                                                               
are when  they are  testifying for  HB 115, "as  well as  all the                                                               
other money  raids that are going  on." She added, "You  all know                                                               
that  a  sustainable  budget  is  one  based  upon  revenues  and                                                               
sustainable by  those dollars. You  are not taking  revenues, you                                                               
are taking out of the  pockets of Alaskans." The legislature, she                                                               
said,  is  not  following  through  on  their  jobs  as  supposed                                                               
conservatives. She  read a poll  where 64 percent of  Alaskans do                                                               
not approve  of an income tax,  so she can only  presume that the                                                               
people in favor of coming into  her home for money are people who                                                               
are  employed by  government. She  asked the  committee to  stand                                                               
with their commitment to not pass HB 115.                                                                                       
8:48:57 PM                                                                                                                    
GARRETT ABBOTT, Ketchikan, said he  was born in Ketchikan in 1986                                                               
and  graduated  from  the University  of  Alaska,  Ketchikan.  He                                                               
supports HB  115 and said  that the  budget cuts that  the Senate                                                               
majority  has proposed  will only  deepen the  recession, further                                                               
the uncertainty,  increase inequality,  and lower the  quality of                                                               
life.  The  cuts amount  to  stealing  from Alaska's  future,  he                                                               
stated, in  order to escape pain  at the present. He  said HB 115                                                               
will  allow  Alaska to  pay  for  its  present and  preserve  its                                                               
future,  and it  is a  fair, progressive  income tax.  Alaska has                                                               
many wealthy residents,  and the state has been good  to them. In                                                               
this time  of need,  it is only  right that  high-income Alaskans                                                               
pay  their  fair  share  to  support  infrastructure,  education,                                                               
healthcare, social  safety nets, and  the elderly. There  is talk                                                               
of substituting  a sales tax for  an income tax, but  sales taxes                                                               
are  regressive since  low and  middle-income Alaskans  would pay                                                               
more  in  taxes   as  a  percentage  of   their  income.  Smaller                                                               
communities  that depend  on  local sales  taxes  would suffer  a                                                               
disproportionate  burden. Ordinary  Alaskans  have already  borne                                                               
the brunt  of the fiscal  crisis from  the recession and  cuts in                                                               
state and local  services and a reduction in the  PFD. He said it                                                               
is unconscionable  that the Senate would  contemplate closing the                                                               
fiscal cap  with a sales  tax. Advocates of  a sales tax  like to                                                               
paint  it  as a  small  alternative,  but consumption  taxes  are                                                               
greater  facilitators of  government  growth  than income  taxes,                                                               
because  under a  sales tax  ordinary people  experience the  tax                                                               
burden  as less  than it  really is.  Income taxes  are open  and                                                               
honest, while sales  taxes trick people by  spreading their costs                                                               
over a  year's worth of  purchases. For  those who seek  to avoid                                                               
unnecessary increases in  the size of government,  the income tax                                                               
is  clearly superior.  The  income  tax in  HB  115  is the  best                                                               
possible means for resolving Alaska's fiscal crisis, he said.                                                                   
8:51:18 PM                                                                                                                    
TERRI ROBBINS, Ketchikan, said she is  in favor HB 115. She noted                                                               
that  she was  born and  raised in  Alaska, and  she has  enjoyed                                                               
paying no income taxes and she  wished it could continue, but she                                                               
would  enjoy knowing  that there  is  a future  that involves  an                                                               
educated  and competitive  work  force to  sustain the  lifestyle                                                               
that  is   uniquely  Alaska.  Cuts  to   school  funding,  severe                                                               
downsizing  of   government  services,  abandoning   our  elders,                                                               
ignoring nonprofits, and  neglecting our infrastructure threatens                                                               
us all,  she said.  The financial and  ethical costs  of allowing                                                               
this to  happen would be  catastrophic. She noted that  Alaska is                                                               
the only state that  does not have either a state  sales tax or a                                                               
state income  tax, and residents are  taxed at a far  lower level                                                               
than  any other  state,  and  it is  not  sustainable. This  very                                                               
modest  and equitable  income tax  will still  keep Alaska's  tax                                                               
lower than almost  any other state, but that is  not what we need                                                               
to  focus on,  she said.  Our  children and  the consequences  of                                                               
failing in the responsibility to  educate them should be Alaska's                                                               
focus.  To  be  competitive  in   this  increasingly  global  and                                                               
technical   economy,   Alaska   needs   to   invest   in   youth,                                                               
infrastructure,  sustainable industries,  and citizens.  The days                                                               
of relying on oil  are over, she said. It is  time for the people                                                               
who live  in this  magnificent place to  start, again,  making it                                                               
fiscally secure, she said, and she urged passage of HB 115.                                                                     
8:53:19 PM                                                                                                                    
BRENDA  LOUGHMAN,  Board  Member,  Tongass  School  of  Arts  and                                                               
Sciences, Ketchikan,  said the costs  of the charter  school have                                                               
increased, and it has had to  cut and cut its budget. The members                                                               
support HB 115  to help with education funding. She  said she and                                                               
her husband own a construction company,  "and I can assure you we                                                               
will not be  leaving the state." She expressed  concern about the                                                               
state's fiscal  uncertainty and  whether customers  will continue                                                               
to hire them, so please pass HB 115 to help Alaska as a whole.                                                                  
8:54:21 PM                                                                                                                    
WALT COULTER, Fairbanks,  said he is not opposed  to paying taxes                                                               
for government  services-a necessity of  responsible citizenship.                                                               
He said he is opposed  to making only wage-earners pay. Expecting                                                               
the so-called rich to pay more  of their fair share should sicken                                                               
any American, he stated. "Who  is rich? "Somebody that makes more                                                               
than you  do, 'cuz you  ain't rich."  He spoke of  the convoluted                                                               
U.S. tax  code that  allows legislators  and bureaucrats  to line                                                               
the pockets of lawmakers and  lobbyists. They do favors for their                                                               
preferred  groups,  he  stated.  He  suggested  taxing  everybody                                                               
through a  sales tax.  He is adamantly  opposed to  any socialist                                                               
income tax that punishes productivity.                                                                                          
8:55:35 PM                                                                                                                    
DON GRAY, Fairbanks, Alaska, said he  and his wife came to Alaska                                                               
in 1970 when  there was an income tax. They  raised two daughters                                                               
and now  have two grandsons  in Anchorage. He said  the education                                                               
in Anchorage and Fairbanks has  been excellent, and he hopes that                                                               
is true  throughout the state.  There have been about  $3 billion                                                               
cut from  the budget in the  last three or four  years, and there                                                               
is still a  $2.7 billion deficit. He said  a diversified approach                                                               
is  appreciated, including  SB 26,  which would  use part  of the                                                               
earnings from the  permanent fund for the  deficit. This proposal                                                               
for a  modest income  tax, where those  making over  $60,000 will                                                               
only pay  $500, those earning  $80,000 would pay about  $990, and                                                               
those with an income of $200,000  would pay $5,200, is not a huge                                                               
amount. It  is not going to  end businesses, he explained.  It is                                                               
important  that  Alaska  maintains  its bond  ratings;  we  can't                                                               
afford to  diminish it.  Most important  is the  vital connection                                                               
with citizens  and what  is spent  in the state,  and a  tax will                                                               
keep their eyes on the ball.                                                                                                    
8:58:06 PM                                                                                                                    
GERALD  BROWN, Fairbanks,  said he  supports HB  115; it  is high                                                               
time Alaska  has a balanced  approach to funding  government. The                                                               
cuts  in education,  the university,  and  other programs  dismay                                                               
him. He said HB 115 does not go  far enough, and he would like to                                                               
see a sales tax to help spread  the burden over a great number of                                                               
people. There are a lot of  people living outside Alaska and work                                                               
