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Legislative Updates :: Capital Notes 02/27/07 Capital Notes 02/27/07 Back At It Another couple of weeks have gone by since our last report and the legislature has kicked things into a higher pace.at least there is buzz in some offices. To start, most House Budget subcommittees have wrapped up their work with the full House Finance committee expected to take up the state's operating budget in coming weeks. The State Chamber had its annual legislative fly-in, Sen. Lisa Murkowski met with lawmakers, the Governor signed the first bill of the session and the Legislature is back at it with two PPT related bills aimed at BP's deductions for pipeline fixes. Budgeting Power-Who has it? As you may recall, the Governor laid down the gauntlet requesting that the legislature cut $150 million out of this year's budget. Many budget subcommittee members are finding it difficult to meet the Governor's challenge and in some cases are recommending budget increases. We will keep you informed as the budget process develops, but it looks like it could be a divisive issue between the legislature and the Governor later on in the session. Ultimately, if the Governor wants to cut the budget she may have to pull out her line item veto and hack away the $150 million herself. Education Funding-"Press 5, Top Floor, Finance Committee Please!" Education funding is up across the board; however, with extra money coming in the form of many different bills sponsored by the Governor and legislators alike. HB 97 raises the amount of funding appropriated to the Teacher's Retirement System (TRS) from $170 million to more than $240 million. The bill as it currently is written has the state pick up a greater share of the teacher's retirement system allowing local communities to contribute less or use the money for more important city services. Watch this one closely, as this may have an affect on local property taxes. The extra funding is expected to provide approximately $400 in additional buying power per student in the Base Student Allocation for the local school districts. The bill goes to the House Finance Committee next. First Bill Signed Overturns Murkowski Policy The Governor signed the first bill of the session into law on Tuesday of this past week. The bill makes many changes to how a governor exercises the pardon authority. As you may have read in your local newspaper, former Governor Murkowski made pardons in the last few days before leaving office. This angered many in the legislature and the victims of those people who received pardons. Rep. Ralph Samuels sponsored the legislation that quickly breezed through both legislative bodies. The bill makes changes to the time line when pardons go into effect and ensures that there is a notification system in place for victims. This is not the first time the legislature has gone after Murkowski's previous work as Governor. So far, the Palin administration has struck down a number of last minute board appointments. Currently, the legislature is working with the new governor to redo the coastal zone management program, which was just re-worked by the Murkowski Administration. Other Murkowski administration issues under attack are: longevity bonus termination, studded tire tax, business license fee, PPT, and gas line contracts to name a few. Legislative Fly-In at the Capital City Many of Alaska's business leaders-all of which are members of the Alaska State Chamber of Commerce -came to the Chamber's annual fly-in. The two-day event held at the Baranof Hotel February 13 and 14, allowed for many chamber members to meet and learn from Alaska's elected officials. Representing Alaska's businesses, the State Chamber carries considerable weight in Alaskan politics with the Governor hosting a special reception to meet with chamber members, and Legislative leadership setting some time aside to speak at chamber events. At the Governors reception, the Governor and each Commissioner in town for the day, met at the Governor's Mansion and made it clear that Alaska was indeed a business-friendly state. Senate President Lyda Green, Speaker John Harris, Senate Minority Leader Gene Therriault, provided chamber members with leadership perspectives. Sen. Bert Stedman, Sen. Johnny Ellis, Sen. Gary Stevens, Michael Lamb-CFO Fairbanks North Star Borough, DNR Kevin Banks, Rep. Mike Hawker, and Rep. Ralph Samuels gave presentations related to the State Chamber's top five priorities. A special note of thanks goes to Rep. Hawker for providing one of the more funny and matter-of-fact speeches. Also a similar note of thanks to Rep. Samuels for cramming in a two hour presentation on Natural Gas Pipelines into a 1 hour power-point performance. Sen. Lisa Murkowski in Juneau This past Thursday, Sen. Lisa Murkowski met with members of the legislature addressing many of Alaska's problems including global warming. She noted that Alaska had the ability to show the nation how we can adapt to environmental changes while helping