Economy

The Trump administration is reviving the hopes of the company behind the proposed Pebble Mine in southwest Alaska.

Vancouver, B.C.-based Northern Dynasty, the parent company of the Pebble Limited Partnership, says it’s in talks with the Environmental Protection Agency and hoping the agency will swiftly withdraw its veto of the project.

The proposed open-pit copper and gold mine would be upstream from Bristol Bay and is widely opposed in Dillingham and the region, where it is seen as a threat to the bay’s prolific salmon runs.

Environmental studies found it would damage or destroy miles of salmon streams and more than 2,000 acres of wetlands.

National sportfishing groups have also campaigned against the mine.

Northern Dynasty has a pending lawsuit in U.S. District Court in Anchorage to get a prior EPA veto of the project thrown out. A document filed in that case says the company and the agency are discussing a possible settlement and expect to reach an agreement by July 17.

In his first term, President Trump seemed to run hot and cold on Pebble. His first EPA administrator in 2017 let the project move forward, then reversed course a few months later. The mine proposal seemed to get back on track, but then the U.S. Army Corps of Engineers denied Pebble’s permit application in 2020.

That came after Donald Trump Jr., a sportfisherman who visited the region, publicly announced his opposition.

Alaskans who rent out their cars on platforms like Turo and Getaround are no longer required to collect and submit state rental car taxes themselves.

Earlier this year, the state Legislature passed a bill mandating that the car-rental platforms collect the tax on the vehicle owners’ behalf. On Thursday, the bill became law without Gov. Mike Dunleavy’s signature. Bills that the governor fails to sign or veto within a set period of time automatically pass into law.

Last year, Dunleavy vetoed a very similar bill, calling it “unnecessary taxation.” His press office declined to explain why he allowed the new bill to become law.

Sen. Matt Claman, an Anchorage Democrat who sponsored last year’s vetoed bill, said the bill does not impose new taxes, it just changes who’s required to collect them.

“They own no cars, so Turo has taken the position that historically, that they don’t have a duty to collect the tax,” Claman said. “The interest was to make adjustments to the existing laws to make it so that Turo does collect the tax.”

Alaska has charged an excise tax on rental cars since 2004, but platforms like Turo were not collecting the tax. Few car owners were following the law and collecting the taxes themselves, the Department of Revenue told lawmakers.

As of mid-2023, Revenue officials said approximately two dozen car owners were delinquent on roughly $470,000 in back taxes.

House Bill 123 wipes the slate clean, preventing the Department of Revenue from going after Turo hosts for back taxes. That’s in the interest of fairness, said Big Lake Republican Rep. Kevin McCabe, who sponsored the bill.

“You sign up as a Turo host, and there’s nothing on there that says you’re supposed to collect taxes … outside the platform and send it to the state of Alaska,” he said. “You don’t even know how to do it. You’re just a guy that wants to rent out his car for the two weeks when you’re on the (North) Slope.”

The bill also cuts rental car taxes. Traditional rental agencies like Hertz, Avis and Enterprise will see their tax rate cut from 10% to 9%. Turo rentals get an additional 2% tax break on top of that, making it a 7% rate, through mid-2028.

Turo and Enterprise both submitted letters supporting the bill. Lawmakers said during committee hearings that they hoped the tax cut would prevent Dunleavy from vetoing it.

The Department of Revenue estimated the brick-and-mortar rental tax cut will reduce tax revenue to the state by at least $1.5 million per year. It’s unclear how much of the market Turo accounts for, but Revenue officials said that if it amounts to more than one-eighth of the total rental car market, the change will bring in more money overall. Claman said a similar ordinance in Anchorage was a boon for local rental car tax revenue.

Simmering frustration with Juneau’s increasingly high cost of living has come to a boil in the form of grassroots initiatives to lower it. This spring and summer, advocates collected enough signatures to include two ballot measures aimed at lowering household costs for residents in this fall’s local election. 

Now, a recently released report from the state confirms some of the financial hurdles Juneau residents are facing. 

“I can’t say we’re surprised with this report,” said Brian Holst, executive director of the Juneau Economic Development Council. 

The state’s Department of Labor and Workforce Development released a report in early July that focuses on the cost of living in Juneau, Anchorage and Fairbanks, compared to hundreds of U.S. cities.

Juneau is the most expensive city among the three in-state municipalities included in the study. The 2024 data shows Juneau had the second-highest grocery and health care costs overall and the third-highest prices for miscellaneous goods and services of the more than 250 cities that were surveyed. Holst said that makes sense to him.

“There are just some things about being in Alaska that make our costs higher,” he said. “We’re far from other markets, we’re isolated, transportation costs all contribute.” 

According to the report, all three Alaska cities were among the top 25 most expensive cities surveyed. Fairbanks and Anchorage also ranked among the top spots for the highest health care and grocery costs. 