here but  don't contribute  to it, including  those who  work for                                                               
fisheries,  oil production,  and  others. They  benefit from  the                                                               
infrastructure  that the  government  provides.  Through a  sales                                                               
tax,  visitors  will  provide  some income,  and  that  could  be                                                               
tailored to alleviate costs on food and medicine, he said.                                                                      
8:59:59 PM                                                                                                                    
TERRENCE COLE,  Fairbanks, said he  represents himself  and good,                                                               
logical thinking people everywhere.  The vast amount of testimony                                                               
has  shown ignorance  of Alaska  history; Alaska  would not  be a                                                               
state  without  the  original  income tax  passed  in  1949.  Jay                                                               
Hammond has said  that his failure to veto the  income tax repeal                                                               
in 1980  was the single  greatest failure of his  political life.                                                               
Governor Hammond told him that he  didn't have the guts to do it,                                                               
but that  he would have  slept better if  he had. "Of  course, we                                                               
have to have an  income tax," he said, "this is  an open and shut                                                               
case."  He urged  the committee  not  to listen  to Senator  Pete                                                               
Kelly; he's just off his rocker, he added.                                                                                      
9:01:19 PM                                                                                                                    
JOAN  FRANZ,  Fairbanks, said  she  is  a pediatric  occupational                                                               
therapist, a small  business owner, and a  long-term Alaskan. She                                                               
supports a progressive income tax as  presented in HB 115; we had                                                               
an  income tax  in  the past  and it  should  be reinstated.  She                                                               
explained that  an income tax  is a  much fairer tax  on Alaska's                                                               
residents than a  sales tax. Nonresident workers  should be taxed                                                               
who have incomes from either  Alaska's natural resources or other                                                               
businesses. Commuters  taking Alaskan jobs and  leaving the state                                                               
without any  taxation is an  unreasonable loss of revenue  to the                                                               
state. The  revenue is needed  for education, which  is essential                                                               
to building a better life  for future generations, she added. She                                                               
thanked the legislators who have the courage to support HB 115.                                                                 
9:02:41 PM                                                                                                                    
PRINCESS LUCAJ,  Fairbanks, thanked  the committee  and commended                                                               
Representatives Seaton  and Foster for having  the political will                                                               
to put  forward HB  115. She  is a  lifelong Alaskan,  an Alaskan                                                               
Native, and this is her home,  she said. She and her husband have                                                               
three sons and make a  modest combined income, and she absolutely                                                               
supports  HB  115.  When  she  was 16  at  Lathrop  High  School,                                                               
Governor Cowper  was in office,  and an  article in the  New York                                                               
Times  reported that  the oil  was going  to run  out and  Alaska                                                               
needed  to diversify  its economy.  She said  Alaska should  have                                                               
implemented an  income tax then.  "We should have  been preparing                                                               
for  harder  times,"  she  added.  She noted  that  she  used  an                                                               
interactive  spreadsheet provided  by the  legislature and  found                                                               
that "we've  got to have  this broad-based approach."  She called                                                               
for stability even  though she is not excited  about another tax,                                                               
but there is no way around it.  She told the committee that SB 21                                                               
was the  worst thing that could  have happened for the  state. "I                                                               
am tired of  profits over people." She added that  the only sales                                                               
tax she would support would be a luxury sales tax.                                                                              
9:04:23 PM                                                                                                                    
WOLFGANG  FALKE,  Fairbanks, said  he  is  a natural  citizen  of                                                               
Alaska and arrived in 1969. He  urged the committee to defeat the                                                               
bill. The people of Alaska decided not to have any income tax-                                                                  
progressive, flat, or otherwise. He  said Alaskans don't want the                                                               
bureaucracy associated with  a tax. "We don't need  an income tax                                                               
to take  care of the  state's business,"  he stated. It  would be                                                               
rational  to  tweak  permanent  fund  dividend  contributions  to                                                               
individuals since  federal income tax  is paid twice-once  by the                                                               
state and  then by the  individual. It  was the PFD  program that                                                               
put Alaska in  this financial dilemma. He pointed  to the federal                                                               
courts  requiring  that beneficiaries  reside  only  one year  to                                                               
qualify for the dividend, which  attracted welfare recipients and                                                               
criminal elements  to Alaska  to get free  money. He  stated that                                                               
those   people  have   overwhelmed   Alaska's  social   services,                                                               
education, and judicial system. "To  solve this problem, you must                                                               
cut state welfare  and social services contribution  to the point                                                               
of the money provided for by the federal government," he said.                                                                  
9:06:34 PM                                                                                                                    
DANIEL LYNCH, Soldotna, said he is  opposed to a $1,200 or $1,500                                                               
tax on children who don't  have jobs, senior citizens, and broken                                                               
people who have  worked their whole lives already. He  said he is                                                               
referring to a cap  on the PFD. He stated that he  is in favor of                                                               
an  income tax;  43 other  states use  an income  tax to  balance                                                               
their budgets.  He noted  that much has  been said  about out-of-                                                               
state workers  from the  North Slope, the  oil and  gas industry,                                                               
the tourism industry  who are mostly working  for Princess Cruise                                                               
lines,  the   fishing  industry,  and   nonresident  construction                                                               
workers. Before he put down roots in Alaska, he was an out-of-                                                                  
state  worker,  working  the construction  season.  As  a  "guest                                                               
worker/bandit,"  he used  state  and  municipal airports,  marine                                                               
ferries,  highways, troopers,  snowplows, libraries,  gymnasiums,                                                               
and  parks-to  name a  few.  "My  only contribution  was  through                                                               
tobacco, alcohol, and gas tax." He  said his home state would ask                                                               
him where his  income tax was, but  he had no wages  and no taxes                                                               
in his  home state. "It was  very profitable for me,  but not for                                                               
the people of Alaska or for  the Alaska resident that didn't have                                                               
a  job  because  I  had  theirs."  Current  out-of-state  workers                                                               
contribute  nothing, and  they occupy  jobs that  residents could                                                               
use, he added. He urged "no"  on dividend cuts that stem from the                                                               
recession caused  by the  vote on  SB 21 in  August of  2014, and                                                               
"yes"  on  income taxes.  "I'll  contribute  more  and not  be  a                                                               
freeloader or  welfare queen." Maybe  your raffle will  solve the                                                               
problem, he concluded.                                                                                                          
9:09:00 PM                                                                                                                    
PENNY  VADLA, Soldotna,  said  she is  a  Kenai Peninsula  school                                                               
board member; however,  she is testifying as  a parent, community                                                               
member,  volunteer,  taxpayer,  and  as  a  fiscally  responsible                                                               
citizen. She came to Alaska 40  years ago and payed an income tax                                                               
and a  school tax. Her  husband is a  contractor and he  wants to                                                               
pay an  income tax, because  he wants  services. She said  she is                                                               
retired and  on a fixed income.  She supports both HB  115 and HB                                                               
111, the oil  tax bill. She wants a sustainable  fiscal plan that                                                               
ensures a healthy future for all  Alaskans. We cannot cut our way                                                               
out,  she stated.  She urged  Alaskans  to not  spend down  their                                                               
savings  and delude  themselves  by relying  only  on rising  oil                                                               
prices. There have been many cuts,  but a fair income tax and oil                                                               
tax is  needed for  a sustainable  budget. She  said she  is more                                                               
than  willing  to pay  her  share.  "Please  listen to  our  many                                                               
voices."  She applauded  members  for this  hearing  and for  the                                                               
House majority plan.                                                                                                            
9:11:41 PM                                                                                                                    
TIM  SCHRAGE, Anchorage,  said,  as a  small  business owner,  he                                                               
graduated  from  the  University  of   Alaska  and  got  a  great                                                               
education from  the Anchorage  school district.  "I can  tell you                                                               
