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Parnell Sends Legislature His Budget Plan for Next Year
Dave Donaldson, APRN – Juneau
Governor Parnell today presented his versions of the operating and capital projects budgets that the legislature will work on during next year’s session.
Speaking to the Anchorage Chamber of Commerce, he said lawmakers shouldn’t expect to spend more in their versions of the budgets than he approved when he signed the current budgets last spring.
Parnell says the new budgets reflect $600-million in spending cuts – and the elimination of 284 state jobs. He says he won’t allow spending to spike just because there’s surplus money available.
With that lower starting point on dollars and positions, we can have a public conversation with the legislature about needs versus wants, about efficiencies and about more effective use of the public’s dollars.
The budget leaves a $3.7-Billion unspent surplus over projected Revenue. Parnell says that needs to join the $13-Billion already in various state savings funds. He calls for restraints against an uncertain future.
Oil production is declining, and oil prices can be volatile. The European debt crisis threatens not only Europe, but the United States potentially heading into recession in 2012. And certainly our own federal fiscal situation and our $15-Trillion national debt is reason for concern. Alaska on the other hand will lead in fiscal responsibility. We do not set a lower starting point for our spending that we will overspend and create worse … create more vulnerability for ourselves as a state down the road.
He says he’s holding the operating budget steady despite several sizeable, unavoidable increases, such as new state employee contracts, the planned opening of the new Goose Creek prison in the Matsu, increased state contributions to cover Medicaid costs, and the unfunded pension liability for state employees.
Like the Federal government has to deal with Social Security and Medicare as its elephant in the room, our elephant in the room – financially – is this unfunded pension liability that we will deal with.
Meeting with reporters following his speech, Parnell said one extra he is looking for is a $350-million package of projects to pay for improvements to ports in communities around the state. $200-million of that will go to complete the renovation underway at the Port of Anchorage. He explained that he wants to put the projects before the public to approve as General Obligation Bonds, not to pay for them with cash.
Our savings accounts are making more money than the cost of financing this three hundred fifty million dollars. So where we have to pay three percent on G.O. Bond financing but we’re making five percent, six percent, in some cases even more in some of our savings accounts, it makes sense to use this cheaper money and make more on our savings. We’ll have that discussion with the legislature.
Other projects in the bond package include $110-million for a port in the Matsu Borough, and $10-million dollars each for work on the ports in Emmonak, Ketchikan and Seward.
House Minoriity Leader Beth Kerttula points out that the governor does not allow for any inflationary costs in his spending plan. She says that will be especially difficult for schools since the governor’s budget amounts to a decrease in spending power for local districts.
The budget bills will be formally introduced at the start of the legislative session that begins January 17th.
Senate Confirms Judge Morgan Christen
Libby Casey, APRN – Washington DC
The U.S. Senate voted to confirm Judge Morgan Christen on Thursday to the Ninth Circuit Court of Appeals. The tally was 95-3. The “no” votes came from conservative Republican Senators Jim DeMint of South Carolina, Rand Paul of Kentucky and David Vitter of Louisiana.
Alaska’s Senators sung her praises Thursday morning on the Senate floor before the vote. Republican Lisa Murkowski noted the barrier-breaking significance Christen’s seating would be.
“This is really Mr. President an historic nomination. Only two Alaskans have had an opportunity to serve on the 9th Circuit. And both those judges were somewhat predictably men,” Murkowski said.
Christen has been a justice on the Alaska Supreme Court. She had bipartisan support from the Alaska delegation to move to the 9th Circuit. She was also previously elevated in her career by both Democratic Governor Tony Knowles and Republican Governor Sarah Palin. Democratic Senator Mark Begich says she’s been recognized for her volunteer work and philanthropy in Alaska.
“I’ve known Morgan for years and am continually impressed by her keen legal mind, her oustanding ecord of public service and her ability to carve plenty of time out of her schedule for extensive volunteer work” Begich said.