The report also shows that housing costs are nearly half of most Alaska residents’ annual income. Juneau has had the highest average sale price for a single-family home in the state for the past two years. 

Dan Robinson is an economist and authored the state’s report. He says there are some silver linings in the data when it comes to housing. 

“Even though our housing costs are relatively high, housing has been inflating much faster in the U.S. than it has in Alaska,” he said. 

He says over the past 10 years or so, the rise in housing costs in the state has slowed down, while other areas in the Lower 48 began picking up. 

“They have been growing significantly faster than Alaska,” he said. 

The high — and growing — cost of living in Juneau and across the state has triggered some policy responses in recent months. A new state law went into effect this month that raises the state’s minimum wage and implements a new sick-leave policy. 

The two ballot initiatives set to appear in Juneau’s fall election ask voters whether to place a limit on the city’s property tax rate and remove local sales tax on food and utilities. Advocates for the initiatives say they will provide immediate financial relief to residents – if they’re approved by voters.

Sport fishing for wild king salmon in Southeast Alaska is now more restricted for some people.

Nonresident anglers can no longer fish for king salmon in the region. State managers closed the sector because of harvest projections.

However, harvesting hatchery king salmon is still allowed in certain areas with special fishing regulations near Juneau, Ketchikan, and Petersburg because hatchery fish don’t count toward the amount of wild king salmon anglers can harvest. That includes the Juneau designated saltwater hatchery area, Herring Bay near Ketchikan, the City Creek release site near Petersburg and the Blind Slough-Wrangell Narrows terminal harvest area.

Patrick Fowler is the regional fisheries management coordinator for the Alaska Department of Fish and Game. He said sport fish anglers have been catching more king salmon than expected so far this season, indicating they’d exceed the allowed harvest limit by about 4,000 fish. So the department took restrictive action.

“We need to keep the sport fishery within its allocation. And following the management plan that the Board [of Fish] gave us, we have to close the nonresident fishery in order to keep the sport fishery within allocation while protecting that resident opportunity,” he said.

The Alaska Board of Fisheries gave the department new directions for managing the king salmon fishery, allowing them to change fishing rules during the season as necessary so anglers only catch the amount of wild fish they’re allowed to take this year. That allocated amount is part of an agreement between the U.S. and Canada, called the Pacific Salmon Treaty, which ensures both countries get some fish.

Alaska residents get priority for sport fishing king salmon. Fowler said it’s still unknown how the resident harvest will add up, and the nonresident sector could reopen later in the season if further projections allow.

“We’re not ruling out that the fishery won’t reopen,” he said. “But we need to watch how the resident harvest materializes.”

In other restrictive action, all anglers —including residents— are prohibited from taking wild king salmon in the zone outside of state waters, called the exclusive economic zone. Fowler said very few anglers harvest king salmon in that area, which begins just over three miles from the outer coast.

“We estimate about 1% of the Chinook (king salmon) harvest happens in the exclusive economic zone,” Fowler said. “The vast majority of, you know, sport fish harvest and effort occurs within state waters.”

According to state law, sport fish violations have a base fine of $100, and there’s an added $150 fine per each fish taken illegally.

According to Alaska Wildlife Troopers, which is the agency that enforces the law, sport fishing charter businesses that retain fish in violation of the law garner heavier fines —including misdemeanor charges— and gear like rods, poles and vessels could be seized.

Any king salmon caught should be released and returned to the water immediately and unharmed, according to Fish and Game.

The regulations went into effect July 7 and will last through the end of September.

The Juneau Assembly is moving forward with a plan to ask voters this fall whether to implement a new seasonal sales tax system next year. 

The proposed change is meant to capitalize on the 1.7 million cruise ship visitors that come to town each summer. The new structure would raise sales taxes in the summer months and lower them in the winter. 

Assembly members voted at a finance committee meeting on Wednesday to take public comment on the proposal later this month before deciding whether to put it on the October municipal ballot. 

Assembly member Alicia Hughes-Skandijs said she thinks the idea will be well-received by many in the community.

“In what is an increasingly seasonal economy, it makes sense to capture maximum yield when you have all these folks in town,” she said. 

Seasonal tax structures aren’t uncommon in tourism towns in the state. Other Southeast Alaska towns like Ketchikan, Sitka and Skagway have similar seasonal tax structures in place already.

Right now, Juneau levies a 5% local sales tax. That’s made up of both permanent and temporary taxes that help pay for general government costs, some specific voter-approved projects and community priorities. 

But if voters approve the proposed seasonal sales tax system, consumers would instead pay a 7.5% tax in the summer from April through September and a 3.5% tax in the winter from October through March. 

