Here is a sampling of editorial opinions from Alaska newspapers:
Dec. 6, 2014
Ketchikan Daily News: Beginning again
Good luck, Gov. Walker.
Bill Walker became Alaska’s governor last week.
Throughout the gubernatorial campaign, he repeated his concern for Alaska’s financial status.
The state, which depends on the oil industry for about 90 percent of its unrestricted revenue, has had declining production for some time. Recent governors - until Gov. Sean Parnell, who Walker narrowly defeated in the November election - passed the financial problem along to the next governor and to the next governor. Parnell convinced the Legislature to pass a new oil-tax structure bill. Then he assured voters when an attempt to repeal it surfaced to stay with the structure.
The state’s revenue situation has become more bleak in recent months. A year ago, a barrel of oil sold for $105; today it’s $68. The state’s budget breaks even at$117 per barrel.
Whether Parnell’s tax structure will survive the Walker administration’s review remains to be seen. Undoubtedly, it’s a key topic of conversation, or should be. Parnell and other supporters of the structure maintained the state has already seen new production as a result.
But, under that structure, Alaska also returns revenue to the industry to encourage new production.
And, the price of oil, as mentioned, has declined significantly - even as recently from this past summer’s $108 per barrel
Gov. Walker must act, and he has choices which will be less than popular. While Alaskans will want the finances brought under control, most still want their own particular projects and services. However, when revenue declines so must spending.
One of the biggest expenses in a budget is personnel. Given that unions endorsed Walker, it will be interesting at the least to watch how they and the new administration deal with the inevitable reduction in jobs. Walker said he would cut 16 percent out of the operating budget. He has walked that back a bit. But, the fact remains, jobs are vulnerable with the state’s current financial status.
It would be preferred if the cuts could be through attrition. But, while that is being staff sensitive, it also is slower and more costly. Plus, the attrition likely wouldn’t occur with the positions it needs to.
The loss of jobs also would affect communities. State employees work in cities from Ketchikan to Barrow. Those staff workers pay for services and buy groceries and other goods in these communities. Their jobs help support businesses and government services.
Fewer people buying goods translates into less community sales tax, increasing the financial concerns of communities. With less revenue, the communities must look at increasing taxes and fees and/or reducing spending - i.e. jobs? That’s a double whammy for the communities when both state and local jobs begin to disappear.
Plus, unless the jobless leave the state or find other employment here, the number and total cost of unemployment checks increases.
Some communities and the state have reserves - rainy day accounts and, specifically in the case of the state, the Alaska Permanent Fund. But reserves don’t replace revenue for the long term. Nor do they grow when they are being drawn down. Spending them increases an entity’s precarious situation.
The next consideration is increased revenue. If governments don’t have enough revenue from industry, then they turn to taxes and fees - both of which increase the drag on an economy. But, without industry and new development, the likelihood of one or both increases dramatically. Gov. Walker said during the gubernatorial campaign he didn’t favor an income tax. Check that possibility off the list of ways to rein in the state’s finances.
Gov. Walker has inherited a significant challenge, given the facts above and the fact that many Republicans in the Legislature supported Parnell’s, not Walker’s, election - most notably House Speaker Mike Chenault.
But during the campaign, Walker ached to take it on. He knew what he thought wouldn’t work. Let’s hope he also knows what will.
He has Alaska, business and lifetime experience. He also has prospects for Alaska’s Arctic, the development of which could improve communities’ economics as far south as Ketchikan.
Ketchikan and southern Southeast’s mining also will contribute to the state’s economic well-being. Plus, the state can cut its timber and actively endorse federal timber sales.
At the same time, it should be sure not to let spending cuts negatively affect the fisheries and tourism industries. It’s imperative to, at the very least, maintain and preferably grow existing industries.
It’s a tall order. But, a new administration with high energy, as is always evident at this juncture following the swearing in of a governor, might be able to fill it.
Alaskans will be watching anxiously and hopefully.
Dec. 7, 2014
Juneau Empire: Empire Editorial: Sealaska land deal should move forward
It’s time for the federal government to fulfill its promise.
On Dec. 17, 1971, President Nixon signed the Alaska Native Claims Settlement Act into law.
ANCSA, as it was known, called for the distribution of 40 million acres to Native villages and regional corporations created by the act.
Almost 43 years since Nixon put pen to paper, many Native groups are still waiting for their land. Among them is Sealaska, the regional Native corporation for Southeast Alaska.
