Rep. Groh: Constituent Meetings April 8!

Cliff Notes #7
Let's Save, Protect, and Grow
Serving House District 18
(Government Hill, JBER, and parts of North Muldoon, Downtown, Fairview, and Mountain View)

The Pace Picks Up Even More: Bad News on Revenues; The Wrong Road for Pay Raises for High-Ranking Officials; and More Chances to Tell Me What You Think at Constituent Meetings on Saturday, April 8

The Revenue Picture Gets Bleaker, Generating Talk of New Revenue Measures

The Alaska Department of Revenue issued a new forecast projecting substantially lower revenues for the State of Alaska, both during the current fiscal year that ends June 30 (Fiscal Year 2023) and the upcoming fiscal year that starts July 1 (Fiscal Year 2024). The Legislative Finance Division puts the deficit at hundreds of millions of dollars this year and more than $900 million for the year starting this July 1. The future deficits are even worse--they run from $1 billion to $2 billion each year as far as the eye can see. That's a big problem given that the current budget is $7.6 billion this year in Unrestricted General Fund (UGF) dollars, the common way to measure the budget in Alaska.

These big deficits are further evidence that the State of Alaska has a structural deficit which threatens schools, roads, public safety, and Permanent Fund Dividends. The big projected deficits are also producing more discussion of new revenues, including increases in oil taxes and broad-based taxes on individuals.

Sen. Bill Wielechowski of Anchorage introduced legislation through the Senate Rules Committee he chairs to make three changes in oil taxes. First, the legislation (Senate Bill 14) would close a loophole in the corporate income tax to make sure that Hilcorp pays taxes at a similar level as BP did. The bill aims to get large oil and gas entities organized as S Corporations (like Hilcorp) to pay the same rate as large petroleum corporations do, and does not apply to smaller S Corporations. This change could bring in about $140 million per year.

The legislation would also reduce the tax credit oil producers receive on every barrel produced from $8 to $5. The cut of $3 in the per-barrel credit could generate $400-$500 million per year.

Finally, the bill introduced in the Senate would add "ringfencing" so that oil companies who receive deductions for capital expenditures can only use them for the field in which the expenses were made. Depending on oil prices, this change could save the State hundreds of millions per year.

I will be introducing another oil tax bill. My proposed legislation would raise the oil and gas property tax from 20 mills (2 percent) to 30 mills (3 percent). This change could raise more than $200 million per year.

Additionally, Rep. Ben Carpenter of Nikiski has introduced a sales tax bill at a 2% rate that does not include meaningful exemptions to protect consumers. This would be a stealthy tax that would be hard for Alaskans to track and would also impose compliance costs on businesses. If the State of Alaska adopts a broad-based tax, I much prefer a high-earner tax that applies to large incomes made by residents and non-residents in Alaska. A high-earner tax would be more fair, more predictable, and better for the great majority of Alaskans than a stealthy statewide sales tax.

I continue to be guided by several critical beliefs as we navigate these tougher fiscal times. We need to save and grow the Permanent Fund and the Permanent Fund Dividend. I oppose cuts to the Permanent Fund Dividend as the sole or primary response to Alaska's structural deficit. I support more revenues for our state to pay for important things like raising the Base Student Allocation (BSA) to help schools; good roads; a decent retirement system for public employees that would include the Defined Benefit system; good public safety; and Permanent Fund Dividends. The State of Alaska needs a long-term fiscal plan to accomplish these goals.

You can weigh in yourself on what should be in a long-term fiscal plan by calling in the House Ways and Means Committee this Saturday, April 1, starting at 9 a.m. The email is House.Ways.And.Means@akleg.gov and phone numbers are listed below.

From Juneau - (907)586-9085
From Anchorage - (907)563-9085
Toll-Free (All other areas) - (844)586-9085

Rejecting the Proposed Pay Raises for the Governor, Lieutenant Governor, Cabinet Members, and Legislators

The Governor and his hand-picked Alaska State Officers Compensation Commission have proposed pay increases for high-ranking State officials. These proposed pay raises are the product of a process that stinks to high heaven, and the proposed raises are also excessive at this time. I am working to both stop these proposed pay raises and reform the process that produced them.

Limiting Term Limits of State Legislators

I am proud to cosponsor House Joint Resolution 12 (HJR 12) to limit legislative terms. This proposed constitutional amendment would ensure that no person who has served as a State Representative for six full terms (12 years) shall again be eligible to be nominated, elected, or appointed to that office. Additionally, no person who has served as a State Senator for three full terms (12 years) shall again be eligible to be nominated, elected, or appointed to that office.

Adoption of these term limits could lead to new members of the Alaska State Legislature who can work towards improving the State of Alaska in new ways. Term limits like these could bring more accountability, new perspectives, and increased competition for offices. The proposed HJR 12 would bring more innovation and competitiveness to the Alaska Legislature.

Speaking on the House floor with Representative Rebecca Himschoot of Sitka (House District 2), another strong advocate of increasing the Base Student Allocation and returning to Defined Benefits.

Making a point in the House Judiciary Committee.

Meetings in the District--I Want to Meet with You!

I will be hosting my last constituent Town Hall Meetings of this year’s regular legislative session on Saturday, April 8th. The three events on Saturday, April 8th, will be held at Government Hill Subway (751 East Loop Road) from 12:00 noon to 1:00 pm, Lucky Wishbone (1033 East 5th Ave) from 3:00 pm to 4:00 pm, and at Kava's Pancake House (100 Muldoon Road) from 5:00 pm to 6:00 pm. What do you care about? I want to hear from you, and I look forward to seeing you there.

Reminder to Vote in the Anchorage Municipal Election

The Anchorage Municipal Election ends on Tuesday, April 4, 2023. Ballots were mailed out to qualified, registered Anchorage voters on March 14, 2023. For more information visit www.muni.org. To sign up for notifications on the status of your mailed ballot (from outbound to accepted) visit: www.anchoragevotes.com.

Meeting with Officials

I had a good discussion with David McPhetres, Director at Alaska Military Youth Academy, and Josh Bowen, Administrative Officer for Alaska Military Youth Academy, about the critical work of the Academy. I spoke with John Boyle, Commissioner of the Department of Natural Resources, about potential revenues from carbon and a gasline, development of geothermal energy sources, and the Willow and Pikka oil projects on the North Slope.

David McPhetres, Director at Alaska Military Youth Academy, and Josh Bowen, Administrative Officer for Alaska Military Youth Academy

John Boyle, Commissioner of the Department of Natural Resources

2023 Legislative Shoot with my staff member Cillian McDonagh

I am happy to serve you. Call or e-mail any time!

OFFICE AND STAFF CONTACT INFORMATION
Phone: 907-465-4998
Email: Rep.Cliff.Groh@akleg.gov
Email: Cameron.Ebersold@akleg.gov
Email: Cillian.McDonagh@akleg.gov

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