Dunleavy sworn in as recovery continues from Friday quake

NOORVIK — As Noorvik elders sang “Arigaa” in the high school gymnasium, Mike Dunleavy was sworn in 40 miles across the frosted tundra in Kotzebue to become the 12th governor of Alaska. More than 100 villagers, elders seated in the front row, watched live-stream video of the ceremony and roared with cheers when Dunleavy’s wife, Rose, who lived in Noorvik, appeared on the screen. Watch the video here. Third-graders sang “My Country 'Tis of Thee” in Inupiaq. Speakers talked about keeping Southcentral Alaska, still reeling from a massive earthquake, in their prayers. A persistent fog thwarted Dunleavy’s plans to hold the inauguration in this Inupiat village of 669 people, and former Gov. Bill Walker stayed in Anchorage to grapple with the aftermath of the 7.0 quake. Dunleavy told the crowd that the people of Kotzebue whipped together a swearing-in ceremony just 90 minutes after the decision was made to divert to that hub city. The Alaska Constitution calls for the governor-elect to be sworn in before noon, and a Dunleavy spokeswoman said he was traveling with a judge and would take the oath on the airplane if necessary. “This is how we do it in rural Alaska," Dunleavy told the audience of mostly Alaska Natives, vowing that he would make public safety, particularly in the Bush, a top priority. “I’ll never forget you," said Dunleavy, who worked as a teacher and school superintendent for several years above the Arctic Circle. Plans change amid earthquake recovery (via Becky Bohrer, Associated Press) Dunleavy initially planned to make a 65-mile trek by snowmachine from the Western Alaska hub city of Kotzebue to Noorvik for the swearing-in. Noorvik is a tiny Inupiat Eskimo village above the Arctic Circle where his wife, Rose, is from. But transition spokeswoman Sarah Erkmann Ward said those plans would have required an overnight stay in Kotzebue. Given the ongoing earthquake response, Dunleavy decided to abbreviate his trip, she said. He plans to fly to Noorvik on a private charter from Anchorage on Monday, she said. Rural Noorvik mainly is accessible by plane and boat, on the Kobuk River. Locals commonly get around using snowmachines and ATVs. Dunleavy said he has been in close contact with Gov. Bill Walker about the emergency response. And Walker said Friday he did not expect the recovery to be affected by the transition in administrations. Walker said his administration advised Dunleavy's team of what it was doing and that some members of Dunleavy's team were involved in what Walker's administration was doing. A magnitude 7.0 earthquake rocked Anchorage and other parts of Southcentral Alaska on Friday, shaking buildings, buckling roads and spawning nerve-wracking aftershocks. Walker said Sunday he and Lt. Gov. Valerie Davidson would not attend the swearing-in and instead would stay in Anchorage to help with reopening state buildings. Walker’s term expires at noon Monday. He said he wished Dunleavy well. It is unusual, but not unprecedented, for an Alaska governor to be sworn in outside the capital city of Juneau, though Dunleavy's ceremony will be the first to take place above the Arctic Circle. Former Govs. Sarah Palin and Sean Parnell had their events in Fairbanks, one of Alaska's largest cities. The swearing-in typically kicks off a celebratory season for new governors. Dunleavy previously announced events around Alaska during December. Dunleavy has just six weeks before the start of the next legislative session, when Alaskans will be watching to see how he plans to act on key campaign pledges. He rankled some when shortly after his election, his transition chief sent letters to about 800 at-will state employees asking them to offer their resignations and indicate whether they wanted to continue working under Dunleavy. "The Chief Executive is the one responsible for ensuring that the right people are in place to best fulfill the promises made and restore trust between the people and their government," Dunleavy said in a statement. During the campaign, Dunleavy said he wanted to limit government growth and reduce spending, though was criticized for failing to offer many specifics. Details are expected in his budget plan. Debate also is expected over whether, or how far to, unravel a major criminal justice overhaul amid an ongoing public outcry over crime. One of the big issues in the campaign was the future of the annual check Alaskans receive from the state's oil-wealth fund, the Alaska Permanent Fund. Dunleavy said he supported a full payout of the check and paying Alaskans the amount they missed out on when annual checks were capped. Preliminary budget estimates suggest those pieces alone could cost $4.3 billion, though Dunleavy said he saw it as a way to help restore trust with Alaskans. The check has been capped since 2016 amid a budget deficit. Legislators earlier this year began using fund earnings to help fill much of the deficit. Earnings are used to pay the yearly check, setting up a political fight. Sen. John Coghill, a North Pole Republican, said resolving debate over the dividend is critical, and some methodology for a dividend will need to be advanced. He said he does not favor repaying money from the past three years and doesn't think a full dividend under the current formula is a "slam dunk," either. "I think it'll be a painful, deliberate and highly volatile discussion," he said. Anchorage Sen. Mia Costello, the incoming Senate majority leader, said legislators have heard from Alaskans that protecting and growing the dividend is important. She said she's dedicated to that. “What form that takes has yet to be decided,” Costello said, noting the discussion needs to go beyond the legal formula that has not been followed since 2016. She said she will look for long-term sustainability of a “healthy” dividend.

Begich on calls to drop out: “I’m in the race”

