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Juneau lawmaker proposes industry tax on lobbyists

  • Author: Nathaniel Herz
  • Updated: December 2, 2017
  • Published January 30, 2017

JUNEAU — Juneau Democratic Rep. Sam Kito III is proposing a special income tax on Alaska's lobbyists — including his own father.

Kito is the son of Sam Kito Jr., one of Juneau's longest-serving lobbyists. This year, Kito disclosed more than $200,000 in fees including contracts with telecommunications company GCI, drug maker Eli Lilly and the North Slope Borough.

Kito III, who worked for his father before being appointed to the Legislature in 2014 by Gov. Sean Parnell, introduced House Bill 91 on Monday morning. It would require lobbyists to pay a 2.5 percent tax on their contracts.

Rep. Sam Kito III, D-Juneau, speaks on the House floor two weeks ago. (Marc Lester / Alaska Dispatch News)

Though non-binding, Kito's bill suggests its proceeds could go toward beefing up the state agency charged with regulating lobbyists, the Alaska Public Offices Commission, Kito said.

"The bill is to try to support the lobbyists," Kito said in an interview.

As the representative for downtown Juneau, Kito has more than a dozen lobbyists who live in his own district, including his father.

In a phone interview Monday, lobbyist Kito said he wasn't familiar with the legislation and hadn't spoken to his legislator son about it — though he expressed no displeasure with the concept.

"He's his own guy," said Kito Jr. "He can do what he wants to do."

Lobbyist Sam Kito Jr. in a 2005 file photo. (Photo by Seanna O’Sullivan)

Kito III said he wants the revenue produced by his legislation to be directed to APOC, which oversees state laws related to lobbying and campaign finance. Separate provisions in HB 91 would institute $100 registration fees to be paid by political candidates and groups.

APOC's spending, always in jeopardy as an agency that investigates lawmakers, has been slashed recently by the Legislature and Gov. Bill Walker as part of their efforts to close a multibillion-dollar deficit, bringing the agency's budget from more than $1.5 million in 2014 to just over $1 million this year.

APOC already charges lobbyists $250 to register each of their contracts, and it raised $120,000 in user fees last year.

Kito said he wants to double the amount of revenue from fees and taxes. That could allow the agency — which currently has just one low-level employee in Juneau — to boost oversight and auditing of lobbyists, he said.

"Right now, we just have somebody that's checking boxes and collecting checks," Kito said.

The idea isn't likely to engender much public opposition, given that lobbyists aren't generally held in high regard, said Jim Lottsfeldt, an Anchorage political consultant whose lobbying clients this year include the ACLU, a fishing industry group and insurance company Moda Health.

"I don't think you'll see people protesting in the street over that bill," Lottsfeldt said in a phone interview. But, he added, "As far as getting it out of the building — I think it might have a tough time."

Lottsfeldt said he wouldn't personally lobby against the bill, joking instead, "I'll let my colleagues do the heavy lifting."

Other lobbyists, in interviews, expressed mixed views, with several noting that the existing $250-a-contract fee can add up quickly. Two others said any taxes would likely be passed on to clients.

The 2.5 percent tax could take a bite out of the income of Juneau's top lobbyists like Kent Dawson and Jerry Mackie. Each has disclosed 18 contracts this year; Dawson's $1.1 million in fees would cost him $27,600 in taxes, while Mackie's $791,000 in fees would generate some $20,000, depending on how much in expenses they could deduct.

Mackie declined to comment and Dawson didn't return a phone message. But Ray Gillespie, who would have to pay a maximum of $12,500 on his $500,000 in annual lobbying fees, sounded open to Kito's tax idea.

"You can quote me on this: Lobbyists should contribute to stabilizing our fiscal situation," Gillespie said in a brief interview in the Capitol stairwell.

By late Monday, Kito said he'd heard from a few lobbyists about his tax proposal but none who was especially critical.

One thing his legislation underscored, however, is the absence of an organized group representing Alaska's small lobbying industry — a lobbyist for the lobbyists.

Lottsfeldt, the political consultant, said it wouldn't be hard for lobbyists to bring up the tax bill themselves at the end of meetings with lawmakers.

Kito had his own idea for the affected lobbyists.

"Maybe they need to form a union," he said.

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