Thank you for reading my latest e-News! We're two months into the session and I'm writing with an update on the issues we've been working on in the Capitol.
Thank you to everyone who filled out my annual survey. We received hundreds of responses in the mail already. I enjoy hearing your feedback about important issues and ideas about how I can represent you better.
Last week, I sent a memo to Governor Dunleavy identifying specific Alaska Permanent Fund Corporation investments in the Russian military industrial complex. This memo was compiled by my staff member, Keegan Farone, who has a background in military operations intelligence.
Because Russia has demonstrated aggression, threatened peace and stability in the region, and undermined Ukrainian democracy for years, several Presidential executive orders have been issued by the current U.S. president and two past presidents that have imposed economic sanctions on the Russian government, Russian oligarchs, and businesses connected to the Russian government and oligarchs. President Biden’s EO 14065 dated February 21, 2022, President Trump’s EO 13883 dated September 20, 2018, and President Obama’s EO 13660 dated March 6, 2014 explain the United States’ position with respect to prohibitions and sanctions.
Our research shows the Permanent Fund has Russian investments totaling $168 million and that involve 17 different oligarchs and Senior Russian Political Leaders directly tied to the U.S. Department of the Treasury sanction list. We have since learned the Alaska Department of Revenue also invests another $110 million in Russian corporations.
A few examples of investments the Permanent Fund Corporation currently has in Russia who are on the US Department of Treasury sanction list include:
- $46,991,502.74 in Gazprom PJSC – the largest oil producing company in Russia. CEO Aleksey Miller is on the short list of Russia senior political leaders.
- $41,684,862.73 in Lukoil PJSC – the second largest Russian oil company – is run by Vagit Alekperov, a known Russian oligarch.
- $116,275.75 in Alrosa PJSC, a diamond company run by CEO Sergey Ivanov – a member of Vladimir Putin’s inner circle and Advisory Board Member of Rostec.
- $159,006.34 in Rostelecom PJSC. Its parent company, Rostec, is run by CEO Sergey Chemezov and is directly linked to a weapons trading company with ties to the government of Syria and the production of chemical weapons.
- $3,564,609.01 in Novolipetsk Steel PJSC, the largest steel company in Russia linked to supplying the steel likely used for the Russian military. The CEO is Vladimir Lisin, a known Russian oligarch.
The data collected in our memo comes directly from the Permanent Fund Public Holding by Country FY21 document and from the U.S. Treasury List of Russian Leaders and Oligarchs.
After we sent him two letters with this information, the Governor requested state agencies to review state Russian investments and determine “if” it is appropriate to divest. I believe it absolutely is appropriate to divest. Ukrainian President Volodymyr Zelenskyy has demonstrated incredible leadership during this war not just for the Ukrainian people but for the entire world. It is not the time to sit idle. The time is now to show leadership and resolute support at all levels around the world to stand with Ukraine.
The Permanent Fund has a fiduciary duty to maximize the earnings of the fund. Many investment funds read the writing on the wall and sold off large stakes of Russian companies months ago while the war drums were beating, and Russian troops were being amassed at the Ukrainian border. According to the Permanent Fund’s own data, they have already lost millions of dollars on some of these individual Russian investments.
I urge the Governor and the Permanent Fund to form a plan to divest investments from Russia.
Congratulations to Anchorage's Emma Boyles for being the first Alaskan in history to win the Miss America title.
Senate Joint Resolution 12 urges Congress to repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) of the Social Security Act. The WEP cuts the Social Security benefits of public employees in Alaska if they switch between work in the public sector and private sector or the military. In 2021, this loss could be as much as $498 per month, or about $6,000 a year. The GPO cuts spousal or widows’ benefits for public employees for no reason other than their work time in the public sector. This cut could amount to as much as 2/3rds the value of the individual’s government pension.
Because Alaska is one of few states that no longer provides a defined benefit plan and does not offset coverage by Social Security, the WEP and GPO affect more Alaskans per capita than in any other state. Public employees in Alaska are essentially punished for choosing to work in public service. The WEP and GPO negatively impact the recruitment and retention of Alaska public employees like firefighters, police officers, and teachers. Those who do not want to be subject to these provisions will simply look elsewhere for employment. Punishing individuals for choosing public service runs counter to retaining dedicated Alaskan workers and recruiting the best of the best to and within Alaska. Passage of SJR 12 will demonstrate that the Alaska Legislature opposes arbitrary and unfair cuts to the rightfully earned Social Security benefits of Alaskans.