The seat on the 9th Circuit has been vacant for 18 months since Judge Andrew Kleinfeld took senior status. The Circuit has jurisdiction over much of the west, including Alaska, California, Washington and Montana. It’s headquartered in San Francisco and is the largest of the nation’s 13 courts of appeals.
Judicial confirmations have been happening slowly in the Senate because they’ve become political cannon fodder. A handful of Republicans have intentionally held up votes, even when the judges’ actual nominations aren’t controversial.
Spending Bill Proposes Pipeline Office Cuts
Libby Casey, APRN – Anchorage
The Federal Office that’s coordinating plans for an Alaska natural gas pipeline project takes a huge hit in a spending bill unveiled by the U.S. House over night. The Office of the Federal Coordinator would get $1 million in funding – a cut from about $4 million. The 75 percent reduction would mean a major reorganization of the office, according to its head, Larry Persily. He says it’s too early to predict exactly what would be cut. The office has staff in Washington and Anchorage.
It does have money left over from past savings to the tune of about $2 million, but Persily says he’s concerned running through that money to plug the basic budget would leave the office without any safety net and would give federal appropriators a false sense of how much money is needed to run the office.
The funding for the gas line coordinator’s office is part of a massive $1 trillion omnibus spending bill House Republicans unveiled just before midnight Wednesday. It would fund the government through 2012. Democrats in the Senate have not yet signed off on the package. But there’s pressure to pass it and avoid a government shutdown this weekend – right now the government is only funded through tomorrow.
Potential Norton Sound Health Aides Strike May Result In Job Loss
Ben Matheson, KNOM – Nome
Community Health aides across Norton Sound learned today that they could lose their jobs if they go ahead with a strike on Monday. But Health aides in all 15 villages say the strike is still on if two supervisors are not removed from their roles.
ASD Superintendent Search Down To Two Finalists
Len Anderson, KSKA – Anchorage
The search for the next Anchorage School District superintendent is down to two finalists. Thursday, the board announced the names and described the final selection process, which includes a community forum with each candidate.
NPFMC Considers Requiring Active Participation for Crab Fishery
Stephanie Joyce, KUCB – Unalaska
Who should profit from the Bering Sea and Aleutian Islands crab fisheries?
That was the big question at the North Pacific Fishery Management Council meeting over the weekend. Answering it generated more than six hours of public testimony and resulted in a vote that split the council.
At the heart of the debate is a practice called quota leasing.
Crab fishing used to be a race. There was a set amount that could be taken, and vessels competed to get as many pounds as possible before it all ran out. Six years ago, fisheries managers switched over to a system that distributed shares of the harvest to vessel owners based on how much they had caught historically.
For many owners, the share they received wasn’t big enough to make fishing profitable. Others simply didn’t want to be part of the industry anymore. The result was a massive consolidation of the crab fleet. Two hundred and thirty boats fished Bristol Bay red king crab in 2001. This year, only 62 fished.
But many of the owners who no longer have vessels that fish for crab still own crab shares. They lease those shares to active boats in exchange for part of the profits.
Anecdotal evidence suggests that in some fisheries, like Bristol Bay, more than half of the total harvest is leased. Quota holders in that fishery charge boats up to 70 percent for the right to fish their shares.
What that potentially means is that some quota holders receive large profits from their shares, without assuming any of the risk of owning a vessel or actually catching crab.
Councilor Sam Cotten described it as ‘collecting rent’ when he asked crabber Tyler Schmeil whether the practice bothered him.
“Do you care if the people you lease your quota from are active in the fishery? Does it make any difference to you as part of your business? Or does it offend you as a matter of policy? Do you think we ought to make any changes there?”
Schmeil said it didn’t bother him. And so did crabber Brian Hayworth, who also testified.
“To hear that owners of the boats are sitting on beaches in tropical locations, receiving checks that most of us can only dream of, doesn’t really phase me. Good for them. They were truly the ones who took the financial risk of owning their boats, dealing with crews, dealing with insurance companies, before the IFQ [Individual Fishing Quota] program. And most of these guys pioneered the industry.”
