Alaska fights to keep wolf program

Alaska Gov. Sarah Palin is supporting state legislation to end lawsuits by groups opposed to the shooting wolves from planes.Supporters said the bill would simplify the language in Alaska’s predator control laws, aimed at boosting moose and caribou populations for hunters. Critics such as the conservation group Defenders of Wildlife said the legislation would allow predator-control expansion across the state, the Anchorage Daily News said Wednesday.

“It gives carte blanche for the Board of Game to move ahead based on a hunch,” Tom Banks of Defenders of Wildlife told the newspaper. “Based on a belief, really, that killing wolves in a particular area would be helpful.”

The aerial predator control program has resulted in the death of more than 700 wolves in the program’s five years. While it is mostly aimed at wolves, it has also included bears, the newspaper said.

Source: United Press International

Lawmaker warns against altering education funding

The head of a legislative task force charged with fixing the state’s school funding warned lawmakers Tuesday that tinkering with any proposed changes could cause a “long-fought, well-discussed compromise” to collapse.Rep. Mike Hawker, R-Anchorage, told the House Finance Committee that it was premature to consider the $200 increase proposed by Gov. Sarah Palin to the base student allowance, or BSA. That allowance is the starting amount in a formula the state uses to determine how much a school district receives from the state per student.

Read the full story at Juneau Empire

Budget dispute is about terminology

Alaska may be awash in cash thanks to high oil prices and a boost in oil taxes, but it hasn’t made building a state budget any easier or less sly than it was in the lean years.

Only two weeks into this year’s session, lawmakers already are engaged in a dispute with the administration over Gov. Sarah Palin’s claim to be reining in state spending.

Palin touted a modest 4 percent growth in state spending last December when she unveiled her $8.3 billion operating and capital budgets, made up from various funding sources, including $4.4 billion from the state’s treasury.

Lawmakers say it’s actually a much larger increase — as much as 15 percent — under their method of accounting.

And in this election year, they are worried they will be cast as the big spenders by the time the dust settles over next year’s budget plan.

“What does it say? Does it say that the governor was wrong in her budget approach? Not necessarily. Does it say, well, the Legislature is at it again: just spending away. That’s the concern,” said Rep. Mike Chenault, R-Nikiski.

Members of both the House and Senate Finance committees have wrestled with the issue over the last two weeks in meetings with Palin’s budget director, Karen Rehfeld, and her legislative counterpart, David Teal. It’s just the start of a long budget process that is typically only resolved in the last hours of the session.

Both sides agree on the anticipated revenues and expenditures for the current year and the year that begins July 1. The disagreement boils down to a difference in where the numbers appear on the summary sheet.

It often comes down to conflicting views over use of the surplus, a $2.6 billion gift from skyrocketing oil prices and a hike in the state’s oil production tax. What Palin counts as savings, like her plan to sock away three years of education funding, lawmakers describe as deferred spending.

Palin’s budget also places programs like revenue sharing, education increases and tax credits for small producers in the capital budget instead of the operating budget, where lawmakers believe they either should be or traditionally have been placed.

As a result, Palin’s spending overview showed a mere bump of $39 million from the state treasury to pay for the cost of operating state government. In the Legislature’s accounting, using the same numbers, that bump is closer to half a billion dollars.

Rehfeld and Teal are working to reconcile the placement of numbers, though some differences still exist.

“At least we are all saying the same things. We are trying to restrain the operating budget, we want to make room to do some good things in the capital budget and we want to save surplus. So it’s just how are we going to get there,” said Rehfeld.

Palin, however, took exception this week to lawmakers’ suggestions that her budget is not open and transparent.

“It is the Legislature’s responsibility to appropriate and we anticipate changes to our (fiscal year 2009) fiscal plan; however, we fundamentally disagree that spending is higher than reported, due to some committee members’ arguments over which column the funds are in,” Palin said.

The arguments are not new. One veteran lawmaker says the budget process has always been particularly challenging in Alaska given the volatility of its main revenue source.

The state gets 85 percent of its revenue from oil production, but the state’s largest field, the North Slope, is experiencing a 6 percent decline yearly.

Sen. Gary Wilken, R-Fairbanks, a former and longtime member of the Senate Finance Committee, points out that five years ago, the budget balanced at $25 dollars a barrel. Today it balances at $61 a barrel.

Wilken said the tendency of lawmakers, from both the administration and the Legislature, to put the best light on spending with creative budgeting has complicated the budget picture over the years.

Conflicting views on how to deal with the massive surplus further confuse the matter, he said.

“Problems now are with new-found wealth. What a wonderful problem to be burdened by savings: how to classify it and how to save it. I go back to 1999, we would have died to have that problem,” said Wilken.

Palin and lawmakers agree they need to save much of this year’s surplus for the lean years ahead.

Next year’s surplus is expected to be much smaller and, with oil production in decline and oil prices uncertain, experts say the state could be back to deficit spending by 2010.

That prediction exacerbates the need for a common yardstick to measure the budget if they want to control growth in spending, lawmakers say.