The race for Alaska governor looks to be a three-man contest, though some are still seeking to pressure the Democratic challenger to bow out. That Democrat, Mark Begich, said he’s not going anywhere: “I’m in the race,” he said. During the Aug. 21 primary, Republican former state Sen. Mike Dunleavy advanced to the general election, where he is expected to face Begich, who was unopposed in the Democratic race, and Gov. Bill Walker, an independent who skipped a head-to-head primary fight with Begich and instead gathered signatures to appear on the November ballot. Walker’s move was intended to ensure that he could run as a team with his Democratic lieutenant governor, Byron Mallott. Walker in 2014 changed his party affiliation from Republican to undeclared in forming a so-called unity ticket with Mallott that was backed by Democrats. Some Democrats and independents worry that Begich and Walker will split the vote and hand the race to Republicans. But Begich has said he wouldn’t have gotten into the race if he didn’t think he could win, and he and Walker have each been full-steam ahead with their campaigns. A former chairman of the state Democratic party, Don Gray, has circulated a petition, asking Begich to withdraw. Those who have signed include members of Walker’s administration and others who support Walker. Jay Parmley, executive director of the Democratic party, called the petition a campaign stunt. He said Begich was willing to get in a three-way race “because he knew where this was going.” “I still spend a fair amount of time telling people, take a deep breath. This is doable,” Parmley said, adding later: “I don’t know where anyone thinks this is easy. I don’t think it’s easy if it were a two-way race. I think we’re going to have to fight for every vote we get but we know what we’re doing.” Libertarian William “Billy” Toien is also running. Dunleavy on Tuesday topped a crowded field in the GOP gubernatorial primary that included former Lt. Gov. Mead Treadwell, who had fashioned himself as the more experienced candidate. Dunleavy in January left the state Senate after five years to focus on his campaign. While a senator, he clashed with GOP leaders over cuts to the annual check Alaskans receive from the state’s oil-wealth fund and over what he saw as insufficient cuts to the state budget. Dunleavy said he likes his chances against Walker and Begich. “I feel we’re on the right side of the issues,” Dunleavy said Tuesday night. “I feel that Alaskans want to send somebody down to Juneau that they feel is going to fight for them.” Juneau is the state capital. Begich said he plans to outwork his opponents and continue to travel the state to share his message with Alaskans. He said a majority of Alaskans are looking for a change. “The majority is not with the current governor. The majority of Alaskans are looking for something different,” Begich said. In the Democratic U.S. House primary, independent Alyse Galvin advanced to challenge GOP incumbent Rep. Don Young, 85. Young is the longest-serving member of the U.S. House and easily won his primary. The Alaska Democratic party changed its rules to let independents run in its primaries if they want the party’s backing. Galvin, an education advocate who has a reputation for being persistent, planned to greet supporters Tuesday night and get them ready for the challenge ahead. The time between now and the general election “is not that long when you want to make a big change. I do intend to keep people charged. … We are going to be hitting the ground running tomorrow.” Party primaries for governor and lieutenant governor determine who runs as a ticket in November. Candidates who bypass the primaries and instead gather signatures to appear on the general election ballot — as Walker opted to do — have a say in their running mates. The next governor will face big issues, including crime and the economy, and decisions on the annual check that Alaskans receive from the state’s oil-wealth fund, the Alaska Permanent Fund. Dunleavy and Treadwell had positioned themselves as conservatives critical of a 2016 criminal justice overhaul and the state’s approach to budgeting. Both supported the formula in state law for calculating the oil-wealth check, which has been ignored, first by the governor and then by legislators, for the past three years amid a budget deficit. Mary Bolin, an Anchorage Republican, voted for Dunleavy. She said he was “most in line with the values I hold and the way I would like to see things run.” Bolin said she supported Walker in 2014 and could possibly do so again in the general election, saying they share personal values. She said she wanted to hear more from the candidates before deciding who she thinks could best get the state out of its financial difficulties. In east Anchorage, Bill Cody voted for Treadwell, whom he said made the most sense to him. Cody voted for Walker four years ago but didn’t like the governor’s handling of the Permanent Fund dividend. “I don’t think he listened to the people at all,” Cody said, adding he hopes it hurts Walker at the polls. “I didn’t even consider voting for him this time.” Cody’s wife, Holly Cody, also is an undeclared voter, but she voted on the Democratic ballot. In the U.S. House race, she supported Democrat Dimitri Shein. She said she met Shein and he left a good impression. “He’s a family man,” she said. But she’s not holding out hope that anyone will defeat Young. “Don Young’s been around forever. I think he’s got a lot of support in Alaska.” The primaries also include a contested GOP race for lieutenant governor and state legislative races. Of the candidates in the Democratic U.S. House race, Galvin and Shein, a Russian immigrant who became involved in politics after President Donald Trump’s election, most actively campaigned. Young faced a primary challenge from Thomas “John” Nelson and Jed Whittaker, who had limited resources and little name recognition.

Ethics panel upholds decision against Eastman

A legislative ethics panel says it found by "clear and convincing evidence" that an Alaska lawmaker violated ethics law by disclosing the existence of a complaint that was considered confidential. At a public hearing Tuesday, Rep. David Eastman denied that he had done this. The ethics panel says that was the first definitive denial offered by Eastman and was inconsistent with statements he previously made to an investigator. The Alaska Journal of Commerce in January reported that Eastman told one of its reporters in April 2017 that a complaint had been filed against Rep. Gabrielle LeDoux and suggested the reporter check with the ethics office. The House in January removed Eastman from his seat on the ethics committee after he was accused of the breach. No additional sanctions were recommended. Eastman requested the hearing after a subcommittee of the Select Committee on Legislative Ethics in January said it found probable cause that Eastman violated ethics law by disclosing the existence of the complaint. The subcommittee recommended that Eastman lose his seat on the ethics committee and the state House removed him in January, which Eastman has argued was premature. The hearing spanned most of the day. About an hour after deliberations began, a panel member said the group had finished its work in executive session. But no decision was announced before the panel adjourned. Kevin Fitzgerald, an attorney for the ethics committee, said there was overwhelming evidence that Eastman disclosed the existence of the complaint and suggested he had motive to do so. He said Eastman shared with fellow House members in April 2017 a letter in which he indicated that a lawmaker had threatened to withhold donations from a political action committee to another's campaign because of disagreements over an amendment. Eastman said what he wrote was not based on a direct observation but on what one member involved in that discussion told him. He said he didn't consider what occurred to be an ethical violation but instead a form of harassment. The incident was written about on a conservative blog and days later, a complaint was filed. The Alaska Journal of Commerce in January reported that Eastman told one of its reporters during an interview in April 2017 that a complaint had been filed against Rep. Gabrielle LeDoux and suggested the reporter check with the ethics office, which she did. Eastman's attorney, Tim Petumenos, disputed that characterization of events and said the reporter, Naomi Klouda, lacked notes to back that up. He questioned why Eastman, as an ethics committee member, would do that. "Why didn't he just put his head in the noose? Because what's the ethics committee going to say? 'What? Rep. Eastman disclosed an ethics complaint to you and you're sure? Why, that's it for him!' And that's exactly what happened. Who would do that?" he said. Klouda did not attend Tuesday's hearing in Anchorage because of medical issues. An attorney who has represented Klouda attended, and a deposition she gave was read for the panel. Fitzgerald said Klouda has been consistent in her statements about what Eastman told her. LeDoux has said that a complaint against her was dismissed because it was meritless but declined further comment. The man who filed the complaint said he knows Eastman from various gatherings but that prior to filing the complaint, he doesn't think he spoke to him and said the two never spent time together. Eastman, who has taken issue with the coverage of abortion through Medicaid, was previously censured by the House in 2017 over comments he made suggesting there are women in Alaska who try to get pregnant to get a "free trip to the city" for abortions. Eastman apologized for the comments.