A measure now working its way through the U.S. Congress promises to fulfill the final land selection of Sealaska, which will receive 70,000 acres of Tongass National Forest land on Prince of Wales Island and other islands in Southeast Alaska.
It’s past time for this land selection to move forward.
Sealaska has been lobbying Congress to complete the land turnover for almost a decade, without success. Environmental groups and several small Southeast communities are against the Sealaska land deal because the corporation plans to log and mine its new acquisition.
We are sympathetic to that argument: We would prefer Sealaska leave old-growth forest standing and seek profits somehow else, perhaps by preserving the land and selling carbon credits or making it available for compensatory mitigation.
That is not our decision to make, however. The federal government, through ANCSA, pledged to turn land over to Sealaska. It included no caveats in the arrangement, it mandated no conservation. Earlier this year, the Empire published a series of stories exposing Sealaska’s poor financial condition. We hope that this land deal helps Southeast’s regional Native corporation become financially stable again.
Sealaska is owed land, and what it does with that land is up to its shareholders and its board of directors.
The land claims legislation moving forward in Congress includes language that preserves 150,000 acres - more than twice the area being conveyed to Sealaska - for salmon and forest habitat. We hope this will offset the conservation losses through the land conveyance and assuage the concerns of people in places like Edna Bay and Thorne Bay.
The federal government has a duty to fulfill the land claims promised under ANCSA. Federal officials did not ask Native approval when they established the Tongass National Forest or Glacier Bay National Park - they simply acted without regard for the people who already lived in those places.
ANCSA was designed to compensate - at least partially - the Natives who suffered by the government’s capricious actions. They are an imperfect solution, but they are the best solution to date. The government has a duty to fulfill, and the Sealaska claims are a sign that the process is moving forward.
Dec. 8, 2014
Fairbanks Daily News-Miner: A dwindling appetite for megaprojects
The Ambler road. The Juneau road. The Knik Arm bridge. The Susitna Dam. The Alaska Stand Alone Pipeline (ASAP), known colloquially as the “bullet line.” The large-diameter natural gas pipeline.
Alaska has no shortage of capital-intensive megaprojects in the works, but now the state is scrambling to find funds to cover the basic needs for state operating expenses. As oil prices continue to dip, the fortunes of Alaska’s megaprojects are waning precipitously. The question of how many such projects the state can afford - if any - should be a focus of budgeting efforts in the coming months.
As oil prices soared during the past decade, there seemed to be money for everything. The Susitna-Watana hydroelectric dam had been shelved during Gov. Bill Sheffield’s tenure in the 1980s - the victim of another downturn in the oil market. In 2008, surging revenues prompted Gov. Sarah Palin’s administration to restart work on the project. Gov. Sean Parnell was a strong supporter of the project, which promises to bring cheap, renewable electricity to half the state’s residents. But even before the price of oil began to drop like a stone, legislators started backing away because of the project’s $5 billion price tag.
The proposed Ambler road would stretch 200 miles west from the Dalton Highway, providing access for mining companies to harvest copper, zinc, lead and silver on the south slopes of the Brooks Range. At an estimated cost of around $400 million, the road doesn’t have quite the sticker shock as bigger-ticket items like Susitna and the gas line projects. But it also would have less financial benefit to the state and its residents, as mineral extraction doesn’t provide substantive tax revenue for the state (mining provides tens of millions of dollars to state coffers, compared to several billion dollars in oil tax revenue) and use of the road would be restricted to commercial traffic and otherwise closed to the public.
Each of the major capital projects the state is pursuing has trade-offs. The Juneau road could provide more reliable access to the state’s capital, but it’s also a lot of money to spend to shorten a ferry trip, as a link-up with the rest of the state road system still would be unfeasible. The Knik Arm bridge would ease Anchorage’s growing pains, but is a shorter commute to the Matanuska-Susitna Valley a more pressing need than, say, doing something about high energy prices in the Interior and rural communities? Natural gas line projects could provide a big payoff both in revenue, jobs and affordable energy for the state, but low oil prices make developing gas less attractive to producers, and the state must negotiate with North Slope leaseholders, a stumbling block for decades of efforts to build the line.
With money and time both at a premium, it’s time to take a hard look at which of the state’s proposed mega-projects will provide the best return to the state and the greatest benefit to its people. We no longer have the luxury of having enough money to proceed down the track of constructing all projects at once - Gov. Bill Walker and the Legislature must weigh each carefully and continue forward with only those that pass the cost versus benefit test.
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