that the way  to grow the economy is not  to institute taxes," he                                                               
stated. He  added that he is  not opposed to the  concept, but it                                                               
is not  yet the  time for  an income  tax. When  he looks  at the                                                               
health care costs  for his employees compared to  those of public                                                               
employees, "it's absurd." He paid  $36,000 last year for a family                                                               
of  four, and  the  dollar-for-dollar wage  and benefit  packages                                                               
that  public employees  are enjoying  is disgusting.  He and  his                                                               
employees are  discouraged by  that, he added.  The state  has to                                                               
cut  spending; it  has  to make  government  accountable for  its                                                               
services. He said  everyone wants great services and  there is no                                                               
doubt about  that, but he  has seen a  cut in the  capital budget                                                               
and not  the operating  budget, so Alaska  is cutting  its future                                                               
operating budget, not  the actual one. He urged  the committee to                                                               
table  HB 115,  cut  more, use  the POMV  plan,  and move  Alaska                                                               
forward.  He  noted that  if  his  business  had $13  billion  in                                                               
savings, he would be laughed at if  he went to the bank to borrow                                                               
more.  He is  not the  bank. He  is in  the minority  of Alaskans                                                               
testifying, but he is in the majority with his peer group.                                                                      
9:14:03 PM                                                                                                                    
CHRIS NELSON,  Anchorage, said  he is retired  from the  army and                                                               
noted that HB 115 is going  to impact people serving in the armed                                                               
forces  in Alaska.  He said  he only  heard one  comment on  that                                                               
issue, "and  I really  don't think  the House  or the  Senate has                                                               
fairly addressed  this particular issue  and the problem  it will                                                               
create, particularly for junior enlisted  members of the army and                                                               
the air  force that are  serving in  my neighborhood." He  said a                                                               
member with three years of  service makes $25,509 base pay. There                                                               
is nothing progressive about taxing  these people, he stated. The                                                               
out-of-state  workers will  be  taxed, and  every  member of  the                                                               
armed  forces  in Alaska  did  not  come voluntarily;  they  were                                                               
assigned to Alaska.  He did not regret being  assigned to Alaska,                                                               
and  he stayed  after he  retired.  They all  receive a  cost-of-                                                               
living allowance in  this state, and he asked if  HB 115 will tax                                                               
it.  They also  receive  a housing  allowance  and a  subsistence                                                               
allowance.  Pilots and  paratroopers at  Fort Richardson  receive                                                               
hazardous  duty pay,  and  he  asked if  those  benefits will  be                                                               
taxed. He noted  that in the next few days,  2,000 will deploy to                                                               
Afghanistan,  and those  people  will receive  pay  for being  in                                                               
imminent danger.  He asked  if it  is right to  tax that  pay. He                                                               
doesn't think it is right. Unless  the bill defines the burden on                                                               
the military in  Alaska, he asked that the bill  be tabled. It is                                                               
not enough to  just say, "thank you for your  service," he added.                                                               
If members  pass this  bill, they should  instead say,  "Haha, we                                                               
9:17:30 PM                                                                                                                    
CYNTHIA HENRY,  Fairbanks, said she  has been waiting  over three                                                               
hours  to  testify  because  she feels  so  strongly  about  this                                                               
subject  and is  opposed to  HB 115.  Implementing an  income tax                                                               
would be  a big mistake,  and she  has concerns about  job losses                                                               
and uncertainty about small businesses  like hers. Every business                                                               
owner she has talked to has had  to lay off employees, so this is                                                               
not the  time for an income  tax. She said Alaska  cannot tax its                                                               
way to prosperity,  and it is not a crisis  situation. Alaska has                                                               
huge financial  reserves to fill  the budget gap for  many years,                                                               
she  added, by  using the  earnings from  the permanent  fund and                                                               
perhaps taking money from the  CBR. This will fund the government                                                               
and  preserve   the  PFD  program  while   not  exacerbating  the                                                               
recession.  She stated  that many  people are  dismayed that  the                                                               
House passed  HB 115.  Taxing the  hard-working people  of Alaska                                                               
would further cripple the economy, she added.                                                                                   
9:19:10 PM                                                                                                                    
BOB GRIFFIN,  Anchorage, said he  is a retired air  force fighter                                                               
pilot, a  small business owner,  and a commercial pilot.  He said                                                               
he is  opposed to HB  115. "I don't  mind paying income  taxes at                                                               
some point," he offered, but he  wants to fix the oversized state                                                               
government first.  He advocates  for education,  but if  there is                                                               
information  showing  that   bigger  government  produces  better                                                               
student  outcomes, he  would support  HB 115.  He noted  the high                                                               
literacy  rates of  China, Russia,  and Cuba  and said  that Cuba                                                               
spends about five times less  on education than Alaska. According                                                               
to the NEA  estimates, Alaska spending is the highest  in the US,                                                               
143 percent of  the national average relative  to median incomes.                                                               
Alaska is expensive, but it is  not 2.5 times more expensive than                                                               
the Lower  48. In 1962,  Alaska's spending was the  sixth highest                                                               
in  the nation,  30 percent  above the  national average,  and 29                                                               
percent below the  first state, he reported. Since  1960, the GDP                                                               
in Alaska  increased 19-fold, but  state spending per  capita has                                                               
increased  52-fold. He  said his  family  has been  in the  state                                                               
since  1899, and  they receive  excellent education  and services                                                               
with much smaller government. He supports a spending cap.                                                                       
9:21:59 PM                                                                                                                    
LUANN MCVEY,  Douglas, urged  the committee to  pass HB  115. She                                                               
said she  is a retired  teacher and believes in  reliable funding                                                               
for  Alaska  schools  that  allow  parents,  administrators,  and                                                               
teachers  to plan  ahead to  accommodate fluctuations  in student                                                               
populations. She  said she  is opposed  to the  Senate's proposed                                                               
budget cuts.  Every year, when  cuts happen, teachers  are yanked                                                               
this way  and that way, and  some don't make it  back. Classrooms                                                               
are swelling with students, she  reported, and higher student-to-                                                               
teacher  ratios render  teachers  far less  effective. The  House                                                               
fiscal  plan offers  a multi-pronged  avenue to  support services                                                               
that  Alaskans  need,  including  schools. It  is  not  just  for                                                               
schools, she  stated, but helping children  develop their highest                                                               
potential is  the job of  thoughtful and skilled teachers.  It is                                                               
the foundation  for a sustainable democratic  society. Using part                                                               
of the permanent  fund reserve earnings, eliminating  the oil and                                                               
gas tax  credits, and  reinstituting an  income tax  will provide                                                               
for a solid fiscal plan, she  said. Schools are not an example of                                                               
bloat  or  wasteful  government   spending,  neither  are  health                                                               
clinics  that have  been  eliminated around  the  state, nor  the                                                               
university programs. No more budget cuts, she concluded.                                                                        
9:24:06 PM                                                                                                                    
JOAN  O'KEEFE, Chair,  Operations Board,  Foraker Group,  Juneau,                                                               
said  the Foraker  Group is  Alaska's nonprofit  association. The                                                               
group has  strongly stated that public  policy priorities include                                                               
the passage of a comprehensive  fiscal plan. It is essential, she                                                               
said,  and  an income  tax  must  be  part  of the  package.  She                                                               
supports a plan  that does not depend on a  single sector, but is                                                               
fair and equitable. Short-term budget  cuts only create long-term                                                               
challenges  for Alaskans.  The nonprofit  sector is  an important                                                               
economic  driver in  the state  and  provides critical  community                                                               
services that  are otherwise unavailable.  "Our sector  will only                                                               
thrive when the  state's fiscal challenges are  met," she stated.                                                               
Nonprofits  help ensure  vibrant and  healthy communities  across                                                               
Alaska.  The Foraker  Group has  heard  loud and  clear from  the                                                               