Walker asks Corps to suspend Pebble permitting

JUNEAU (AP) — Alaska Gov. Bill Walker has asked the U.S. Army Corps of Engineers to suspend its environmental review of a proposed copper-and-gold mine near a major salmon fishery, saying he questions whether the project is ready to move forward. Walker's letter to the corps, also signed by Lt. Gov. Byron Mallott, said the group seeking to develop the mine, the Pebble Limited Partnership, has yet to show that it has proposed a "feasible and realistic project." Tom Collier, CEO of the Pebble partnership, called the request a stall tactic that he would expect from anti-development groups but not from the governor. Walker fails to make a compelling case for halting the current process, he said. "It is this type of behavior that makes many in the global investment community reluctant to invest in Alaska," Collier said in a statement. The project, located in Alaska's Bristol Bay region, has been the subject of heated debate for years. Bristol Bay produces about half of the world's sockeye salmon. The Pebble partnership in December applied for a permit with the corps. The corps recently concluded a comment period that allowed people to share their views, cite any concerns and offer suggestions on the scope of the review. The Alaska Department of Natural Resources submitted comments Friday, which is also when Walker and Mallott submitted their letter. Critics have complained about the corps' process; Chip Treinen, with Commercial Fishermen for Bristol Bay, said in a recent statement that the corps is fast-tracking Pebble's permit application and worried the process was tilted in Pebble's favor. The corps had not yet responded to Walker's request. Mike Heatwole, a Pebble spokesman, said Pebble believes its project is technically, environmentally and economically feasible. Review processes like the corps' will look at whether Pebble's assumptions, particularly on technical and environmental issues, are correct, he said Monday. Canada-based Northern Dynasty Minerals Ltd., which owns the Pebble partnership, has been looking for a partner since Anglo American PLC announced it was pulling out in 2013. Canada-based First Quantum Minerals Ltd., courted as a potential investor, backed away from the project in May, though offered no public comment at the time as to why. Heatwole said there has been "active interest" as Pebble seeks a new partner. "And when we have something to share I certainly look forward to doing that," he said.  

Begich, Treadwell jump into governor's race

JUNEAU (AP) — Democratic former U.S. Sen. Mark Begich is running for governor of Alaska, complicating Gov. Bill Walker's re-election bid. Begich made his plans official shortly before a Friday filing deadline. Before the announcement, Walker, an independent, said he would skip the Democratic primary and gather signatures to appear on the general election ballot in November. A recent court ruling allowed independents to run in the Democratic primary if they want the party's backing. Walker was elected in 2014 with Democratic support. Begich said in an email to supporters that he waited so long to decide to run because his family was a big consideration. He has a son in high school and recalled losing his father at a young age. But Begich said his family decided "nothing would be as hard as sitting back and watching our state continue to struggle." He cited concerns with high unemployment rates, crime and "years of out of control state spending," but did not delve into any policy proposals. Walker said there's a long road to the November election, "and I have no interest in criticizing anyone for stepping up to serve their state." The election will provide "a historically unique choice," he said. "I appreciate the folks who worked hard to try to find a way to make this a two-way race. I understand that made things simpler from a strategic and technical perspective," Walker said. "But I can tell you that I am as excited as I've ever been. I am an Alaskan before I am anything else." The governor said he likes his chances. On the Republican side, former Lt. Gov. Mead Treadwell shook things up by jumping into the race Friday. He joins a list of candidates seeking the GOP nod, including former state Sen. Mike Dunleavy, who is known for his conservative views, and businessman Scott Hawkins. In an email to supporters, Treadwell said many Alaskans were dissatisfied with their choices leading to the filing deadline. In an interview, the former chairman of the U.S. Arctic Research Commission said his experience sets him apart, citing work with the fishing, Alaska Native and science communities. State Rep. Mike Chenault of Nikiski dropped his bid for the GOP nomination, citing personal reasons and "other reasons I would rather not discuss." One of Walker's goals was to run as a team with Lt. Gov. Byron Mallott, a Democrat. Walker changed his party affiliation from Republican to undeclared in 2014 in joining forces with Mallott as part of a so-called unity ticket to upset then-Gov. Sean Parnell, a Republican. Skipping the primary ensures they can run together. Winners of the party primaries for governor and lieutenant governor get paired up for the general election. The defining issue of the race will be "who's done what," Walker said, citing efforts to shrink the state's budget deficit, bills to address crime and the expansion of Medicaid to cover more lower-income Alaskans as achievements. Begich, a former Anchorage mayor, eked out a win over longtime Republican U.S. Sen. Ted Stevens in 2008. Begich served one term in the Senate, losing a hard-fought, high-profile race to Republican Dan Sullivan in 2014. His father, Nick Begich, was Alaska's lone congressman when the plane carrying him and House Majority Leader Hale Boggs, a Louisiana Democrat, vanished en route to Juneau in 1972. Begich told supporters last summer he was considering a run for governor, after being encouraged to do so. He said he loved the consulting work he took up after his Senate defeat and spending more time with family. He has spoken out on Twitter on policy issues, including support for Medicaid expansion and funding for Planned Parenthood. At times, he also has jabbed at state leaders and Sullivan. But he hadn't said much publicly about his intentions to run for governor. One major issue in the race is likely to be the future of the yearly check that Alaskans receive from the state's oil-wealth fund, the Alaska Permanent Fund. Dunleavy already has sought to distinguish himself from Walker on that issue. Faced with legislative gridlock over how to address the state's budget deficit two years ago, Walker halved the size of the check, prompting an unsuccessful lawsuit from Democratic state Sen. Bill Wielechowski, who eventually lost his challenge at the Supreme Court. Since then, amid ongoing debate over resolving the deficit, the statutory formula for calculating the check hasn't been followed, prompting outrage from more conservative Republicans and from some Democrats. The Legislature set the dividend at $1,100 in 2017, and for $1,600 in 2018.