prevent an increased rate of change. Sen. Murkowski was in Anchorage earlier in the week and was expected back in Washington D.C in time for reconvening of Congress on Monday. Container Tax-As Borat would say, "Whaaat?" In mid January, your state chamber president was already on the phone calling the Palin Administration, members of the Legislature and sharing his concerns with businesses across the state about Washington State's container tax bill. SB 5207, Washington State Sen. Mary Haugen sponsored the bill as a way to tax every shipping container coming in and out of the State of Washington. Since Alaska receives 70 percent of all goods via shipping containers, the affects on Alaska alone would be horrendous. How does this affect you? The tax would be a $50 dollars per 20ft of shipping container. This is estimated to cost $45-60 million total in increased shipping costs across the state. In many Alaskan communities, 90-100 percent of all shipped goods come via containerized loads. So the affects on the price you pay for materials, for consumer goods, for things you need to run your business would likely increase as the cost of shipping goods would go up. The State Chamber also passed a resolution at its Board meeting on February 13 that was delivered to the Sponsor of the tax and to the Governor of Washington State. The chamber has backed Rep. Bill Thomas' HJR 8, a state legislative resolution, opposing the container tax. Rep. Thomas has insured us that if the bill gets moving he will send down his staff or fly-down personally to testify in the State of Washington. Currently, the container tax is buried in committee, which is where we hope it will stay. Fiscal Plan-Still a Chamber Priority The State Chamber has recently supported Rep. Mike Hawker's and Rep. Max Gruenberg's HB 125 which mandates that when the Governor puts together the annual budget for legislative review, that the Governor must also put together a financial plan 10 year into the future. The plan would require showing all expenditures and revenues including budget accounts and permanent fund earnings. While it is not a perfect system, HB 125 would provide the legislature and the public with a basic plan that would be updated each year. We say it is about time, we expect nothing less of a prudent forward-thinking business. PPT- Is it back again? As you may remember, most of last year's legislative session was dominated by redoing Alaska's production tax on oil, which famously became known as PPT. Under the bill, oil companies would pay more in tax but part of that tax could be deducted in a complicated formula allowing for deductions based on money spent in Alaska. SB 80 and HB 128, garnering almost 2/3 of the legislature as sponsors, changes the PPT formula again, allowing the Commissioners of DNR, DOR, DEC, and AOGCC the ability to disallow costs associated with "improper maintenance" saying you may not use deductions associated with maintenance. Alaska is already a tricky place to conduct business, much less predict the weather or Alaska's changing political paradigm. To change the course of PPT, less than a year after enactment, may be sending the wrong message to all of Alaska's businesses. For Alaska to become a truly prosperous state, Alaska needs to develop a stable plan for fiscal spending. Stable fiscal planning allows for a stable economy, which allows for a stable tax structure, and a stable environment in which business can operate. Without a stable economy, Alaska's businesses face uncertainty, which leads us back to PPT. In less than a year, the legislature aims to change how things work in Alaska's business environment. Maybe now more than ever we need a fiscal plan. We will keep you informed on SB 80 and HB 128. Both bills are up in committee this week. The State Chamber of Commerce Again, if there is an issue that you and your business would like to bring to the attention of the State Chamber, do not hesitate to contact the staff of the State Chamber of Commerce. Back to top Following Legislation? Any person can follow the legislative process and access new bills, committee substitutes or figure which legislator is on a particular committee in the Legislature's Bill Action and Status Inquiry System (BASIS). You can see what committee a bill is in, when it will be heard, how committee members voted, and much more. You can also view all bills relating to your specific areas of interest by selecting "Subject Summary" from the menu on the right. Just click on the link below and bookmark it for later use. http://www.legis.state.ak.us/basis/start.asp Juneau Headquarters: 217 Second Street, Suite 201, Juneau, AK 99801 Phone: 907.586.2323, Fax: 907.463.5515, Email: info@alaskachamber.com Anchorage Office: 601 W. 5th Avenue, Suite 700, Anchorage, AK 99501 Phone: 907.278.2722, Fax: 907.278.6643 Copyright © 2003 - Present, The Alaska State Chamber of Commerce, all rights reserved. Designed by WebWeavers Technology Group LLC™ |
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