nonprofit sector  that fiscal  stability is  critically important                                                               
in  delivering  essential  services   across  the  state.  As  an                                                               
individual, "I  am prepared to  share the tax burden."  On behalf                                                               
of  the Foraker  Group,  she  urged the  legislature  to pass  an                                                               
income tax  that is  part of a  comprehensive plan  that supports                                                               
rural   and  urban   communities  and   protects  Alaska's   most                                                               
9:26:19 PM                                                                                                                    
MARJORIE HAMBURGER, Juneau,  said she supports the  income tax in                                                               
HB 115. She said she is  speaking for her husband and herself and                                                               
for her  three children who  are on  the cusp of  adulthood. They                                                               
will be  deciding if they  can stay in  Alaska and have  jobs and                                                               
education for  their own  families, she  said. She  cannot accept                                                               
any further cuts to essential  government services. "I am willing                                                               
to be taxed," she added.                                                                                                        
9:27:36 PM                                                                                                                    
CLAIRE HOLLAND LECLAIR, Anchorage, said  she supports HB 115 as a                                                               
comprehensive  response to  Alaska's  budget  shortfall. "I  hope                                                               
you're taking  note of all  the everyday  working Alaskans-young,                                                               
old, and in  between-who are urging you to tax  them." It is time                                                               
to end the  entitlement culture and pay  for government services,                                                               
not  just education,  she said.  She  has two  young children  in                                                               
public schools,  so she  is worried  about education  funding, as                                                               
well  as  transportation,  public  safety, and  people  who  fall                                                               
through the  cracks and need help  from all of us.  "I am willing                                                               
to pay for that," she stated.  She pointed out that the Institute                                                               
on  Taxation  and Economic  Policy  reported  that HB  115  would                                                               
translate into  lower federal  taxes for  Alaskans. Collectively,                                                               
Alaska  would be  spending  about $133  million  less in  federal                                                               
taxes under this bill.                                                                                                          
9:29:01 PM                                                                                                                    
ROBIN  SMITH, Anchorage,  noted that  she and  her husband  own a                                                               
small business, and she has never  worked for the state. "I don't                                                               
even have kids in the  education system," she added. Her business                                                               
has been  negatively impacted by the  low prices of oil,  but she                                                               
is still in  favor of an income tax. The  legislature has already                                                               
cut  the operating  budget  by $700  million,  and Gunner  Knapp,                                                               
Alaskan economist,  said Alaska  is draining  its savings  by $10                                                               
million per  day. That should  tell everyone that Alaska  needs a                                                               
long-range  fiscal  plan,  she  stated.   We  can  no  longer  be                                                               
dependent  on   the  ups   and  downs   of  the   energy  market.                                                               
Representative Seaton  made three important points  this morning:                                                               
Closing the  deficit just  by cutting state  jobs would  cost the                                                               
economy the most jobs, so we  have to stop cutting. A progressive                                                               
income tax will have a smaller  impact on job losses, and it will                                                               
be  partly paid  by nonresidents.  Dividend cuts  would have  the                                                               
greatest short-term impacts  on income. Everyone is  going to pay                                                               
with  HB  115,  including  herself  who is  in  the  highest  tax                                                               
bracket. Those of  us who have had these  great opportunities are                                                               
lucky. We are  fortunate to live in Alaska. When  we cut the PFD,                                                               
it is  a tax,  and it  impacts the  poorest individual  the most.                                                               
"Please,  please pass  HB 115;  it's  time for  Alaskans to  take                                                               
9:31:37 PM                                                                                                                    
TERRIE  GOTTSTEIN,  Anchorage,  said  she  supports  HB  115  and                                                               
instituting an  income tax.  It is not  possible to  cut Alaska's                                                               
way out of  the deficit. She said  it comes down to  what kind of                                                               
communities we want  to live in. She said she  is clear about her                                                               
priorities, which  include education.  There is  a constitutional                                                               
responsibility. "I have  watched as you have cut and  cut and cut                                                               
public education  to a point  where there is really  nothing left                                                               
to cut without  seriously impacting our kids." She  added that it                                                               
is time  to look  at the  revenue side. It  is not  surprising to                                                               
hear people  whining like  stuck pigs about  having to  pay their                                                               
own  way. Alaskans  have become  spoiled. What  is remarkable  to                                                               
her, she noted,  is that there are droves of  people here tonight                                                               
who are stepping  up to ask you  to tax them to help  pay for the                                                               
kind  of communities  that they  want to  live in.  Education for                                                               
kids  boils down  to hope-that's  what education  is. People  are                                                               
willing  to  pay for  that,  and  she  said  she hopes  that  the                                                               
committee  has  heard that.  She  heard  a testifier  talk  about                                                               
giving  a  tax  credit  to   people  who  pay  their  own  health                                                               
insurance, and that  makes sense. It seems simple to  pay a state                                                               
income tax based  on federal income taxes; a  person just figures                                                               
out a percentage  and then it's done, she  explained. Lastly, she                                                               
encouraged  the  committee to  "grow  a  pair,"  and she  is  not                                                               
discriminating against  women, because the pair  she is referring                                                               
to is courage and a conscience.                                                                                                 
9:34:49 PM                                                                                                                    
JEREMY   PRICE,  State   Director,   Americans  for   Prosperity,                                                               
Anchorage,  said he  started at  nine a.m.  today reading  to his                                                               
daughter's  kindergarten class.  "I love  Alaska's children,"  he                                                               
said. He stated  that he wants the best future  for them, and the                                                               
best  future is  no income  tax. The  best future  is a  balanced                                                               
budget  and  a  focus  on children's  outcomes,  not  funding  of                                                               
administrators and pensions for state  workers. House Bill 115 is                                                               
the  mother of  all tax  increases!  It will  raise $700  million                                                               
while  the state  is in  a  recession. "Nine  thousand jobs  last                                                               
year," and  more will be  lost this  year, he stated.  Alaska has                                                               
the second highest unemployment rate,  6.4 percent. These are all                                                               
terrible economic indicators, and  the legislature wants to raise                                                               
taxes on  Alaskans. He  asked Chair Costello  to please  save him                                                               
from these  rogue legislators who  slept through  their economics                                                               
classes. The tax has been characterized  as an income tax, but it                                                               
is  not.  "It's   the  mother  of  all  tax   increases."  It  is                                                               
progressive like taxes in California  and New Jersey, he said. It                                                               
taxes income  from capital gains, corporations,  pensions, and it                                                               
taxes  working  Alaskans, he  added.  He  suggested dealing  with                                                               
reality  when talking  about education.  School funding  has been                                                               
jacked  up  for years,  and  arguing  that  this issue  is  about                                                               
education misses the mark. "This  is about Alaska's future." Most                                                               
Alaskans want a  spending cap, 66 percent. Over  60 percent don't                                                               
want HB 115. He urged killing the bill.                                                                                         
9:37:15 PM                                                                                                                    
JACKIE CASON, Anchorage, thanked the  committee and said, "I know                                                               
that  you and  all  Alaskans  want a  healthy  economy with  good                                                               
schools that  will prepare young  people for jobs in  the state."                                                               
The committee  understands that  the university  is a  driver for                                                               
economic growth,  and she knows  that because members  have taken                                                               
time  to respond  to her  letters. The  House majority's  plan to                                                               
institute  an income  tax to  help  pay for  education and  other                                                               
services is  part of a  broad-based solution that will  not spend                                                               
down  Alaska's  savings,  she  added.  The  bill  also  draws  on                                                               
permanent  fund   investments,  reforms   oil  taxes,   and  cuts                                                               
spending. People  earning higher incomes  will pay more  tax, but                                                               