Legislature passes budgets, ends extended session

JUNEAU (AP) — Alaska lawmakers ended the extended legislative session early Sunday after passing state spending plans and a flurry of other bills in the waning hours. Despite running long, the session lacked the drama of the past several years, which were marked by drawn-out special sessions and bitter fights over the budget and taxes. House Speaker Bryce Edgmon said legislators in both chambers decided they would have to trust one another, work together and compromise "in order for us to get out of here in an orderly manner." The Senate has a Republican-led majority. The House majority coalition is composed largely of Democrats. The end of session merited a "fist pump in the air for everybody," Edgmon said. Saturday started slowly, with lawmakers meeting behind closed doors and trying to reach final agreement on what would be needed to finish up. Floor sessions scheduled for the morning started hours late. Heading into the day, the major unresolved pieces were the operating and capital budgets. A tentative agreement had been reached on the operating budget earlier in the week but needed House and Senate approval. The capital budget was being worked on in the House Finance Committee. When Edgmon announced on the House floor Saturday that it would be last day of work, it drew a smattering of hands pounding on desks — the legislative equivalent of applause. The operating budget that was ultimately approved Saturday would be paid, in part, using Alaska Permanent Fund earnings, an outcome lawmakers were essentially forced into after years of drawing down on savings to fill a budget deficit that has persisted amid slumping oil revenues. The measure calls for a withdrawal of $1.7 billion from Permanent Fund earnings to help pay state government costs and another $1 billion for the yearly dividend checks residents receive from the oil-wealth fund. Lawmakers chose to cap dividend checks at $1,600 for this year, a level Gov. Bill Walker has said he supports. The dividend calculation in state law already had been ignored the past two years amid gridlock over how best to fill the deficit. Legislative leaders have said there was insufficient support this year to pay out a full dividend under that calculation, which would have been about $2,650. The permanent fund is a nest egg, seeded with oil money, which has grown through investments. The fund's principal is protected, but fund earnings can be spent. Use of earnings in the past, however, has been limited to things like paying out dividends. Lawmakers also agreed to use money from the constitutional budget reserve, a state savings account, to help fill the deficit. Senate discussion on the budget included hopefulness about a recent rise in oil prices and the positive impact that could have on the budget. North Slope oil was about $77 a barrel on Thursday. It was around $50 a barrel at this time the past two years. On the House side, Republican critics of the budget said the package was too large and unsustainable. The operating budget included $10 million above what Walker proposed for the University of Alaska. It included funding for additional prosecutors and law enforcement positions and for 20 positions to address a backlog in public assistance applications. The capital budget, which emerged from House Finance late Saturday, isn't solely an infrastructure package. It also includes health and safety projects and school funding — an additional $20 million for public schools for the fiscal year starting July 1, and $6 million over two years for pre-kindergarten programs. The package also includes another $28 million for Medicaid, though Walker's budget director Pat Pitney said that falls short of what is needed and could lead to delays in provider payments. The capital budget also puts money toward two projects Walker had previously halted: a bridge over Knik Arm to provide another way of connecting Anchorage to the state's fastest-growing area and a project to help connect Juneau to the road system. The budget bills now go to Walker for review. Lawmakers also passed a flurry of other bills, including a statewide smoke-free workplace bill that had languished for months in the House despite widespread support. Legislation passed, too, setting up a raffle to benefit schools, which Alaskans could enter using all or a portion of their Permanent Fund dividend checks. Seventy-five percent of entry dollars would go toward public schools and a new education endowment. The remaining 25 percent would go toward a prize fund. On Friday the Legislature passed a measure aimed at paying off the state's oil tax credit obligations through bonding. Legislators also approved a package aimed at addressing crime concerns. The bonding bill passed despite constitutional concerns. Attorney General Jahna Lindemuth has said there isn't a constitutional problem. Walker told reporters he had no plans to call a special session, which he said was a testament to the work lawmakers accomplished. Senate Majority Leader Peter Micciche said lawmakers wanted to complete their work and get back to their districts. He said he wasn't happy with the outcome but said compromise was needed — and demanded by Alaskans tired of gridlock. Lawmakers worked past the 90-day, voter approved-session limit in mid-April. They finished within the constitutional time limit; the constitution permits sessions of up to 121 days, a limit that would have been reached Wednesday.  

House-Senate conference releases operating budget

JUNEAU (AP) — A tentative agreement on the state operating budget was reached Thursday, moving Alaska legislators one step closer toward adjourning the extended session. A conference committee reached agreement on the last budget items in dispute between the state House and Senate. Those included providing an additional $10 million for the University of Alaska system beyond what Gov. Bill Walker had proposed. The university funding was in the middle of what the House and Senate had earlier proposed. The committee also agreed to provide funding for additional prosecutors and law enforcement positions and to fund 20 new positions to address a backlog of public assistance applications. The bill will now go to the House and Senate for final consideration. The operating budget is one of the last major items remaining in the extended legislative session, which lawmakers hope to end soon. Senate President Pete Kelly said lawmakers are aiming to complete their work Saturday. Other remaining issues include the capital budget and a bill to allow for bonding to pay off the state's remaining oil and gas obligations. A version of the capital budget has already passed the Senate and was being worked on in the House. The bonding bill, which previously passed the House, is scheduled for the Senate floor on Friday. The Senate on Thursday passed legislation rolling several crime bills — including several of Walker's priority bills — into one big package. Provisions sought by Walker include allowing the attorney general to schedule new drugs as controlled substance by emergency regulation if the attorney general deems that necessary to protect public safety. The bill also would allow judges to consider out-of-state convictions when making pre-trial release decisions. The additional crime bills were grafted onto a bill that previously passed the House. That means that House will have to decide whether to approve it as is. Legislators worked past the 90-day, voter-approved session deadline in mid-April. The constitution permits regular sessions of 121 days. That limit would be hit Wednesday.  

