Stevens briefs Homer on PFD, oil taxes, other issues

On a recent visit to Homer, Sen. Gary Stevens, R-Kodiak, spoke to a group of about 15 area residents on Nov. 9 at Captain’s Coffee.

The first order of business? Former Rep. Paul Seaton, now an advocate for the Fair Share Tax initiative, got Stevens to sign the petition to put oil and gas tax reform on the 2020 election ballot.

Stevens said he agrees with looking at reasonable ways to reduce the state budget, but “when it comes to increasing our revenues, we need to talk about those as well,” he said. “One issue is an increase on taxes on oil companies. I don’t think they’re paying their fair share. I was one of two senators who voted against (former) Gov. Parnell’s giveaway to oil companies.”

If it gets on the ballot and voters pass it, the Fair Share Tax would change how taxes are collected on the North Slope’s three legacy fields of Prudhoe Bay, Kuparuk and Alpine. Fair Share supporters say the change would recover $1.2 billion in revenues. That could help balance the budget without other taxes like a personal income tax or reducing the Permanent Fund dividend even more.

“If we use the money from the Permanent Fund and increase taxes on oil companies, we might be OK,” Stevens said.

Stevens also confirmed another 2020 election question: He intends to run for re-election to Senate District P, the district that includes Homer and Kodiak. Stevens has been in the Senate since 2003 and before that served in the House.

The Permanent Fund is one bit of good news for the state, Stevens said. The percentage of market value approach to using the Permanent Fund takes 5% annually out of the fund.

“Just so you know what really good shape we’re in .. We’re in really good shape when it comes to the (percentage of market value),” Stevens said. “… It’s logical. It’s reasonable. Most experts say we can take 5%.”

That amount can be used to fund the PFD, fund government and be reinvested back into the corpus of the Permanent Fund, Stevens said.

He also noted some other good news, at least from the Alaska Legislature’s perspective — a recent court victory which upheld forward funding of education. Forward funding provides education funding to school districts before the end of the school year so districts have a reliable understanding of the next year’s budget. That helps districts avoid having to lay off teachers because of budget uncertainty. The legislature forward funded $1.2 billion that former Gov. Bill Walker signed off on. Gov. Mike Dunleavy wanted to veto that and it was taken to court.

“We didn’t think he could because Gov. Walker had signed it,” Stevens said. “… I think our attorney did a great job, making our points why this should not happen. The governor did a poor job.”

Stevens thought the Legislature’s case would hold up on appeal to the Alaska Supreme Court.

Also not going well for Dunleavy is the recall movement, Stevens said. Recall backers got enough signatures to move the question forward, but the Division of Elections rejected the grounds for the petition on the advice of Attorney General Kevin Clarkson. The recall group is appealing that ruling.

“In Cordova, more people signed that petition than voted in the last election,” he said. “… Of course, Cordova is unhappy about what happened to the Marine Highway System.”

However, Stevens said he didn’t sign the petition.

“I have to work with the governor,” he said.

Dunleavy also faces another challenge, Stevens said — two big budget items that could start the next fiscal year’s budget about $500 million in the hole before any more cuts come. The state has two big debts on its plate, funding for the state retirement system and debt for Medicaid.

On some of the budget cuts and vetoes Dunleavy made in the last session, Stevens said he was shocked by the initial 45% cut in state funding to the University of Alaska. He said he worried what the cuts would have meant to branch campuses like the Kachemak Bay Campus.

“That sort of cut would have been devastating,” Stevens said.

Stevens said he anticipates more cuts next year, like 10% to the education foundation formula. Out of $1.2 billion, “that cut would be $120 million,” he said.

After his short talk, Stevens took questions. One man asked if the legislature might be open to passing a statewide single-use plastic bag ban, as has happened in Homer, Soldotna, Anchorage and other cities.

“It makes common sense,” Stevens said of a bag ban.

However, a statewide ban might be difficult, he said.

“… It’s a long, hard process,” Stevens said. “I’m glad communities are moving ahead without our direction. I think you’re right there should be some consistency.”

On a question about a personal income tax, Stevens said he’s not sure that’s the right choice. It’s also probably dead in the water in the Senate.

“It will not pass the Senate,” Stevens said. “We have some super conservatives there. I’m not even sure it would pass the House.”

Kenai Peninsula Borough Assembly President Kelly Cooper attended the meeting along with Rep. Gary Knopp, R-Soldotna. Cooper, who recently announced her intent to run for House District 31 against Rep. Sara Vance, R-Homer, asked about issues regarding the closure of a state highway maintenance station near Turnagain Pass and a reduction in plowing hours.

“The feedback we’ve been receiving is the (Alaska) fuel tax is so much lower,” Cooper said. “Do you foresee that being increased?”

Stevens said that’s possible and could raise transportation revenues. “We certainly could,” he said. “… That’s one way we could do it.”

He also said he has concerns about the Alaska Department of Transportation and Public Facilities support for the Alaska Marine Highway System.

“I don’t usually buy into conspiracy theories, but … I think the Department of Transportation wants the Marine Highway System to fail,” he said.

Coastal communities have become dependent on state ferries. Kodiak can afford a few less trips, Stevens said.

“In Cordova, they’re totally dependent on it,” he said. “If they don’t have a Marine Highway System, there’s no way out. There’s no road out. … They’re stuck.”

On a question about the Pebble Mine, Stevens said he agreed with the other Sen. Stevens — the late U.S. Sen. Ted Stevens.

“Stevens said, ‘The wrong mine in the wrong place,’” he said. “I think he’s right.”

After the town meeting, Stevens met for a short interview with the Homer News. He elaborated on the Fair Share Tax and a possible income tax. He noted that if the tax makes the ballot — it has to gather enough signatures before the next session starts in January — the Legislature can intervene and pass a similar bill before the fall 2020 election.

As for an income tax, another issue with that as increasing revenue is the long lead time to set up a means to collect it, about a 3-year process before income would come in. On the question of having an income tax and a high PFD or no tax and a lower PFD, Stevens said he liked not having an income tax.

“Everyone says they deserve that PFD,” he said. “On the other hand, everyone receives the benefit of state services. … Is it fair to everyone to pay a little bit into the services they are using? That makes sense.”

A Republican moderate, Stevens said he thinks the Legislature needs that voice.

“We don’t need to be more divided,” he said.

Stevens mentioned Ted Stevens and how we worked across the aisle.

“I think that’s an important principle,” he said. “You work across the aisle. … It doesn’t create a lot of friends in the extreme camp. That’s OK.”

That perspective plays well in his district, Stevens said.

“There have been no gangs with pitchforks out to get me,” he said. “… I feel fortunate to have the district I have. If I’m moderate, it’s only because my district is moderate.”

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Sen. Gary Stevens, R-Kodiak, listens to a question during a town meeting on Saturday, Nov. 9, 2019, at Captain’s Coffee in Homer, Alaska. (Photo by Michael Armstrong/Homer News)

Sen. Gary Stevens, R-Kodiak, listens to a question during a town meeting on Saturday, Nov. 9, 2019, at Captain’s Coffee in Homer, Alaska. (Photo by Michael Armstrong/Homer News)