these earners have benefited most  from state infrastructure. She                                                               
said she is not discounting their  hard work, but many sectors of                                                               
Alaska's economy  would not  function as  well without  the state                                                               
services  that  support  labor and  commerce.  The  Institute  of                                                               
Social and Economic Research (ISER)  at the University of Alaska,                                                               
Anchorage, concluded that  cuts on the scale  contemplated by the                                                               
Senate  would have  twice the  negative  impact on  jobs and  the                                                               
economy  than  a  broad-based  tax.  She  said  she  believes  in                                                               
Alaska's  schools, and  Anchorage  schools are  full of  choices.                                                               
Three of her sons attended  Montessori school, and because of the                                                               
multi-aged classrooms, one  teacher was a part of  her family for                                                               
ten years.  "That's right. My  children enjoyed the  same teacher                                                               
for ten  years," she said.  The teacher  was truly part  of their                                                               
family. The  school is in  a diverse neighborhood and  provides a                                                               
positive learning  space for all  students, no matter  the income                                                               
or the  ability to give  extra time. She  would like to  see more                                                               
optional  schools located  in diverse  neighborhoods. Every  time                                                               
she  attends school  functions,  she comes  away  with a  greater                                                               
appreciation for how teachers strive  to help her children learn.                                                               
"They  know their  students  and  they put  a  lot  of time  into                                                               
creating  lessons  that  will engage  and  challenge  them,"  she                                                               
added. In two years, she will  no longer have children in school,                                                               
but she  wants the same  opportunities for others and  is willing                                                               
to help pay with an income tax.                                                                                                 
9:40:40 PM                                                                                                                    
THEA  AGNEW BEMBEN,  Anchorage,  said she  supports  HB 115.  Her                                                               
family  moved  to Alaska  in  1973,  and she  attended  Anchorage                                                               
schools.  Her parents,  brother, and  she are  self-employed, and                                                               
they are  not government employees  as some people  have claimed.                                                               
She said  she went to college  and graduate school and  came back                                                               
and started  a business. She  employs 18 people  in professional-                                                               
level jobs.  She is a small  business owner, and she  pointed out                                                               
that the chamber  does not represent her, nor do  some others who                                                               
testified  claiming  to  represent  small  business  owners.  Her                                                               
business  is doing  fine, but  what has  limited its  investments                                                               
over the last  few years is the uncertainty  of Alaska's economy.                                                               
The uncertainty is due to the drop  in oil prices and the lack of                                                               
a clear plan  to fund Alaska government. She said  it is flat-out                                                               
dishonest  for Alaskans  to  think that  they  are not  consuming                                                               
government services  every day. Every  time you get in  your car;                                                               
every time  you go  to the  airport; every time  you pick  up the                                                               
phone; and every  time you look outside and  see people suffering                                                               
on  the  street  and  feel  glad that  there  are  public  safety                                                               
officers  willing to  be  there.  She noted  that  today she  saw                                                               
officers peacefully  resolve a dispute.  Alaskans all  use public                                                               
services and all  need to pay their share, she  added. The amount                                                               
being contemplated  by HB 115  is modest and shared  broadly. She                                                               
urged  the committee  to support  the bill  as part  of a  fiscal                                                               
plan.  She noted  that  she  is the  president  of an  elementary                                                               
school  PTA, and  a recent  survey of  the teachers  and families                                                               
asked what  is needed  most, and  it was  snacks and  clothing to                                                               
help with children's  basic needs. Children need  a strong school                                                               
to give  them a  good start  in life, she  stated. She  urged the                                                               
committee to move forward with a broad-based approach.                                                                          
9:43:20 PM                                                                                                                    
JULIE  NIELSEN, Juneau,  said she  is a  sole proprietor  and she                                                               
supports HB 115.  She said she has been in  Alaska long enough to                                                               
witness crises caused  by oil prices, which  then evaporated when                                                               
prices  went up.  A stable  solution is  needed, she  stated. The                                                               
income tax  is the least  regressive option. The  proposed Senate                                                               
cuts go  too far and  will cut to  the point where  government is                                                               
not  effective. She  noted that  she doesn't  have children,  but                                                               
taxes would  go to the  children in  her community. She  does not                                                               
have loved ones that are suffering  with drug addiction or out on                                                               
the  street,  "but  I  would  gladly pay  an  income  tax  for  a                                                               
government that would support people  having those troubles." The                                                               
benefits  from  government  are  not  always  direct,  but  those                                                               
benefits increase everyone's quality of life, she concluded.                                                                    
9:45:16 PM                                                                                                                    
JOSEPH ROTH, Juneau, said he was  born in Palmer 57 years ago and                                                               
raised in  Sitka. He  said he has  worked in  Southcentral Alaska                                                               
and in  Juneau, where  he is  now a  private business  owner with                                                               
about 40  employees. He  stated that  a state  income tax  is not                                                               
going to  make his job any  more complicated than it  already is.                                                               
He has paid a state income tax in  the past and is willing to pay                                                               
it again  if it  will assure intact  education funding.  He urged                                                               
the committee to support HB 115.                                                                                                
9:46:37 PM                                                                                                                    
KARLA HART,  Juneau, said she  is a lifelong Alaska  resident and                                                               
remembers paying  a school tax on  her first earnings as  a teen.                                                               
"I was  proud to do it,  and I felt  like an adult paying  for my                                                               
education  in a  small way."  She said  she strongly  supports HB                                                               
115. So many  people have expressed support of the  bill, and she                                                               
is with them.                                                                                                                   
9:47:38 PM                                                                                                                    
JEB STUART, Wasilla, said there are  many facets to the bill. His                                                               
wife home-schools  their four  children. "It's  been entertaining                                                               
hearing the people spouting scripted  talking points." This isn't                                                               
necessarily  an "educational  bill." He  said he  has some  ideas                                                               
that  are unlikely  to  be politically  correct  but would  allow                                                               
people to live  within their means. He said  throughout the world                                                               
a boom always leads to a  bust, "and we're following in the exact                                                               
same footsteps."  A Jay Hammond  manuscript gives  a play-by-play                                                               
of what  is happening  in Alaska  as the  state continues  to not                                                               
want to hurt  anyone's feelings and supports  endeavors that have                                                               
no  economic  basis for  existence,  he  stated. He  said  Alaska                                                               
continues to ignore  the bloated cancer of big  government with a                                                               
welfare system run  amuck, which is a recipe for  disaster. It is                                                               
stupid to look around at all  the other states and countries that                                                               
have  made the  same choices  by taking  away the  constitutional                                                               
right to benefit from natural  resources. "They destroyed our tax                                                               
base  by  taxing  businesses  and the  middle  class  until  they                                                               
leave."  Alaska's responsibility  is to  its children,  he added,                                                               
and it needs to make hard  choices to cut welfare "way back." For                                                               
example,  a person  should not  be helped  if on  drugs. "If  you                                                               
can't  get  your stuff  together  and  take  care of  your  kids,                                                               
there's  options." For  those who  live in  a complex  with other                                                               
people, he  added, and who  buy their food  at the rice  and bean                                                               
store,  "you reattach  a  stigma  to being  on  welfare and  help                                                               
people  who  truly need  it."  No  welfare  for people  who  make                                                               
$80,000 a  year who know how  to work the system,  he said. There                                                               
should be  no people with new  houses and new cars  buying pieces                                                               
of candy  for their kids. If  the community can't make  it on its                                                               
own,  "we  don't  subsidize  it,"  he  stated.  "Nobody  we  know                                                               