Bill to draw from Permanent Fund released

JUNEAU (AP) — Alaska House and Senate negotiators on Wednesday unveiled a proposal that would limit draws from Alaska Permanent Fund earnings. But it would leave the fight over the size of future dividends paid to residents from the oil-wealth fund to future legislatures. Lawmakers plan to use fund earnings for the first time to help fill a persistent state budget deficit. The annual dividends paid to residents also come from fund earnings, making the issue politically tricky to navigate — particularly in an election year. The conference committee draft would limit what can be drawn annually from fund earnings to pay for government and dividends, based on a percentage of the fund's average market value over five years. But it does not get into how the draw should be divvied among government and dividends. Lawmakers plan to discuss the proposal among their respective caucuses. Pat Pitney, Gov. Bill Walker's budget director, said by email that the proposal is a responsible approach, writing that it addresses "the most important item, protecting the fund's real value for the long-term." But Sen. Bill Wielechowski, an Anchorage Democrat, opposes the proposal, saying it leaves the dividend more vulnerable. The size of this year's dividend is generally considered settled at $1,600, the amount the House and Senate each included in their version of the state operating budget. Walker also has said he supports that amount. That's about $1,000 less than Alaskans would have gotten if the statutory calculation was followed. Critics of a full dividend this year said it would have been fiscally reckless. The statutory dividend formula also was ignored the past two years amid gridlock over how to resolve the deficit, first by Walker, then by lawmakers. Wielechowski said the law should be followed. "If the Legislature wants to fool around and think they can be cute and fundamentally change a program, probably the most popular program in the United States, without significant repercussions from the electorate, I think they're wrong," he said. Alaska voters will have the final say on the dividend, said Wielechowski, who believes it will wind up in the constitution eventually. The tone of this session has been less antagonistic than last year, which was marked by fights over taxes. Still, lawmakers worked past the 90-day, voter-approved session limit, which was reached in mid-April. The constitutional permits sessions of up to 121 days, a limit two weeks away. House Speaker Bryce Edgmon said there's been good cooperation among lawmakers as they try to close the extended session. The Dillingham Democrat said lawmakers have been trying to resolve technical challenges with the Permanent Fund bill and another measure that would allow for issuance of bonds to pay Alaska's oil and gas tax credit obligations. The state operating and capital budgets also remain unresolved. The House Finance Committee advanced the bonding bill, proposed by Walker, on Wednesday, with Attorney General Jahna Lindemuth seeking to allay constitutional concerns that have been raised with the proposal. If the bonding bill passes the House, it would still have to go to the Senate. Senate President Pete Kelly, a Fairbanks Republican, said the Permanent Fund bill is the Republican-led Senate's major focus.  

Walker's pick for Senate seat withdraws

A man nominated by Gov. Bill Walker to fill an open Alaska Senate seat withdrew from consideration Thursday, less than a day after his appointment, after his fitness for office was questioned and past statements on abortion drew condemnation. In an email to Walker, Thomas Braund cited personal reasons for his decision. He said he has a friend with needs and he is her provider. Braund apologized to Walker "for any disappointment I may have caused." Walker will now get a third opportunity to try to replace Wasilla Republican Mike Dunleavy, who resigned last month to run for governor. The process so far has been politically fraught. Under state law, those appointed for legislative vacancies must be from the party of their predecessor. When a vacancy occurs, parties traditionally send a list of names to the governor for consideration. A governor isn't bound to the list, though the appointment is subject to confirmation, in this case, by Senate Republicans. Walker insisted his initial pick, Matanuska-Susitna Borough Assembly member Randall Kowalke, was the best candidate. But Kowalke wasn't on the GOP list of finalists and Republicans saw the pick as an affront to their process, rejecting his nomination. Walker responded late Wednesday by selecting Braund, one of three finalists advanced by Republicans in Senate District E. The other finalists were Rep. George Rauscher and Todd Smoldon. Walker, a one-time Republican no longer affiliated with a political party, offered no endorsement of Braund, but said he believed Senate Republicans "will continue to reject anyone I appoint, no matter how qualified, unless that person's name is on the list provided to me by the Republican Party." The appointment was condemned by Senate Minority Leader Berta Gardner over a reference to violence toward abortion providers that Braund apparently made on social media. A screenshot of a post under Braund's name, captured by KTOO Public Media, says that if he "had the reins ... abortionists and all their accessories would be hunted and executed with scissors cutting their hearts out. Oh, I forgot, they don't have hearts." The post was no longer visible. "I always reach out and warmly greet every new legislator when they come to the Capitol, no matter the political differences, but I cannot even imagine the desire to shake this man's hand," Gardner, an Anchorage Democrat, said in a statement, adding that Braund "has clearly demonstrated he is not suitable to be part of this institution." Braund did not immediately respond to a message sent by The Associated Press seeking comment via Facebook. Walker's chief of staff, Scott Kendall, said questions about Braund's fitness and qualifications should be directed to the Republican party, "who did vet Mr. Braund and, by vote, endorsed his beliefs as acceptable to them," and to Senate Republicans, whom he said "specifically requested such a Party-approved nominee." Republicans "now have the nominee they demanded," he said. Senate Republicans urged Walker to go back to the district for more names if the initial list was unacceptable to him. State GOP Chairman Tuckerman Babcock said he was "shocked" that of the three nominations, Walker felt Braund was the best choice, citing the qualifications and activities of the other two. He said Braund is known for "hard-right posts on Facebook." Kendall said Walker "absolutely does not endorse any of the three nominees" sent to him by the party, including Braund. Walker spokesman Austin Baird said Rauscher "made light of a violent attack against a woman," which he said was disqualifying. A political blog last month posted a picture of a sign on Rauscher's Capitol office door that said "BDSM Free Zone." That followed a report in the Juneau Empire, in which a woman accused former Democratic state Rep. Zach Fansler of hitting her so hard it ruptured an eardrum. The paper cited a text from Fansler to the woman that referenced "BDSM," or sexual fetishes. Fansler has not been charged. Rauscher on Thursday said that after reading the story, "I made a statement that hiding behind BDSM as a reason for hitting a woman is wrong." He said later that Walker never asked him about it. Babcock on Thursday forwarded Walker the name of a third candidate for the seat, Vicki Chaffin Wallner. In his letter to Walker, Babcock said she finished fourth in the original balloting of candidates.

