Alaska Fiscal Policy: Where we are headed …

Co-Chair (and Chugach Electric Association, Inc. General Counsel) Mark Johnson and I closed the books yesterday on another exceptional two-day conference on “Energy in Alaska” (retitled this year, “Energy Markets and Regulation in Alaska”) put on annually by Law Seminars International.  We have been co-chairing the seminar since … well I am not quite sure I can recall.

As we shuffled the deck a bit in light of the election and other recent events, I ended up giving a set of remarks focused on Alaska’s current fiscal situation, which incorporated for the first time a look at the “work in progress” FY 2016 budget prepared by the Parnell Administration and transferred to Governor Walker’s Administration as part of the transition.  That proposed budget, and what the Walker Administration has to say about it, is available here.

My presentation is above.  My comments on the “work in progress” budget are at slide 10.

The conference always results in great discussions with serious people during the breaks and after each day’s set of presentations are completed.  This year’s was no exception.

At the reception following the first day’s events I appreciated the opportunity to explore in detail each of the five options for closing this year’s budget gap.  They are, in no particular order — cuts in spending, use of remaining savings, “raiding the PFD” (either directly or indirectly by spending from one of the accounts used in the calculation of the PFD), income taxes, sales taxes and transfer of increased responsibility (and cost) for government services to local government.

At the conclusion I came to realize that a realistic solution to “where we are headed” necessarily will involve all five.   I will be writing — and talking — about that more in the coming weeks.

One response to “Alaska Fiscal Policy: Where we are headed …

  1. Given what the Congress just did with the budget, in spite of all the rhetoric during the campaigns across the country, the Rs still approved everything the Dems wanted. Even Obamacare.
    All to stop the new Congress in 2015 from throwing the skids to the spending.
    What is going to make Alaska any different? If one notices, we have been a microcosm of DC in terms of spending like a drunken sailor in the face of fiscal uncertainty.
    When Walker ran in 2010, he had a solid conservative platform. Walker intended to cut state employees by 800 the second day in office–at will employees. He intended to cut the budget by ending the duplicate programs. He would have enhanced revenues with a gas line to Valdez, something now in serious question, given the insanity of the ASAP route to Nikkiski. And, built spurs to every village and town along the Richardson to Valdez, with a planned spur across the Denali and down the Parks. Cheaper energy, a petrochemical industry in the interior using the gas liquids–if there are any left–resulting in a far greater fiscal impact beyond a gas line and a few bucks a year into the state coffers for the methane sold. Yes, Walker had a plan. In 2014, that changed. he no longer talked about that plan.
    One has to remember that Congress gave the TAPS corridor litigation free as the only route to getting Alaska’s NS oil and gas to tidewater. Valdez is ice free, Cook Inlet is not.
    In 2014, his campaign lost the fiscal conservative ardor in favor of a drift to the left as the campaign went on. By the end of the Primary, it was obvious that he had thrown the conservative stances away in favor of the unions and the Dem vote. With a liberal bent in policy and a curtailed fiscal stance, can we expect Bill Walker to do anything in the face of a Chennault and Hawker House? Especially, a House that has shown no fiscal restraint for at least 12 years?
    Walker talked about cutting the budget 16%, now down to 5%, if that.
    Don’t expect too much from Walker’s Faustian construct. Bill means well, but the price of his victory has yet to be demonstrated fully.
    Personally, I think he and Fleener would have won, anyway. Parnell was not a popular gov, and the NG scandal was the straw that broke that camel’s back.