The State Assessment Review Board has a vague and unassuming name. But it has a very specific and very important job – assessing the value of the Trans-Alaska Pipeline.
The board has come under scrutiny after its chair was dismissed, and now Democrats in the Alaska Senate want Sean Parnell to withdraw the name of one of his board appointees because of residency issues. But the governor is backing his nominee.
The governor chose Dennis Mandell of Salinas, California, to serve on the State Assessment Review Board earlier this year. The board gets the final say on the value of the Trans-Alaska Pipeline for tax purposes, and appointees require legislative approval because it is a quasi-judicial body.
During a floor speech on Monday, Senate Minority Leader Hollis French said he would not give that approval because he thinks Mandell’s appointment violates Alaska statute.
“It says that a person appointed to a board or commission of state government shall be and have been before the last general election a registered voter in the state. Boom! I mean it’s clear.”
The Senate Minority Caucus also sent a letter to the governor calling for Mandell’s withdrawal on Monday, and it comes on the heels of an Anchorage Daily News story highlighting his California residency.
While Mandell could not be reached for comment, his board application notes that he worked for the now-defunct oil company Arco for nearly two decades. He last lived in Alaska 15 years ago, and he is registered as a California voter.
French was emphatic that Mandell’s residency was grounds for withdrawal, acting out what he would do if he were in Parnell’s situation.
‘Whoops! I appointed a Californian to a board. I’ve got to fix that. I’m going to withdraw the nomination.’”
Sharon Leighow, a spokesperson for the governor, says that Parnell has no intention of pulling Mandell from consideration. In an e-mailed statement, she wrote that the governor is complying with the constitutional requirements for boards and appointments, but she did not address the statutory requirements.
Parnell’s choices for the State Assessment Review Board have also been criticized because his appointees have a background in the oil industry, and they come after the firing of Marty McGee. McGee was a long-time member of the assessment board who consistently advocated for a higher valuation of the pipeline, and he’s accused the Parnell administration of “stacking” the board with oil industry veterans.
In addition to Mandell, the governor appointed Bernard Washington, of Anchorage, to the board. Washington has served as the chief financial officer of Alaska Public Media, the parent company of KSKA, KAKM and the Alaska Public Radio Network, since 2010. Prior to that, he worked for ConocoPhillips.
For his part, Washington doesn’t think that residency should be a factor if a person is otherwise qualified. He believes the State Assessment Review Board should have a diverse makeup, with members who have had experience with the oil industry and members who have worked outside it.
“You get a better discussion because you have different points of view,” said Washington in an interview.
Washington thinks that in the past, the State Assessment Review Board has been influenced by “politics, which shouldn’t enter into it.” He says he would bring a more quantitative approach.
“What I’d like to see is have a methodology that’s reproducible, that anybody – any rational person – can follow and understand, ‘Oh, that’s how they got to that number.’ And it makes sense. Which means the method has longevity — not the value, because the value’s going to change every year depending on the economic circumstances.”
Washington also says he’s still studying the Alaska Supreme Court decision that was issued last month on pipeline valuation, and that he still has some questions on how the pipeline’s maximum capacity factored into its assessment. The Supreme Court ruled that the pipeline was worth $10 billion during the 2006 tax year, rejecting the argument from oil companies that it was worth just $850 million. For every billion dollars the pipeline is worth, municipalities along its route collect about $20 million in property taxes.
In 2013, the State Assessment Review Board determined the pipeline was worth $12 billion, while the Alaska Department of Revenue put the number at $7 billion.
The Senate Finance Committee is scheduled to interview both board appointees on Thursday. The Legislature will vote on board appointments on April 11.
Watch Sen. French’s remarks starting at 57:10 courtesy of Gavel Alaska: