We are nearly a month into session and things are moving right along. The big news this week in Juneau was a bill that Senator Rob Yundt (R – Wasilla) introduced that would apply Alaska’s 9.4% corporate tax rate to oil and gas producer Hilcorp. Chief Justice Susan Carney delivered the annual State of the Judiciary to a joint session of the Legislature. A House bill to raise the Base Student Allocation (BSA) caught a snag in the House Education Committee due to a member being absent. The House Finance Committee heard a bill to return state employees to a pension. Negotiations on an education deal are on hold.  And Senator Lyman Hoffman (D – Bethel) made some blunt remarks about Alaska’s fiscal problems during a press conference. 

A friendly message and reminder to all our readers. The Landmine is made possible by myself and a team of awesome Alaskans. I have been covering the legislative session in Juneau for the last six years and am back now for my seventh session. If you enjoy the content we provide, please consider making a one time or recurring monthly donation. You can click here to donate. We have a system that makes it super easy. We would really appreciate it. And thanks to everyone who has been supportive.

Senator Yundt drops tax bomb

On Monday (2/10/2025) freshman Senator Rob Yundt introduced Senate Bill 92, a bill that would apply Alaska’s 9.4% corporate income tax to oil and gas producers that make more than $5 million annually – which applies to one company, Hilcorp. Because Hilcorp is an S corporation, unlike ConocoPhillips and Exxon (which are C corporations), they are not subject to the tax.

This is not a new issue: some legislators have brought it up since Hilcorp bought BP’s Alaska’s assets in 2020. Senator Bill Wielechowski (D – Anchorage) has been the most outspoken and has introduced legislation in prior years similar to Yundt’s proposal. But Wielechowski has gone further than the S Corp tax, calling for reductions in the per-barrel credit and limits on what capital expenditures oil companies can deduct from their tax liabilities, known as ring-fencing.

There are a few reasons why Yundt’s bill is noteworthy. Generally, over the years, Democrats have favored oil tax increases while Republicans have not. Even though Yundt is a member of the Senate minority, both the House and Senate are now controlled by Democrat-led majorities. A Conservative Republican from the Mat-Su Valley introducing this bill dramatically changes the dynamic. 

During a Tuesday (2/11/2025), several members of the Senate majority, including Senate President Gary Stevens (R – Kodiak), made positive comments about Yundt’s bill. They went on to discuss other potential changes to oil taxes. But Yundt’s Republican colleagues were not as excited. Many are worried the Democrats may try and load it up with other tax increases. Here is a statement the Senate minority provided to the Landmine about Yundy’s bill:

The Senate Republican Caucus is a non-binding caucus, meaning our members are free to pursue policy proposals that align with their constituent goals and personal values. While Senator Yundt is a valued and respected member of our team, the entirety of the caucus does not align with the proposed legislation SB 92.

The bill has already been scheduled for a hearing before the Senate Resources Committee on Wednesday (2/19/2025). That is sure to be a packed house. 

Other Happenings 

On Wednesday (2/12/2025), the House Education Committee attempted to move House Bill 69 out of the committee and send it to the finance committee. HB 69 is Representative Rebecca Himschoot’s (I – Sitka) bill to raise the BSA by $1,800 over three years. But because Representative Maxine Dibert (D – Fairbanks) was absent, they did not have enough votes to pass out the bill. The committee has seven members, and the Republican minority has three of those seats. So the bill was held. It’s noticed for House Finance tomorrow afternoon. If all of their members are there tomorrow, they should be able to pass the bill out of the education committee in the morning.

The House Finance Committee heard House Bill 78, a bill that would return the state to a defined benefit (pension) retirement system. The bill, introduced by the committee but presented by Anchorage Republican Representative Chuck Kopp (R – Anchorage), is very similar to a bill introduced last year by Senator Cathy Giessel (R – Anchorage), Senate Bill 88. Her bill passed the Senate but failed to get any traction in the House.

There is a big push this year by many in the Legislature to return to a pension. But HB 78 is much different than the former Tier III pension. During one of the hearings, Kopp used the phrase “employee unfriendly” and others have said it’s not a Cadillac plan. At Tuesday’s hearing Kopp went as far to say that employees should plan to get a second job if they want affordable health care in retirement. State costs are still unknown as the state’s actuaries are still assessing the impacts of the bill. Keep an eye on this bill as the pension issue is going to be one of the major issues of this session. 

During a Senate majority press conference this week Senator Lyman Hoffman said, “We’re facing our largest fiscal problem in 30 years.” He went on to say the only way to address our fiscal problems is to raise new revenues. He said absent that happening, there is no other way to fund things like increase education funding and many of the other things legislators want. 

During a Senate minority press conference, Senator Mike Cronk (R – Tok/Northway) said education negotiations between the four caucuses and stand in Governor Jordan Shilling are on hold. Sources report that the negotiations started off good but when it came to figuring out how to pay for everything, the Republicans balked. Keep in mind Governor Mike Dunleavy’s (R – Alaska) education bill would cost around $180 million a year. That is separate from any increase to the BSA. If everyone got what they wanted, it would cost more than $500 million a year!  

Chief Justice Susan Carney delivered the annual State of the Judiciary to a joint session of the Legislature. You can watch it here. It was not nearly as high energy or captivating as former Chief Justice Dan Winfree’s speech two years ago. Carney touched on the delays in the court system and their need for more money to expand the courthouse in Palmer. 

Congressman Nick Begich (R – Alaska) is scheduled to address a joint session of the Legislature on Thursday (2/20/2025). This will be his first speech to the Legislature since being elected in November. 

Former Representative Ben Carpenter seems to be having a lot more fun on the Kenai Peninsula than he would be in Juneau.  

This Week’s Loose Unit 

This was one of those really easy weeks. This week’s Loose Unit is Senator Rob Yundt. A Mat-Su Valley freshman Republican senator introducing a big tax bill is in itself very loose. But the way he did it was maximum loose. Yundt’s bill came as a surprise to nearly everyone in Juneau including his colleagues, lobbyists, staffers, and the media. I have to give him credit for being able to keep that one close to the vest. He also made quite the name for himself in a place where that is not an easy thing to do. 

By introducing this bill, Yundt has opened a Pandora’s box. The Hilcorp tax has long been championed by Democrats like Bill Wielechowski. But a Mat-Su Valley Republican introducing the bill is on another level. It’s classic Loose Unit behavior.

It’s hard to tell what will end up happening with the bill, but it’s sure to be a big issue this session. Especially considering all the things legislators want to spend money on. As loose as Yundt’s bill is, you can’t say the guy does not have balls. This issue should have been dealt with by Dunleavy in 2020 when Hilcorp bought BP’s assets. It’s been like an open wound ever since. With real leadership, a deal could have been made years ago. 

If you have a nomination for this week’s Loose Unit, or if you have any political news, stories or gossip (or any old pics of politicians or public officials) please email me at jeff@alaskalandmine.com.