Home Politics Statewide Politics Lawmakers Cry Foul After Industry Groups Release Report Card

Lawmakers Cry Foul After Industry Groups Release Report Card

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Photo by amboo who, Creative Commons Licensing.
Photo by amboo who, Creative Commons Licensing.

A quartet of business groups released their biennial Alaska Business Report Card (ABRC) Monday, grading members of the 29th Alaska Legislature. Unsurprisingly, minority members did not fare well.

The ABRC is compiled by the Alaska Chamber, ProsperityAlaska, the Alaska Support Industry Alliance, and the Resource Development Council for Alaska. The last two promote oil and gas development, while many on the Alaska Chamber’s Board work directly for oil companies or their subcontractors.

For example, ProsperityAlaska’s Board Chairman, Scott Hawkins, is President and CEO of Advanced Supply Chain International, a contractor advertising expertise in oil and gas, refining, and petrochemicals. Hawkins also serves on the Alaska Chamber’s Board.

Legislators’ ABRC grades are supposed to be a reflection of their votes, performance in committee meetings, and bill sponsorship as they relate to business issues.

However, the grades seem to reflect partisanship and positions on oil tax policy more than anything else.

For the second legislature in a row, nearly every member of the Senate and House minority caucuses received an F from the ABRC. Sen. Dennis Egan (D-Juneau) escaped with a D, a drop from his 2014 grade of C when he was a member of the majority.

“Minority members do cast pro-business votes from time to time… [but] in general the House and Senate minority organizations reliably come down on the side of a difficult tax and regulatory climate for the private sector,” the ABRC explained in 2014.

Egan was not the only member to see his 2016 grade change with his caucus affiliation.

Sen. Lyman Hoffman (D-Bethel), who was a minority member in the 28th legislature but switched to the majority in 2015, saw the biggest jump in his grade, rising from a D- to an A-.

After switching to the majority caucus in February, Sen. Donny Olson’s (D-Golovin) grade improved from D to C.

No other Senate majority member received below a B-.

Senate Resources Chair Cathy Giessel (R-Anchorage), who is running for re-election against AFL-CIO President Vince Beltrami and vocally supported an oil tax credit bill that did not include the more significant changes recommended by a working group she chaired, received her third-straight A+ from the ABRC.

Musk Ox Coalition Punished By ABRC

Conversely, the six legislators of the self-described Musk Ox Coalition, House majority members that opposed their caucus’ plan to move $5 billion from the Permanent Fund earnings reserve last year, all received grades no higher than D+.

It is believed that the Musk Ox Coalition and current minority members could form a bipartisan majority in the next legislature, depending on the results of the election.

All Musk Ox members who were not freshmen in the 29th legislature saw their grades drop. Rep. Gabrielle LeDoux’s (R-Anchorage) grade plummeted from A to D+, the second largest change after Hoffman.

Musk Ox members joined House minority members in voting for an oil and gas tax credit reform package negotiated by Rep. Paul Seaton (R-Homer) and Rep. Tammie Wilson (R-North Pole). The compromise would have saved $2 billion over eight years, while rolling back many of the tax breaks in 2013’s SB 21 favored by the oil industry and ABRC.

Senators Bert Stedman (R-Sitka) and Gary Stevens (R-Kodiak) both voted against SB 21 and received C grades the following year. Their grades both improved this year.

The Seaton/Wiilson Compromise was gutted by the Senate Finance Committee, co-chaired by Sen. Anna MacKinnon (R-Eagle River), who received an A from the ABRC.

In a losing effort, Seaton stood by his compromise on the House floor. His grade fell from C in 2014 to D- this year.

Meanwhile, Wilson abandoned the compromise and voted for the Senate version of the tax credit reform bill. Her 2016 grade is B+.

ABRC Sets Priorities, But Grades Don’t Seem to Match

The ABRC sent letters to legislators at the beginning of each session outlining its priorities, which include cutting the budget, progressing a gasline, and leaving SB 21 in place.