Members decided on Wednesday to remove a part of the original proposal that would have used the additional revenue from the new system to offset the cost of removing local sales tax on food and utilities. That’s because it would have basically mirrored another ballot measure that’s going before voters this fall.

Earlier this month, an advocacy group called the Affordable Juneau Coalition successfully gathered enough signatures to put two questions on the local ballot this fall. Both aim to lower the cost of living for residents, including whether to remove local sales tax on food and utilities.

Alaska lawmakers plan to compel the administration of Gov. Mike Dunleavy to release data on oil taxes through a rare use of the state Legislature’s subpoena power.

It’s the latest development in a long-running dispute between the Legislature and Dunleavy administration over whether the state is getting all the tax revenue it should from its most lucrative natural resource.

Sen. Elvi Gray-Jackson, an Anchorage Democrat who chairs the Legislative Budget and Audit Committee, a joint House-Senate panel overseeing audits of state government, said subpoenas were the next logical step in completing an oil tax audit that’s been ongoing since 2020.

“We want to work with the Department of Revenue, period,” she said. “But the auditor has been trying to get this information for a very, very long time.”

Gray-Jackson’s committee unanimously authorized a $50,000 contract with outside attorneys to draft and send subpoenas to the administration to move the audit forward.

They’re looking for data that shows whether the Dunleavy administration has been properly enforcing the state’s oil tax laws. So far, the legislative auditor – the official the state Constitution puts in charge of examining the state’s books – hasn’t been able to get the data, at least, Gray-Jackson said, not in a format that the auditor can analyze.

“She’s trying to get the information she needs to complete her audit, but in the format … that’s understandable, in the format that has been done in the past,” Gray-Jackson said.

The most recent audit of that oil tax data was in 2018, and it showed that the Department of Revenue had raised $1.3 billion over six years by identifying underpayments from oil companies.

But more recently, the auditor told legislators at hearings this spring that the Department of Revenue has provided only raw data and contends that the department is not required to compile the data into a summary table similar to what state officials provided in 2018.

“That interpretation overturns longstanding precedent, and it essentially limits the oversight of the Legislature,” auditor Kris Curtis told lawmakers in May. “The fear is that state agencies from here on out will refuse to provide or compile data in any type of format for future legislative audits.”

In a letter to legislators earlier this year, Revenue Commissioner Adam Crum said his department’s Tax Division “has always been transparent” with the Division of Legislative Audit, the organization that the auditor leads, but said that compiling the data in the format requested by legislators would be time-consuming. Crum attached a 2020 letter from former Attorney General Kevin Clarkson outlining the state’s position that certain oil tax records are protected by attorney-client and other legal privileges.

Crum’s letter expressed “concerns” with Senate Bill 183, which would make it a crime for state officials not to provide data in the form or format requested by the legislative auditor.

“I think we’re dealing here with hundreds of millions and into the billions of dollars,” Sitka Republican Sen. Bert Stedman said at a committee hearing earlier this year.

The bill ultimately passed by a wide margin, but Dunleavy vetoed it, saying it raised constitutional issues.

Whether the Legislature can override the veto is unclear — not least because Dunleavy called a special session for next month and told some lawmakers to stay away from the Capitol for the first few days to prevent the rest from overriding his vetoes.

Anchorage Democratic Sen. Bill Wielechowski said he thinks the governor’s request to skip the beginning of the session isn’t just about upholding Dunleavy’s veto of $50 million in education funding.

“This is all about protecting billions of dollars in taxes, likely tax evasion, to the oil industry, and it’s about benefiting the rich and the privileged at the expense of the rest of Alaskans,” Wielechowski said.

Dunleavy and legislators have traded barbs over the bill and the dispute behind it.

As the bill came to the governor’s desk in late May, the House speaker and Senate president sent a letter to Dunleavy saying Senate Bill 183 had been an “unfortunate but necessary response” to what they called a “persistent pattern of obstruction within the senior ranks of Alaska’s Department of Revenue.”

After vetoing the bill, Dunleavy fired back with a letter of his own, saying claims the administration was acting “illegally or unethically” were “unfounded and unsupported by any evidence.”

Dunleavy said he was open to working with the legislative auditor to get the data lawmakers seek.

Asked Tuesday when the data would be turned over, Dunleavy’s office said the governor’s letter and the revenue commissioner’s earlier statement to legislators were its only response.

Rep. Will Stapp, a Fairbanks Republican, said even if lawmakers get more insight into how the administration has handled oil taxes, there’s no certainty on whether that would result in a windfall for the state.

“It’s important that we audit the functions of our executive branch and especially our oil tax structure,” he said. “I would just be very skeptical that they owe us a billion dollars.”

Stapp said he’s planning to be in Juneau for the start of the special session next month, but he said he’s not convinced that the bill would make a difference in resolving the long-running dispute.