Walker makes new Senate pick while defending initial choice

Gov. Bill Walker named Thomas Braund to fill a vacant Alaska Senate seat after Senate Republicans rejected his first choice. Walker did not offer an endorsement of Braund, and in a letter Wednesday to Senate President Pete Kelly said he believes his initial pick, Randall Kowalke, was the best candidate to replace Wasilla Republican Mike Dunleavy, who left the Senate to run for governor just before the start of the session. Kowalke applied for the seat but was not one of the three names sent to Walker by Republicans in the district. Braund was on the initial list, along with first-term Rep. George Rauscher and Todd Smoldon. State GOP Chairman Tuckerman Babcock has said that Braund is a retired policeman. Appointees must be from the party of their predecessor. When a vacancy occurs, parties traditionally send a list of names to the governor for consideration though he is not bound to them. The appointment, however, is subject to confirmation, in this case, by Senate Republicans. Walker's decision to stray from the list irritated Republicans, who saw it as an affront to their process. Senate Republicans on Tuesday urged Walker to go back to the district for a new list if he could not support a candidate from the initial slate of finalists. But Walker stood behind Kowalke setting the stage for the failed confirmation. In a statement released Wednesday by Senate Republicans explaining their rejection of Kowalke, Senate Majority Leader Peter Micciche said the people of Senate District E "should be given an opportunity to fill the seat with a candidate they support through the traditional process, which is designed to respect the will of the voters." In a statement, Walker, a one-time Republican no longer affiliated with a political party, said he believes Senate Republicans "will continue to reject anyone I appoint, no matter how qualified, unless that person's name is on the list provided to me by the Republican party." According to Walker, he received more support for Kowalke from Mat-Su residents and elected officials than for all the other applicants combined. Recommendations for Kowalke came from Senate Majority members as well, which Walker said he took “very seriously.” However, in the interest of ensuring the district has representation in the Senate, he said he is appointing Braund, who is from Sutton. Wednesday marked Day 30 of the scheduled 90-day session. Walker did not choose from the list individuals recommended by Democrats in House District 40 to replace Dean Westlake who resigned before the session because of multiple sexual harassment allegations. He instead chose NANA Regional Corp. executive John Lincoln to replace Westlake, who was confirmed by House Democrats. Journal reporter Elwood Brehmer contributed to this report.

Tax hike for cruise industry dropped amid Alaska concerns

The cruise industry has dodged a tax increase after Alaska's U.S. senators helped strike the provision from the tax bill that passed the Senate. The bill approved early Saturday includes other provisions that Alaska Republican Sens. Lisa Murkowski and Dan Sullivan hailed as significant for Alaskans, including allowing oil and gas drilling on the coastal plain of the Arctic National Wildlife Refuge. Murkowski called the package "a critical milestone in our efforts to secure Alaska's future." The measure also would provide tax benefits for Alaska Native corporations to encourage contributions to trusts that promote the health, education and welfare of beneficiaries and to help the funds grow. The cruise ship tax provision could have impacted tourism, a major driver of an Alaska economy that has otherwise slowed in a recession because of persistently low oil prices. This summer, more than 1 million tourists came to the state on cruise ships, and the industry anticipates breaking that record during the 2018 summer cruise season, said John Binkley, president of Cruise Lines International Association Alaska, a trade group. "It's really one of the bright spots in the economy for Alaska, and I think Sen. Sullivan and Sen. Murkowski felt this would be another blow to Alaska's economy if we tried to then restrict that growth or to slow down that growth in that sector," he said. The provision would have applied to foreign ships, assessing a corporate tax based on their time in U.S. waters, Binkley said. By one estimate, it would have raised $700 million over 10 years, though Binkley said there were no hearings to vet that estimate. The tax increase would have applied to other U.S. ports as well. But ships operating in Alaska are in U.S. waters far longer than vessels leaving Miami for places such as the Caribbean or departing Los Angeles for Mexico, he said. Critics feared the tax could have discouraged ships from routes where they would face higher taxes. Sullivan and Murkowski said the tax would have disproportionately affected Alaska, particularly impacting communities that rely on cruise ship tourism. Sullivan lobbied Senate leadership and other lawmakers in getting the tax increase stripped from the bill, said Matt Shuckerow, a Sullivan spokesman. The bill isn't a done deal; the House and Senate passed their own tax bills and differences between the two need to be hashed out. The cruise ship tax, however, was not in the House bill, Shuckerow said.

House keeps special session alive after Senate calls it quits

The Alaska House isn't giving up on the special legislative session, even though the Senate has called it quits. The House majority coalition on Monday announced plans to hold technical sessions until the special session ends Nov. 21. The House plans for the two Juneau members to preside over the technical sessions, for which attendance isn't mandatory, to keep the special session alive. That will force the Senate to hold similar sessions since one body can't adjourn without the other. Special sessions can last up to 30 days, and Nov. 21 would be the 30th day. The Senate adjourned Friday after adopting a crime bill passed days earlier by the House, despite constitutional concerns. House Speaker Bryce Edgmon hopes by keeping the session alive, the Senate will address issues with the crime bill and address the session's other item, a wage tax. But the Republican-led Senate has shown little interest in taxes, having rejected an income tax proposal earlier this year as unnecessary and ill-advised for a sluggish economy. And Gov. Bill Walker said he will sign the crime bill, SB54, which was prompted by a public outcry over crime following passage of a criminal justice overhaul last year. The bill "returns meaningful tools to judges and law enforcement to keep Alaskans safe, although it contains some issues the Legislature will need to address quickly in the near future," Walker said in his weekly office newsletter. The American Civil Liberties Union of Alaska warned legislators that a provision added in the House would make presumptive sentence ranges for first-time Class C and Class B felonies the same. This would violate due process requirements, the group said. The state's Department of Law also flagged the provision as problematic. The ACLU of Alaska said the concept of graduated offenses is to ensure more serious crimes are sentenced more harshly. Class C felonies are a lesser class of felony. Edgmon, a Dillingham Democrat, said the potential legal issues came to light following House passage. The Senate, which passed its own version of the bill earlier this year, voted narrowly Friday to adopt the House version, which members saw as getting tougher on crime. Senate President Pete Kelly on Monday said any problems with the bill can be fixed when the Legislature convenes its next regular session in January. But Rep. Paul Seaton, co-chair of the House Finance Committee, said it would have been easier to handle in a conference committee during the current special session. Kelly, a Fairbanks Republican, said it's disingenuous to blame the Senate for problems with the bill. The measure, in general, is pretty good, "and we should declare victory." It's also a win for the Senate because "we didn't allow ourselves to get pulled into a leverage game where we had to choose between imposing a tax on Alaskans versus passing a crime bill that is very much needed," he said. The House has previously leveraged the Senate for "everything. So it would not be unreasonable to assume they would do it again," Kelly said. Seaton, a Homer Republican, said the crime bill and wage tax were unrelated. "There was never, by anyone, any indication that the two things...were being tied together," he said.