supports using  the dividend,  which, as Jay  Hammond said,  is a                                                               
discernable share, which is our  portion of the natural resources                                                               
that the  legislature is to  use for  the maximum benefit  of the                                                               
Alaskan  people   or  an   income  tax   to  support   a  bloated                                                               
government." He said he supports the Dunleavy plan.                                                                             
9:51:28 PM                                                                                                                    
MARY  KATASSE, Juneau,  said she  is originally  from Hoonah  and                                                               
moved to Juneau for work. She noted  that she is part of a family                                                               
of eight, including two employed  parents, an elder, a caregiver,                                                               
and three adopted  special needs children. She  questioned HB 115                                                               
and noted a comment by the  chair saying that it is not earmarked                                                               
for education. Her concern is  that her kids' special needs money                                                               
goes to the school,  and it makes it hard to  use those funds for                                                               
what  is needed.  She  said,  "We make  moderate  money; we  have                                                               
supported local  businesses and  Alaska businesses  in Petersburg                                                               
and Juneau  … with homes,  boats, and  cars." The one  thing that                                                               
she is against is removing  funds from education and the elderly.                                                               
Her family  has always believed  that those who can  help, should                                                               
help. Alaska's  situation took  40 years to  make, she  added. It                                                               
cannot be  fixed this session,  and she appreciates the  time and                                                               
effort to correct an error that's  been building for 40 years. "I                                                               
don't mind paying  my own, because we do pay  our own," she said,                                                               
in terms of federal and local  taxes. She said her worry is about                                                               
the people  who can't  pay. The PFD  cuts affected  many families                                                               
who are  in poverty, and the  income tax would affect  seniors on                                                               
fixed incomes. She  said she is neither completely  in support or                                                               
against HB 115. She said not  to further cut education or the PFD                                                               
for those in need, and then she can support of HB 115.                                                                          
9:55:47 PM                                                                                                                    
DARRELL SMITH, Juneau,  said he is a  disabled, retired operating                                                               
engineer union member,  and in 2008 the legislature  asked him to                                                               
take a voluntary  wage and benefit cut to help  with this crisis.                                                               
"We voted  that in ourselves,  without any pressure  from anybody                                                               
else." He  said Click Bishop  can verify that. He  hears teachers                                                               
whining  and  whining  and  whining,   but  he  doesn't  see  the                                                               
teachers' union offering any cuts  to wages or benefits. There is                                                               
a school  administrator in Anchorage  making a million  dollars a                                                               
year. He  said he has a  friend who just orders  food "up there,"                                                               
and he  makes $150,000 a year  from the school district.  He said                                                               
there needs to be a stop  to stealing children's money. He stated                                                               
that he is against HB 115, and he  will do his part by not filing                                                               
for the  PFD. "That's my  part," he  said. His daughter  has five                                                               
children and  just bought a  house, and she  is maxed out  on her                                                               
income. House  Bill 115 will ruin  her credit, make her  lose her                                                               
home, and  his grandchildren will  also lose their home,  "so cut                                                               
your bloated  government some more,  and if the  public employees                                                               
union don't  want to  give anything  back, cancel  their contract                                                               
and send  them to  arbitration, and cut  their wages  anyway, and                                                               
let them  deal with it  in the courts." He  said that is  what he                                                               
would do if he was the governor.                                                                                                
9:58:03 PM                                                                                                                    
DAN DUNAWAY,  Dillingham, said he  supports HB 115 and  urged the                                                               
committee to  pass it. There  have been some good  suggestions on                                                               
how to  improve it, including  from a  Juneau man and  from Jason                                                               
Gustafson, and  he hopes the committee  took note. He said  he is                                                               
totally opposed to the attitudes  of Senators Dunleavy and Kelly.                                                               
They are  unrealistic and do not  contribute to a solution.  As a                                                               
resident of  Dillingham, he hears people  from bigger communities                                                               
asking for  cuts to  bloated government, but  they can't  see the                                                               
impacts of  the cuts out here  in his rural community,  which are                                                               
very  real   and  happening  right  now.   Road  maintenance  has                                                               
significantly declined,  and the city  is down to bare  bones and                                                               
turning  the heat  down. "We  barely have  a viable  library; our                                                               
schools  are  cutting  back  on   projects,"  he  explained.  His                                                               
community is  seeing it daily.  The boat harbor is  struggling to                                                               
stay functional,  even though fees  have been  raised. Dillingham                                                               
tried  to tap  some of  the nonresident  income by  expanding its                                                               
borders,  but  that  effort was  defeated.  "We  can't  bootstrap                                                               
ourselves," but  an income tax  would work. He sees  thousands of                                                               
workers   in  the   area  packing   their   money  home   without                                                               
contributing, and some are very  vigorous about avoiding spending                                                               
any money in  the state, from low-paid processor  workers to some                                                               
very, very  wealthy commercial fishermen, he  noted. Improvements                                                               
can be  made, he added,  but he urged  the committee to  move the                                                               
bill forward.                                                                                                                   
10:00:18 PM                                                                                                                   
KURT SCHMIDT,  Delta Junction, said  he is  opposed to HB  115 at                                                               
several levels.  The legislature  has failed  to cut  spending to                                                               
match  revenue, and  members have  been  deceptive about  applied                                                               
cuts and  obscure with  the facts.  "You disregard  the (unclear)                                                               
suspending the  incoming revenues indicative that  the facts that                                                               
motivate  your decision-making  processes," he  said, "and  these                                                               
aren't the same facts and  realities that the voters must contend                                                               
with in  their homes."  Citizens don't  get bribes  and kickbacks                                                               
from lobby groups for  fiscally irresponsible decision-making, he                                                               
explained, and many legislators shamelessly  do. To impose such a                                                               
heavy  tax  on Alaskans  will  create  a measurable  hardship  on                                                               
families that  reside here.  The tax  grossly favors  the wealthy                                                               
and  punishes  the  poor  and   middleclass,  he  explained.  The                                                               
exponential disparity  in the proposed tax  is very discouraging,                                                               
if not  punitive, to the  poor and middleclass. A  person earning                                                               
just under $50,000  pays 2.5 percent of their  income, or $1,250.                                                               
A person  earning $100,000  will only pay  2.9 percent,  which is                                                               
only 0.4  percent more,  yet they  earn twice  as much  money. He                                                               
pointed out  the disparity between  disposable income  versus the                                                               
amount of  tax. A  person earning just  under $200,000  pays only                                                               
3.9  percent,  which is  only  1  percent  higher than  the  last                                                               
bracket,  but  as  wealth  increases,   so  does  the  amount  of                                                               
disposable income,  so the  poor will pay  a great  proportion of                                                               
their disposable income.  A wealthy taxpayer will pay  a mere 1.9                                                               
percent higher tax  while earning five times more  money, and the                                                               
loss to their  disposable income will be  negligible. Assuming an                                                               
income  of $30,000  is the  minimum for  a comfortable  living in                                                               
Anchorage-enough to  rent an apartment,  pay utilities,  and have                                                               
mediocre health care  and modest clothing-that would  mean that a                                                               
person who earns  just under $50,000, can consider  40 percent of                                                               
their income as disposable; however,  70 percent of the income of                                                               
a  person  making $100,000  is  disposable.  A person  who  earns                                                               
$200,000 means that 80 percent  of their income is disposable, so                                                               
it is  disproportionate. The  tax impacts  the poor  unfairly, he                                                               
concluded. He  said a  sales tax would  be better,  because there                                                               
are  no loopholes  and corporations  that buy  supplies would  be                                                               
kicking in to the tax, instead of sheltering an income tax.                                                                     
10:04:05 PM                                                                                                                   
