Senate Republican Caucus Responds to Governor’s Goals in Supplemental Budget

Juneau – Members of the Senate Republican Caucus today expressed their support for many of the goals contained within Governor Sean Parnell’s FY2010 supplemental budget released today while recognizing room for increased savings and encouraging a more long-term view of state budget surpluses.

Among other spending requests, the supplemental budget bill would finish repaying the Constitutional Budget Reserve, forward-fund K-12 education for FY2011, and, in a separate bill, ask for an additional $100 million for deferred maintenance projects.

“While I recognize the importance of addressing some of the pressing needs outlined in the Governor’s supplemental budget, I strongly encourage that any spending proposals based on using a budget surplus, in this or any other year, look at that ’surplus’ in the context of a three- or five-year spending plan,” said Sen. Con Bunde, R-Anchorage. “I think the question of whether or not it is truly a ‘surplus’ – if it is sandwiched between two or four years of deficit or even flat spending – is one we should be asking ourselves more often.”

Sen. Fred Dyson, R-Eagle River, said he is concerned about the rising cost of formula-driven spending. “I recognize that programs such as Medicaid are expanding in numbers of users, and that is reflected in the $44 million requested for formula programs. I note that the Governor did not request funding for an increase in eligibility for Denali KidCare because the bill to do so has not passed. While he and I disagree on expanding the program from 175 to 200 percent of poverty level, he may be amenable to making such an increase contingent on having a budget surplus.”

Sen. Tom Wagoner, R-Kenai, said he would support the deferred maintenance bill and expects the projects included in it to be in the public’s interest. “It makes a lot of sense to get funding approved for projects that can go to contract this spring. At the same time, the Governor needs to take another look at his $75 million request for a new crime lab, which we don’t need. That project should be on the deferred maintenance list, and the existing crime lab should be remodeled and expanded at a much lower cost, not the current $75 million projected for a new lab.”

Sen. John Coghill, R-North Pole, agreed that the Governor’s first priority should be saving surplus dollars. “I support the Governor’s request to return the $402 million to the CBR that we have borrowed over the lean years. That is what the CBR is there for. I also support any efforts to park more of the surplus in the statutory budget reserve. While that reserve is accessible with only a majority vote, it shows good faith and statesmanship on the part of legislators and the Governor to set the surplus aside. We anticipate more lean years for Alaska, with the Trans Alaska Pipeline dropping in through-put by six percent or more a year. Alaska’s leaders have done a good job in the past of saving for future generations – through the Permanent Fund, the CBR, and other set-asides – and I think we need to continue with that attitude.”

Therriault and Wagoner to Attend Legislative Energy Horizon Institute

Juneau – Sen. Gene Therriault, R-North Pole, and Sen. Tom Wagoner, R-Kenai, have been selected among 32 legislators from both the US and Canada to attend a comprehensive series of energy forums, the Legislative Energy Horizon Institute, which will examine the full spectrum of energy generation, infrastructure, regulation and government oversight. The objective of the Institute, which is sponsored in part by the University of Idaho with the support of the US Department of Energy, is to examine the complexity and policy questions surrounding current North American energy generation and distribution issues.

“It is an honor to be selected to attend the Energy Horizon Institute, which has the goal to keep a core group of policy makers up to date on the multitude of energy issues states will be wrestling with over the coming years,” Therriault said. “Energy, whether it is oil and gas, coal, electricity, or biomass, is vital to Alaska’s future, as an exporter of energy as well as for our own consumers. I look forward to putting the knowledge I gain at the Institute to work for Alaskans.”

“Maintaining a continuity of knowledgeable members in a legislative body, who are intimately familiar with the complex details you find with all energy issues, is really crucial to crafting productive, appropriate energy policy,” Wagoner said. “This is important to protecting the interests of Alaskans in these energy debates.”