The 2015 and 2016 letters are nearly identical, except the ABRC recommended a structured use of the Permanent Fund earnings reserve in 2016. All four members of ABRC signed a separate August 2015 letter to Gov. Bill Walker again urging use of the Permanent Fund.

But the Alaska Chamber immediately criticized Walker when he made the Permanent Fund the centerpiece of his fiscal plan. The American Legislative Exchange Council (ALEC) also attacked the plan, citing claims from ProsperityAlaska that the State is overspending.

Every member of the majority caucus, including the Musk Ox Coalition, voted for the last two budgets, which have brought spending down to FY 2007 levels. Adjusted for population and inflation, the budget is in line with those of the early 1980s.

While the ABRC explains that “official votes… can sometimes be misleading,” it seems clear from the disparate House majority grades that cutting the budget is not the organization’s top priority.

Similarly, while the ABRC listed use of the Permanent Fund as a priority, its grades do not align with the votes of House Finance members on the Permanent Fund Protection Act (PFPA).

Representatives Lynn Gattis (R-Wasilla), Lance Pruitt (R-Anchorage), and Dan Saddler (R-Eagle River) all received a grade of A-, the highest issued in the House. Yet they all voted against moving the bill to the House floor.

The PFPA died in House Finance.

House Finance Co-chair Mark Neuman (R-Big Lake) reluctantly voted to move PFPA to the floor, but his grade fell from A to B-.

Rep. Wes Keller (R-Wasilla) and Rep. Bob Lynn (R-Anchorage) saw the same changes in their ABRC rating Neuman did, though they are both supporters of budget cuts and opposed use of the Permanent Fund earnings reserve.

Keller, Lynn, and Neuman all face primary challenges.

Monday, the day ABRC grades were released, was the first day of early voting in the primary election.

Rep. Bob Herron (D-Bethel), who was promoted to majority whip, is being primaried from the left by Democrat Zach Fansler. Perhaps coincidentally, Herron’s ABRC grade rose from C to B.

While a satisfied Senate majority simply tweeted a link to the grades on Monday, the House minority said in a press release that the grades come from “a group of organizations that support continued giveaways to the oil and gas industry.”

House Majority Leader Chris Tuck (D-Anchorage) says he wears his “F grade as a badge of honor because I am fighting for the future of Alaska, not the failed policies that have contributed to our ongoing and growing fiscal crisis.”

In a post on its Facebook page, the Senate minority added, “If you look at the legislators who received failing grades, it’s a Who’s Who of those of us fighting hard for a fair and balanced fiscal plan, starting FIRST with oil tax credit reform, not your pfd check. That’s right. WE’RE PROUD OF THOSE Fs! We’re proud that we’ve failed this partisan industry test, because that means we’re not failing YOU.” (emphasis in original)

Craig Tuten moved from Florida to Alaska with his wife Rachael in 2006. He studied history at Florida State University while everybody else was having a good time. It is hard to list a low-wage job he hasn't briefly held.

3 COMMENTS

  1. Craig – Senator Giessel voted for tax credit reform (HB 247). She led the effort in the Senate to eliminate the Cook Inlet credits – 65 % of the tax credits are for investments made outside of the North Slope. HB 247 also made changes to the North Slope tax structure to and raised taxes, and reduced our credit exposure. You might want to correct the error in your post.

    • Hank, you’re correct that Sen. Giessel voted for the Senate Finance version of HB 247. I intended to point out that the bill for which she voted did not include provisions against piercing the four-percent floor. It also did not address the Net Operating Loss credit on the North Slope, as her Senate Resources version originally did. I agree that the wording could be better. I’ll make a recommendation to have it changed. Thanks.

  2. The Fraser Institute ranks or grades oil and gas governments and Alaska always ranks last in the USA year after year!

    I believe if the Alaska legislature had more pro oil and gas leaders maybe Alaska could be number one in the nation for a change!

    See report. I feel Alaska needs to elect oil and gas commissioners and the Attorney General so the people of Alaska can be better served.

What do you think?