CORINNE  ROLLMAN, Eagle  River,  said she  is a  third-generation                                                               
Alaskan. Her  and her husband own  multiple businesses, including                                                               
a  commercial  fishing  business,  an  accounting  business,  and                                                               
multiple  rental properties,  with  18 employees.  An income  tax                                                               
would be  detrimental to  her. Alaska  has a  Denali-sized budget                                                               
and  is above  the national  average on  a per-capita  basis. She                                                               
noted that 185,000  people are on Medicaid, and  the state spends                                                               
$10  million on  legal fees  outside  the state.  Alaska has  the                                                               
highest education  costs, but  the legislature  has not  done its                                                               
job to trim fat. She opposes  an income tax, because she does not                                                               
want to  pay taxes on  her retirement  income and on  her capital                                                               
gains. She  pays far more in  property taxes, and they  pay 10 to                                                               
11 percent in unemployment taxes,  which is more than most people                                                               
pay. She  is opposed to  being taxed,  because she is  a lifelong                                                               
business owner. She said she will  not be inspired to work harder                                                               
and longer,  and she does not  want to subsidize the  tax deficit                                                               
and the  budget on  her shoulders  any more.  She noted  that the                                                               
constitution "says we  should ensure the fruits of  our labor and                                                               
not be punished by our  government." She asked her representative                                                               
to vote no.                                                                                                                     
10:06:18 PM                                                                                                                   
MICHELLE WHITE,  Palmer, said she  is a single mom,  a substitute                                                               
teacher,  and  working  on  a  second  degree  to  pursue  better                                                               
employment,  and she  is against  HB 115.  She noted  comments by                                                               
Gabrielle LeDoux:  "If the  Senate thinks they  are going  to get                                                               
out of (unclear)." She said  she works for the people. (Unclear.)                                                               
She asked  the committee not  to compromise with  the spend-crazy                                                               
House that  refuses to make  one single  cut. "Do not  succumb to                                                               
the  tantrums of  our governor,  who has  not only  one, but  two                                                               
(unclear),"  and  who  wants  to throw  more  money  at  schools.                                                               
Schools that are among the worst  in the nation and don't prepare                                                               
students  for  college, she  said.  That  is  why she  sends  her                                                               
children to private  schools, she said, and one  daughter went to                                                               
college  in the  Lower 48,  because the  university in  Anchorage                                                               
can't compete.  The governor has  the audacity to push  an income                                                               
tax. "This debate  is a farce in light of  our bloated government                                                               
and failing schools." She said  fiscal responsibility begins with                                                               
lawmakers, the governor, and school  districts, but Alaska spends                                                               
more per  student than any  other state and has  pitiful results.                                                               
She said to  not cut the PFD  or tax people to  offset "your past                                                               
overspending."  Taxes  do not  produce  growth,  she opined.  She                                                               
suggested the  committee members take  a class by Dave  Ramsey, a                                                               
"financial  guru." She  said there  will  be a  mass exodus  from                                                               
Alaska if legislators pass an income  tax, an oil tax, or cut any                                                               
part of the PFD. She moved to Alaska  11 years ago for a job, and                                                               
she has sacrificed a lot to  stay. Over that time, the government                                                               
has ballooned, and  the legislature has made  the state unlivable                                                               
in terms  of the cost of  living and job prospects.  She has read                                                               
about job  losses, and  six of  her friends  lost their  jobs and                                                               
left the  state, because it is  an expensive place to  live. She,                                                               
herself, will  leave if  the legislature taxes  her or  taxes oil                                                               
companies or  if she  cannot get  all her  PFD. Her  daughter has                                                               
known only  Alaska as her  home, and  that breaks her  heart. She                                                               
told the committee that if it  ran a household like it is running                                                               
the  state,  "you   would  all  be  divorced   and  have  runaway                                                               
children."  If  the  legislature  passes  HB  115,  "Alaska  will                                                               
divorce you."  Taxes will go up,  and there will be  fewer people                                                               
to tax.  "You work for us,"  she said, and "don't  pass an income                                                               
tax, or an oil tax, and keep your (unclear) hands off our PFD."                                                                 
10:10:51 PM                                                                                                                   
CRYSTAL SCHOENROCK,  Kenai, said  she is  against an  income tax,                                                               
because [legislators] decided that they  would take a raise every                                                               
two years, "and now we are  paying for it, because the oil fields                                                               
took a  loss, and all  of this, just so  they could have  a job."                                                               
But now,  she said,  we are paying  for it and  they still  get a                                                               
raise.  They make  $50,400 for  three  months, and  she lives  on                                                               
$12,000  per  year. She  is  getting  $746  a month  from  social                                                               
security, which "is  like giving a squirrel nuts  after it's lost                                                               
its damn  teeth," she added.  "So, now I'm  going to have  to pay                                                               
more?" She said she does not  understand, and it bothers her that                                                               
legislators are making more money, "and  we have to pay. It's not                                                               
10:12:59 PM                                                                                                                   
PHILLIP GRAY, Juneau,  said he and his wife  are senior citizens,                                                               
their  taxes are  high, and  they oppose  an income  tax, because                                                               
they are  just able to  get by. He  noted that the  Juneau Empire                                                               
reported that oil companies made a  profit of $17 per barrel last                                                               
year in Alaska,  while in most countries they make  only $1 to $5                                                               
on a  barrel of  oil. Had  Alaska kept $12  per barrel,  it would                                                               
have had  $2.2 billion  more. Alaska needs  to tax  oil companies                                                               
far  more heavily.  He  noted another  article  that stated  that                                                               
benchmarking,  or comparing  Alaska  with other  states, was  the                                                               
answer. In  previous years, Alaska  spent 5.4 times  the national                                                               
average  per capita  on  capital and  operating  costs. In  2014,                                                               
Alaska  spent 3  times  the national  average.  The total  agency                                                               
operating  budgets have  been  reduced by  less  than 1  percent.                                                               
Alaska spends  5.3 times the national  average on administration,                                                               
1.7 times  the national  average on public  welfare, and  2 times                                                               
the national  average on  education. It is  clear, he  said, that                                                               
Alaska is  spending too  much and  should cut  the 1  percent for                                                               
art. "When we spent $40,000 of  public money on the bent piece of                                                               
green  sheet metal  in front  of the  Juneau museum,  it was  too                                                               
much."  He said  Alaska should  let  artists get  off the  public                                                               
welfare  wagon.  He said,  cut  the  state  budget, tax  the  oil                                                               
companies a fair rate, and do not tax the public.                                                                               
10:15:22 PM                                                                                                                   
MIKE ALBERTSON,  Fairbanks, said  he supports HB  115, but  it is                                                               
not  the best.  Overall, Alaska  needs  an income  tax. "I  don't                                                               
think the  oil industry can solve  all of our issues,"  he added,                                                               
and the industry is underpaying  in Alaska. He refuted an earlier                                                               
comment  that service  members would  be taxed  on their  housing                                                               
allowance, nor  would they be  taxed on imminent danger  pay. The                                                               
only service members  who would pay an income tax  would be those                                                               
who declare  residency in Alaska,  he explained, and  they should                                                               
pay their taxes  just like anybody else. He said  he is heartened                                                               
by  the civil  and positive  comments of  most witnesses,  but he                                                               
noted  that  some people  referred  to  others as  Communists  or                                                               
Socialists, and  I don't take  (unclear) from  anybody, anywhere.                                                               
The Senate  has probably  made up its  mind, and  sometimes these                                                               
hearings don't go  anywhere. He appreciates Alaskans  who work in                                                               
the  state (unclear).  He said  he appreciates  the hard  work of                                                               
Alaskans  who have  lived here  for  thousands of  years and  are                                                               
taxed on  their land. Indigenous  people, he clarified.  He finds                                                               
it unfortunate that business people  are talking about packing up                                                               
and  leaving  because  they  aren't savvy  enough  to  operate  a                                                               