“Anything that is done that doesn’t paint the true picture or has us falling off a billion-dollar cliff in four years, I stand firmly against because it is brain-damaging budgeting carried to the extreme,” said Rep. Mike Kelly, R-Fairbanks.

Oil executives head to Alaska’s Senate

CNNMoney.com

Jan. 23, 2008 (Thomson Financial delivered by Newstex) –

JUNEAU, Alaska (AP) - Fresh off having its gas pipeline proposal rejected by Gov. Sarah Palin, ConocoPhillips took its argument to the Legislature.

Company executives were scheduled to state the case for their pipeline proposal to the Senate Resources Committee late Wednesday.

Last November, the Houston-based company submitted what it called an alternative to the state’s Alaska Gasline Inducement Act, or AGIA.

Two weeks ago, Palin said the company’s proposal gave the state no reason to deviate from AGIA.

The state wants a plan that guarantees progress toward pipeline construction and is friendly toward new exploration.

AGIA was designed to stimulate competition among oil and gas companies and independent pipeline companies.

Five applications were submitted under the state’s terms, and only the one from TransCanada Alaska Company LLC/Foothills Pipelines Ltd., was advanced to a public comment period, which ends March 6.

ConocoPhillips didn’t apply under AGIA. Even though Palin rejected it, ConocoPhillips — the state’s largest oil producer — is trying to advance its plan with lawmakers.

But ConocoPhillips also said it first wants a long-term fiscal package to cover costs such as royalties and taxes before moving forward on a multibillion dollar investment.

That option failed under the previous administration, prompting Palin to chart a different course with AGIA and the intent of tapping the North Slope’s 35 trillion cubic feet of proven natural gas reserves.

State Sen. Charlie Huggins, a Wasilla Republican who heads the Senate Resources Committee, says the Legislature will listen to ConocoPhillips.

‘All options have to be on the table,’ Huggins said.

‘I characterized it as a risk worth taking,’ he said. ‘Now I question that rationale because it appears it may become too risky as there isn’t any competition.’

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Oil revenue reawakens dream of Susitna dam

The price was $5 billion 20 years ago

JUNEAU — Alaska legislators are talking seriously about resurrecting the long-dead dream of a Susitna hydroelectric dam now that the state is flush with oil money.

House Speaker John Harris said he’s interested in taking a close look at the mega project. The potential for cheaper energy in Alaska’s Railbelt needs to be explored as utility bills go up, and the state has a multibillion-dollar budget surplus, the Republican from Valdez said.

“I want to dust off the proposal again, and let’s look at it and see what it’s going to take to make either that or some other proposal work,” Harris said.

Fairbanks Republican Gary Wilken, a member of the Senate minority, is a big Susitna dam supporter.

“We should take $3 billion, set it aside to backstop bonds and build the Susitna dam,” Wilken said, “to bring competitive electrical power to 70 percent of Alaskans that will pay off for the next 100 years.”

Alaska state officials began talking about a huge hydro project on the Susitna River in the 1970s as the North Slope oil money first started to flow into the state treasury. The project, which actually called for two dams, collapsed under its own weight in 1986 as oil prices and state revenues plummeted, leaving the estimated $5 billion for construction bonds out of the state’s reach.

The state spent $132 million studying the project before finally giving up on it. Some legislators blanch at the idea of the state diving back into such a costly effort.

“It would take quite a bit of convincing before I think I’d want to put money into the Susitna dam,” said Anchorage Republican Sen. Con Bunde.

Anchorage Democratic Rep. Mike Doogan said a $5 billion project in 1986 might cost $10 billion today.

“Unless the cost of building dams has against all odds gone down, I don’t see any reasons it would be a more likely prospect now than 20 years ago,” he said.

COST AND SUPPORT

Doogan said such a project would have to prove it could provide cheaper power and compete with all the other demands across Alaska for public dollars.

House Speaker Harris said he doesn’t know just what the project would look like or how much it would cost today.

He spoke of just a single dam this time at Devil’s Canyon northeast of Talkeetna, although he said it might require a second, smaller, earth and rock filled dam.

Harris said he doesn’t know if the state could afford a Susitna dam project or even if it is the best hydro project out there. But he said it’s worth looking at because the public expects lawmakers not to blow the budget surplus and investing in low-cost energy is good for the long term.

The Legislature’s decision last year to retroactively raise state taxes on the oil companies has combined with high crude oil prices to leave the state swimming in cash. The amount of the surplus will depend on the price of oil, but lawmakers are estimating it might be between $4 and $5 billion before the next fiscal year ends in June 2009.

Harris said he thinks the level of support in the Legislature for a Susitna dam project would depend on how much it cost and how it could be financed. It could be a hard sell to many lawmakers who have said they want to save at least a big chunk of the surplus in the Constitutional Budget Reserve,

Harris said he plans to talk to the Palin administration about the dam project.

Gov. Sarah Palin’s spokeswoman, Sharon Leighow, said the governor supports renewable energy but would need to look at the cost and environmental impact before weighing in on a Susitna dam project.

While state officials haven’t seriously pursued the project for 20 years, U.S. Rep. Don Young, R-Alaska, has continued to try to secure funding to jump-start it through the years.

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