Other fishermen and some Councilors felt very differently about who should benefit.
Tom Suryan is skipper of the Bristol Mariner. He testified that high lease rates take money out of crewmember’s pockets.
“We know traditionally where we started before rationalization, there’s tremendous data to show that. We know where we are now. And we also know there is a trend downward over time, especially as more and more crab is leased and there are royalties assigned to that. It seems to be coming out of the crew share.”
Councilor Dan Hull said he didn’t see any incentive for quota holders to ever sell their shares and let new people into the industry if they could just keep collecting returns.
“The only reason that a corporation might sell, as far as I can see, is if the revenues earned from that quota would be less than what they could earn by investing it in something else.”
As it stands, data on leasing and how it actually affects crew pay and quota turnover is scarce.
A motion introduced by Fish and Game Commissioner Cora Campbell asks for more analysis of the issues. The motion, which passed by one vote, calls for the council to consider an active participation requirement for the fisheries and commissions a study that examines lease rate caps, crew compensation and quota sales.
The Council is expected to take up the issue again sometime next year.
ACMP Initiative Sponsors Frustrated By Delays
Casey Kelly, KTOO – Juneau
Sponsors of a citizens’ initiative to re-establish the Alaska Coastal Management Program are frustrated by the Parnell Administration’s apparent foot dragging.
The state still hasn’t given initiative backers the pamphlets they need to begin collecting signatures. The Division of Elections is awaiting cost estimates from the Lieutenant Governor’s Office and the Office of Management and Budget.
Initiative co-sponsor, Kodiak Island Borough Mayor Jerome Selby says it shouldn’t take this long to figure out how much it will cost to run a program that just closed down in July.
“Seems like every opportunity to delay that they take that opportunity,” Selby says. “And it reduces our amount of time to be able to collect the signatures, and give the people in the state of Alaska the chance to have a voice in an important program.”
Selby says sponsors were initially led to believe the booklets would be available last week. The latest delay comes after Lieutenant Governor Mead Treadwell took the full 60 days to review the initiative application.
Treadwell’s Deputy Chief of Staff Barbara Propes says the cost estimate has taken longer than expected due to the Office of Management and Budget preparing the Governor’s 2013 spending plans, released today (Thursday). She also says the coastal management program outlined in the initiative is more complex than the one that shut down earlier this year.
“We’re looking at the changes and that’s what the department heads were told to do and need to do by law,” says Propes. “To see where and if there were any changes, and to make sure that we have dollars assigned. And that’s basically, pretty routine – I mean, we got it from Law, we sent it to OMB, they’re looking at it, we’re looking to make sure we have all the costs covered and then we’ll get it to print.”
Propes says her best guess is that the final cost report will be headed to Division of Elections “in the next two days.”
Sponsors are hoping to collect about 26-thousand signatures by the start of the legislative session on January 17th. That would guarantee the initiative a spot on the fall 2012 statewide ballot, and give lawmakers an opportunity to enact substantially similar legislation instead. Selby says the group has signature gatherers mobilized in every district in the state. But he says backers hadn’t planned on doing much gathering the week before Christmas.
The coastal management program served as a one-stop federal and state permitting agency for developers hoping to build along Alaska’s coastline. But it also gave local communities an opportunity for input on the projects. It closed after lawmakers and the Parnell Administration failed to reach a deal to keep it open.
Dupre Back For Second Solo Denali Attempt
Dan Bross, KUAC – Fairbanks
Lonnie Dupre is back in Alaska for a second attempt at climbing Denali solo in the month of January. As KUAC’s Dan Bross reports, a Russian team got climbers to the summit of Denali in January 1998, but no solo expedition has ever succeeded in scaling the peak in the coldest darkest part of winter.
The Great Christmas Tree Challenge is Underway in Bristol Bay
Mike Mason, KDLG – Dillingham
The local college campus in Bristol Bay is asking area residents for a little piece of their Christmas tree.