Alaska Senate adjourns session after passing crime bill

The Alaska Senate brushed off constitutional concerns and approved a crime bill Friday, but sidestepped taxes when ending the special legislative session. The American Civil Liberties Union of Alaska warned lawmakers that a provision of the crime bill, passed by the House this week, would make presumptive sentence ranges for first-time Class C and Class B felonies the same. The group says this would violate due process requirements. The ACLU of Alaska says the concept of graduated offenses is to ensure more serious crimes are sentenced more harshly. Class C felonies are a lesser class of felony. The organization warned of legal action if the provision is adopted. The sentencing change was added to the bill as an amendment during floor debate prior the House voting on the bill in the wee hours of the morning Nov. 7. It wasn't known to be a problem until after the House passed it. House Speaker Bryce Edgmon, D-Dillingham, called the Senate's actions "an abdication of their responsibilities." "They allowed a constitutionally flawed bill to be sent to the governor and they worsened the ongoing recession and fiscal crisis by refusing to even consider a new revenue proposal," he said in a statement. "We can force the Senate back to Juneau but apparently we, and the governor, can't actually make them work." The Senate showed little interest in and did not vote on the other issue on the agenda — a wage tax. Gov. Bill Walker proposed the tax to help address a multibillion-dollar state budget deficit that has persisted amid low oil prices. It was not immediately clear whether Walker would support the crime bill passed by the Legislature. Concerns with the bill were discussed during a Senate hearing hours before Friday's vote on the legislation. Journal reporter Elwood Brehmer contributed to this story.

Walker headed to Hawaii, China with Trump

President Donald Trump plans to meet with the governors of Alaska and Hawaii and Pacific U.S. territories amid ongoing tensions with North Korea. Alaska Gov. Bill Walker told reporters that the meeting, scheduled for Friday in Hawaii, is expected to focus on Trump's upcoming trip to Asia and "Pacific theater issues" affecting the governors. Walker, who is politically unaffiliated, has raised concerns with North Korea weapon's tests and suggested the strategic importance of having a naval base in Alaska. The governors of the U.S. territories of Guam, American Samoa and the Commonwealth of the Northern Mariana Islands were invited to the meeting, Walker said. Walker plans to travel to Hawaii with Trump's team from Washington, D.C., where Walker testified before a U.S. Senate committee Thursday in support of opening a portion of the Arctic National Wildlife Refuge to oil and gas exploration. Walker said he then plans to travel separately from Trump to China. There, Walker and Keith Meyer, the head of the Alaska Gasline Development Corp., which has been courting Asian investors and gas buyers for the proposed $40 billion Alaska LNG Project, will be part of a delegation expected to participate in events with Trump. Walker said he sees it as major opportunity to draw attention to the long hoped-for liquefied natural gas project, which has been marked by changes in direction and has seen interest by Alaska state legislators wax and wane.

Alaskan picked to lead regional EPA office

Alaska state Commerce Commissioner Chris Hladick has been chosen to lead the U.S. Environmental Protection Agency's regional office based in Seattle. Hladick will join the agency in December, the EPA said Tuesday. Hladick will leave his state role Nov. 1, Alaska Gov. Bill Walker said. Mike Navarre, the outgoing mayor of the Kenai Peninsula Borough, will succeed Hladick at the state Commerce Department. Hladick previously held city manager roles in several Alaska communities, including Unalaska and Dillingham. In joining the EPA, Hladick will oversee a region that includes Alaska, Idaho, Oregon and Washington and about 270 tribes. EPA Administrator Scott Pruitt in a release said Hladick's passion for helping others, experience in managing government departments and familiarity with regional issues make him a "perfect fit" for the new job. His pick won praise from Alaska's Republican congressional delegation. U.S. Sen. Lisa Murkowski said Hladick knows the issues communities face when dealing with the EPA. Rep. Don Young said Hladick can begin rebuilding a level of trust and confidence in the EPA that Young says eroded under the Obama administration. U.S. Sen. Dan Sullivan said Alaska's delegation had been "relentlessly pushing" to have an Alaskan serve as the regional administrator. He said Pruitt worked with the delegation to find a well-qualified candidate.

State of Alaska weighing options for conducting elections

JUNEAU — The state of Alaska is exploring options for conducting elections after 2018, as it is faced with an aging voting system and financial pressures amid an ongoing state budget deficit. A bipartisan working group established by Lt. Gov. Byron Mallott is examining the issue. Josie Bahnke, director of the state Division of Elections, said one option that has gotten attention is a hybrid system that would include allowing for early, in-person voting and voting by mail. But she said discussions are preliminary and more research must be done to see if this approach would work in Alaska, a vast state with far-flung communities. In certain parts of Alaska, the state must provide language assistance, including for a number of Alaska Native languages and dialects. The discussion over the future of how the state conducts its elections comes amid what the division sees as a move toward more early and absentee voting. It also comes as Alaska’s largest city, Anchorage, prepares to begin holding municipal elections by mail. One reason the city has cited for this approach is a desire to boost voter turnout. Bahnke said the hope is to have draft recommendations completed by early next year. Any changes to how state elections are conducted would have to be approved by the Legislature, she said. The Division of Elections, in a report earlier this year, said its current ballot tabulation system, purchased in 1998, still works and accurately counts ballots but has had problems. Some equipment failed and had to be replaced during last year’s elections. Ballots were put into emergency bins and voting was uninterrupted but such issues can affect voter confidence, the report states. The system was bought with a 20-year life expectancy, and it’s becoming more difficult to find parts, Bahnke said, noting that it could cost $6.7 million for a replacement. She said it will still be used for next year’s elections. The working group is also looking at ways to save money. The division, in its report, said it expects that conducting elections by mail would save money but acknowledged it had not done a full cost analysis. Leaders of the state’s Republican and Democratic parties have been monitoring the working group’s activities and are waiting to see what recommendations might be made. Work group members plan to visit Colorado to see how that state’s system works, Bahnke said. Colorado is one of three states that holds elections entirely by mail, according to the National Conference of State Legislatures.