business  in a  state with  an  income tax.  Businesses in  other                                                               
states  have  no  problem  operating.  It  is  disingenuous  that                                                               
business people  who have done well  in the state seem  to holler                                                               
the most when it comes to stepping  up to the plate, he added. He                                                               
said that if leaving the state  because of an income tax is true,                                                               
there  would have  been a  mass exodus  of low-income  people who                                                               
have  lost half  their  dividends.  The logic  is  not there,  he                                                               
stated. The  person representing  the chamber of  commerce stated                                                               
that  Alaska would  have the  twelfth highest  income tax  in the                                                               
nation, but we would have the  fourth lowest. He said he has seen                                                               
a  lot of  polls as  well  and heard  one where  most support  an                                                               
income tax.  In 2014,  there were 2.5  nonresidents hired  by the                                                               
oil  and gas  industry for  every  Alaskan hired,  and for  every                                                               
nonresident laid off  by the industry, there  were three Alaskans                                                               
let go.  There are a lot  of out-of-state workers that  should be                                                               
contributing.   He  questioned   why  legislator   per  diem   is                                                               
increasing, because the federal per  diem rates for Anchorage for                                                               
lodging and meals have dropped.                                                                                                 
10:20:49 PM                                                                                                                   
WENDY BRINGHURST,  Eagle River,  said she,  her husband,  and her                                                               
six children came to Alaska twelve  years ago because of its "tax                                                               
structure."  Kill this  bill, she  stated. It  is a  lazy way  to                                                               
control spending.  She tells her  children to get another  job if                                                               
they want  more money. The  government takes money away  from the                                                               
citizens, she claimed, and she wants  it to stop taking her hard-                                                               
earned  money for  wasteful programs.  Everyone who  is for  this                                                               
tax,  "go  ahead  and  volunteer  your own  money  if  you're  so                                                               
convinced that it will get us  out of the hole the government has                                                               
put us in, but don't volunteer my money. Spend your own."                                                                       
10:22:26 PM                                                                                                                   
KRISTIN BELLONIO,  Anchorage, said she supports  HB 115. American                                                               
author John Greene  said public education does not  exist for the                                                               
benefit of students  or their parents; it exists  for the benefit                                                               
of  the social  order. Everyone  benefits every  day from  public                                                               
education,  she added.  Alaskans have  been fortunate  to pay  no                                                               
income tax, but it is responsible  to move forward with HB 115 to                                                               
fund  education. Schools  don't make  money, so  its value  isn't                                                               
monetary, but  it creates citizens  with knowledge and  skills to                                                               
become contributors  to Alaska's economy. That  is priceless, she                                                               
opined. She asked the committee  to prioritize education and pass                                                               
HB 115.                                                                                                                         
10:24:13 PM                                                                                                                   
CATHY MOSHER,  Willow, said the bill  should be a no  vote. Steve                                                               
St.  Clair and  Michael  Dunleavy had  a  good proposal.  Michael                                                               
Chambers has,  Brad Keetly  has. "You  have heard  a lot  of good                                                               
suggestions tonight  on how to  fix the  budget, and I  hope that                                                               
you will listen to them and do it."                                                                                             
10:24:53 PM                                                                                                                   
JESSICA PRICE, Anchorage,  said she works every night  to pay for                                                               
groceries for her husband and  three children. The passing of the                                                               
bill would  cut into  her disposable  income. She  said she  is a                                                               
property  owner, and  more tax  on her  family would  create more                                                               
devastation for her  family, and she wouldn't be able  to pay for                                                               
clothes  and  food,  and  she  would  end  up  depending  on  the                                                               
government.  An increase  in government  decreases the  money she                                                               
can spend. She asked the committee to kill HB 115.                                                                              
10:26:06 PM                                                                                                                   
ALAINA CLARK, Wasilla, asked the  committee to stand firm against                                                               
HB  115. She  is a  single  mom with  two children  and no  child                                                               
support. "I work  full time and often struggle to  balance my own                                                               
budget,"  she  stated.  She  has two  choices:  painful  cuts  or                                                               
additional  sources of  income,  and she  starts  by cutting  all                                                               
nonessential spending by not getting  a haircut or not watching a                                                               
movie. "It  might even  mean that I  make less  expensive grocery                                                               
choices, cut driving down to  necessary trips only." If she still                                                               
needs more money,  she said she looks for a  second job. The last                                                               
thing she would do is raid  her children's piggy banks. A surplus                                                               
for her  is incredibly rare, and  it goes to the  next month, she                                                               
explained. The state  needs to cut pork and  not see hard-working                                                               
Alaskans,  even  very rich  ones,  as  cash  cows to  be  milked.                                                               
Wealthy Alaskans  often supply jobs  for other Alaskans  who will                                                               
just get by. "If  we must have a tax, let it be  a sales tax that                                                               
everyone  pays."  Not everyone  works,  but  everyone shops,  she                                                               
said. Then  everyone will have skin  in the game. House  Bill 115                                                               
would foist a  tax only on working Alaskans. The  rule of use-it-                                                               
or-lose-it  has  led  to wasteful  spending  by  public  schools,                                                               
including unnecessary sound system upgrades  just to use up extra                                                               
money,  she  stated.  The Mat-Su  school  district  is  currently                                                               
gunning for  charter schools, and they  do a lot more  with a lot                                                               
less. She suggested eliminating  the use-it-or-lose-it policy and                                                               
allow schools to  save for a rainy day. An  income tax would make                                                               
it harder for everybody who works, she concluded.                                                                               
10:29:38 PM                                                                                                                   
ED MARTIN, Cooper  Landing, said he is watching  via the internet                                                               
from Hawaii,  "but I  care about my  state." The  revenue problem                                                               
exists because of  out-of-control state spending. He  said he has                                                               
been listening to  single mothers and small  businesses, "and you                                                               
folks have  an obligation to these  people to do what  is right,"                                                               
which  would be  to  sell some  of Alaska's  land  to create  new                                                               
wealth  by  private  individuals.  The  country  was  founded  on                                                               
protection  of   property  rights,  and  the   constitution  says                                                               
basically the same thing: maximum  benefit to the people. He said                                                               
his dad gave up mineral  rights when homesteading so other people                                                               
could have  homes, and then  he sold it.  He passed on  land that                                                               
was swindled out of him for  his mineral rights, he explained. He                                                               
filed for his  homestead land before statehood, and  he voted for                                                               
statehood. In the end he was  swindled out of his mineral rights.                                                               
"You  folks  don't  understand this,  apparently."  The  economic                                                               
experts at ISER never use selling  Alaska as a matrix for solving                                                               
some of  its problems. "We need  fast cash," he said.  He said it                                                               
was  terrible that  the legislature  robbed  the permanent  fund.                                                               
"The offer  that I made  you that  gives you all  political cover                                                               
for the  wrongful deeds you've done  in taking the PFD  away, you                                                               
can give  back to the people  simply in a land  voucher." He said                                                               
that is  what Alaska  needs, an  expanded tax base  and a  way to                                                               
create wealth. Do not pass HB 115, he stated.                                                                                   
10:32:56 PM                                                                                                                   
CHAIR COSTELLO  closed public  testimony on HB  115 and  held the                                                               
bill in committee.                                                                                                              
10:33:47 PM                                                                                                                   
There being  no further  business to  come before  the committee,                                                               
Chair Costello adjourned the Senate  Labor and Commerce Committee                                                               
at 10:33 p.m.                                                                                                                   

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