SJR 12 unanimously passed the Senate today and will now go to the House for consideration.
Last year I filed Senate Bill 25, the Alaska Online Checkbook Act. The intent of the Online Checkbook Act is to create a free, searchable database that provides Alaskans with easy web access to comprehensive and detailed information on state spending, in the interest of transparency and accountability. This will encourage a better understanding of the state budget and ultimately help ensure that funding is directed to the state's most important needs.
SB 25 passed the Senate with unanimous support and look forward to similar support and passage in the House.
Another bill I’m sponsoring is SB 172, an act increasing residential property tax exemptions. If enacted, this bill would allow local governments and municipalities to increase the residential property tax exemption from $50,000 to $75,000. This would mean $400 or more savings for the average homeowner in East Anchorage.
I have heard from many constituents who were shocked by the dramatic increases in their Municipal property appraisals. SB 172 is one solution on the state level that could mean lower property taxes in the future.
SB 172 has had hearings in the Senate Community and Regional Affairs Committee.
With constituent Rachael Miller, Chair of the Food Policy Council and Professor at APU.
Rest in Peace Senator Johnny Ellis
I am deeply saddened by the passing of Johnny Ellis. Johnny was a friend, a mentor, and cared deeply about others, especially those who lacked a voice in politics. He was a strong fighter for all Alaskans, and his contributions to our state will always be cherished. He made Alaska a better place for all, and his legacy will continue throughout this state. Johnny will be deeply missed.
Speaking about my legislative priorities for the session at the annual AFL-CIO Luncheon in Juneau.
Last year I once again filed a resolution to constitutionalize the Permanent Fund Dividend. Senate Joint Resolution 1 would place the question of constitutionalizing the PFD—based on the historic funding formula—to a vote of Alaskans. I was pleased that it gained traction and passed through the Senate State Affairs and the Senate Judiciary Committees. SJR 1 now sits in the Finance Committee.
I hope this is finally the year that Alaskans are given the opportunity to decide whether to enshrine the PFD in the Alaska Constitution.
Last year I also introduced two bills, one addressing a defect recently discovered with our corporate income tax laws and the other offering a comprehensive fix to our failed oil tax regime. I filed SB 106 to address a latent flaw in Alaska’s corporate income tax structure that allows highly profitable oil and gas entities that are not publicly traded corporations to avoid paying corporate income tax to the state. The problem was discovered with Hilcorp’s purchase of BP Alaska in 2020. Hilcorp is a “closely held corporation” said to be owned by one individual, a Texas billionaire. Under Alaska law, the income of publicly owned “C-corps” is taxed, but as a privately held company, Hilcorp Alaska is not legally subject to Alaska’s corporate income tax. During its time here, BP made significant profits from the extraction of Alaska’s oil resources. It has been estimated that this loophole is costing Alaska $80-100 million per year, and possibly much more with rising oil prices.
SB 106 would eliminate this loophole by amending the state tax code to require non-C-corp entities making significant profits from Alaska’s oil and gas resources to pay the same tax rate as public C-corps do under the law.
SB 107 would, among other things, increase revenue to the state from the oil companies by eliminating the state’s “per-barrel credit.” Since their creation in 2014 through this fiscal year, the per-barrel credit will have cost Alaska $5.8 billion in revenue. This year alone, Alaska will lose $1.3 billion to these credits, and over the next nine years—without a change to the law—we will lose $9.95 billion due to these unnecessary credits.
SB 106 and SB 107 were each assigned two committees of referral by the Senate President, to the Senate Resources Committee and the Senate Finance Committee. I submitted bill hearing requests for these bills last year, but unfortunately, I haven’t been granted hearings for either one. I am hopeful we can have a thoughtful debate on these issues that are costing the state billions in lost revenue.
As always please give me a call or send me an email with any questions or concerns.
Alaska Senate Democrats | Capitol Building, 4th Avenue & Main Street, Juneau, AK 99801