Revenue commissioner resigns to focus on ministry

(AP) — The commissioner of Alaska's Department of Revenue is resigning to focus on ministry work. Randall Hoffbeck's last day will be Aug. 17. Hoffbeck was one of the first appointments Gov. Bill Walker made after winning office in 2014. Hoffbeck was serving in Kenya with his wife on a short-term medical mission at the time. In his resignation letter, Hoffbeck says it is time for him to "complete the call to ministry God has placed on my heart." Hoffbeck says he had a sense of being done after the recent special session on oil and gas tax credits. He tells The Associated Press he didn't have the energy to gear up for the next fight. He says he regrets not being able to deliver a complete fiscal plan for Alaska. Deputy Revenue Commissioner Jerry Burnett will lead the department on an interim basis until Walker selects Hoffbeck's permanent replacement, according to a release from the governor's office.

Walker working on new tax proposal

(AP) — Gov. Bill Walker said Friday that he will probably run for re-election. But he currently has more pressing issues on his mind — including crafting a tax bill that he hopes will garner support from lawmakers. In a wide-ranging interview with The Associated Press, Walker said it's imperative that revenue issues be addressed this year. He expects to unveil a tax proposal for consideration sometime this year, but he could not provide a timeline for doing so or details on what the bill might include. He did say it would not be an oil tax bill. "Now that the session is out, we will look at all that has been discussed, what's been passed, what wasn't passed, input from the public — there's been lots of input — and come up with a revenue concept that we think is going to garner support from both the House and the Senate," he said. The Republican-led Senate earlier this year rejected a House-passed income tax. Asked whether he thought the Senate is interested in taxes, Walker said he heard occasional references from senators about the need for revenues. "I guess I'll find that out," he said. The state is grappling with a multibillion-dollar deficit amid continued low oil prices. Lawmakers funded this year's budget out of savings — something Walker had hoped to avoid — after they failed to come to terms on a long-term fiscal plan. Since then, two bond rating agencies have downgraded the state's credit rating. Walker, a Republican-turned-independent, said he's not sure how many letters the state needs to get from rating agencies to spur action. He gave lawmakers credit for their work in addressing an oil tax credit system that he said had become unsustainable and for coming together on their own to reach agreement on a state capital budget. Lawmakers passed the capital budget during a one-day special session on Thursday. "I applaud what they have done. But I'm also saying that we're not finished until we have addressed the additional revenue side," he said. Lawmakers can sort out at a later date a bill that would allow for structured draws from the earnings of the state's oil-wealth fund, the Alaska Permanent Fund, to help pay for government, he said. The House and Senate each passed versions of a permanent-fund bill, but they never reached final agreement. On the issue of health care, Walker said he hopes there will be an opportunity now for governors to work with the Trump administration and Congress to improve the existing law. High health care costs are a major concern for this remote state. Republicans in the U.S. Senate failed in their effort to repeal much of the law, with Alaska Sen. Lisa Murkowski one of three Republicans who helped sink the effort. Murkowski, like Walker, had been critical of the process by which the overhaul was pushed. That vote opened the door for more collaborative input, Walker said. Walker faces re-election next year. "I'm sure I'll run again," he said. Republican Sen. Mike Dunleavy of Wasilla is the highest-profile candidate so far to file a letter of intent to run for the office.

Capital budget finally passed

The Alaska Legislature has passed a state capital budget during a one-day special session. Lawmakers announced a compromise had been reached before convening Thursday in Juneau. Some minority House Republicans criticized the process as rushed and lacking in openness. The measure includes $20 million for oil and gas tax credits, which would bring the total for credit payouts to $77 million this year, the statutory minimum. It has another $7 million for a replacement school for rural Kivalina. It also includes $8 million for community assistance, which would bring that program's funding to $38 million. About $1.2 billion in federal money will pay for most of the budget package. Passage comes three months behind schedule. The capital budget had been a casualty of legislative bickering over the best way to address the state's multibillion-dollar deficit.

House majority files bill for income tax, use of Fund earnings

JUNEAU (AP) — A fiscal plan proposed by Alaska House leaders Friday would reinstitute a personal state income tax for the first time in decades and use earnings from Alaska’s oil-wealth fund to help pay for government. It’s not the first bill this session that would tap Alaska Permanent Fund earnings and change how the annual dividend that Alaskans receive from the wealth fund is calculated. But it’s the only one that has income tax provisions tacked on. While many legislators see some use of permanent fund earnings as inevitable as Alaska grapples with a multibillion-dollar deficit, an income tax could be a tough sell, particularly with the Senate’s Republican-led majority, which has said it would see securing additional budget cuts and the use of fund earnings as big wins this session. The bill, introduced by House Finance Committee, calls for annual draws from permanent fund earnings of 4.75 percent of an average of the fund’s market value. One third of the draw would pay for dividends. The rest would go to the state treasury. While the fund’s principal is constitutionally protected, its earnings, from which dividends are derived, can be spent, if lawmakers choose. Under the new House bill, committee co-chairman Rep. Paul Seaton, a Homer Republican, said dividends are expected to start out at about $1,100. Dividends hit an all-time high of $2,072 in 2015, but they were slashed to $1,022 — about half of what they otherwise would have been — by Gov. Bill Walker last year after lawmakers failed to pass a deficit-reduction plan. Seaton sees the approach in House Bill 115 as simpler than one proposed by Walker, which calls for a higher draw from the oil-wealth fund and would base a portion of the dividend on a share of state mineral royalties. The bill also establishes an income tax under which people would be taxed at 15 percent of the amount they pay in taxes to the federal government, or $25, whichever is greater. That means if you owe the federal government $5,000, you would pay $750 in state taxes. The tax rate is more than double what Walker proposed last year. The previous income tax was repealed more than 35 years ago. Alaska is one of seven states with no income tax. The proposal also includes a capital gains tax and an option for residents to apply all or part of their dividends to their tax bill. The other committee co-chairman, Rep. Neal Foster, a Nome Democrat, said the aim is for fair fiscal plan that spreads the impacts. Both residents and non-residents, for example, would be subject to the income tax. The House also is looking at oil tax and credit changes. Speaker Bryce Edgmon, a Dillingham Democrat, said other ideas for addressing the deficit might still come forward. Several minority House Republicans voiced their opposition to the income tax provision Friday. Rep. Dan Saddler, an Eagle River Republican, said his caucus would give the bill fair consideration. But he said he worried that linking two contentious issues was setting the stage for the kind of gridlock experienced last year.


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