Attendance at all sessions is mandatory for participants, who will receive a University of Idaho certificate at the conclusion of the program.  The first session of the program will be held in Boise, ID from July 12-16, and will include overviews of electric generation and transmission, natural gas, petroleum and strategic leadership. The program curriculum extends over a period of 18 months and will include seminar training as well as monthly “webinars” and other training materials.

“By accepting the invitation to participate in the Legislative Energy Horizon Institute, I look forward to not only bringing information back to Alaska, but also taking information about Alaska’s role in the global energy markets for members from other jurisdictions to consider” said Therriault.

Senate Republicans: TC Alaska/ExxonMobil Agreement
Positive For Alaska and Gas Pipeline

NORTH POLE – The Senate Republican Caucus provided the following comments on today’s announcement by TC Alaska and ExxonMobil regarding their agreement on the Alaska North Slope Gas Pipeline project.

“Certainly today’s announcement is very positive for Alaska and the country.  While it appears that this agreement honors the terms of AGIA while advancing an Alaska Gasline project, we will be very interested to look more closely at all the details, to be assured that the state’s “must haves” in AGIA will be protected.  I appreciate that their announcement continues to acknowledge the possibility of an LNG option that includes a liquefaction facility in Valdez,” said Sen. Gene Therriault, R – North Pole.

While several key aspects of the announcement are worthy of highlighting, such as TC-Alaska remaining the licensee under AGIA, and the open season timeline continues on schedule, Therriault noted, “This agreement marks a serious breakthrough for the gas pipeline project in that ExxonMobil’s partnering acknowledges that TransCanada’s ability to advance a project using the Northern Pipeline Act (NPA) is a significant advantage compared to the National Energy Board (NEB) process in Canada.  For years legislators were told by some that there was no advantage to using the NPA rather than the standard approval process of the NEB.”

“Throughout this process we always predicted that TransCanada and the companies would come together and negotiate an agreement.  This announcement today between TC-Alaska and Exxon goes a long way towards a commitment to see this project through,” said Sen. Tom Wagoner, R-Kenai.

“I am hopeful that today’s announcement will quiet those who appear to have been hoping for failure of the AGIA process,” said Sen. Con Bunde, R-Anchorage.

“We look forward to the continued development of solid construction cost data which the state and other interested parties will need as we approach an open season in 2010,” said Sen. Fred Dyson, R-Eagle River. “Construction of the pipeline is still not assured; however, this agreement is a real step forward.”

Republican Caucus: Senate’s Pared-Down Capital Budget Missing Important Projects
JUNEAU – Even though the Senate today passed a $1.8 billion capital budget that more realistically reflects the uncertain future revenue stream the state now faces, it leaves out some important projects that are key to securing and increasing state revenues.

“While it is good to see a reduction in spending, I think the priorities of the Senate majority are misplaced,” said Sen. Gene Therriault, R-North Pole. “It reminds me of the fateful end of Bad, Bad LeRoy Brown in the old Jim Croce song, who ‘looked like a jigsaw puzzle with a couple of pieces gone’. Now, we haven’t exactly been in a knife fight over this capital budget, but the missing pieces are crucial ones.

“For example, it is distressing that the Senate majority chose not to fund some of the Governor’s requests for much-needed upgrades to the Dalton Highway. The Department of Transportation and Public Facilities has been asking to have these projects funded for several years now, in anticipation of construction of the gas pipeline. Federal stimulus dollars that should have gone into priority transportation projects on Alaska’s major arterial highways were instead diverted to “B” list projects in individual Senators’ districts.”

Sen. Tom Wagoner, R-Kenai, said, “I was appalled, not just at the disparity in the distribution of projects, but that the majority absolutely and inexplicably refused to vote for Sen. Dyson’s green amendment to encourage the use of propane and compressed natural gas in the buses funded by the bill.”

Therriault said two other very important missing pieces are funding for the Governor’s effort on the bullet or spur line and the second phase of a major oil and gas reservoir study currently being undertaken by the Department of Natural Resources.

“These are critically important projects for getting natural gas to the people of Alaska,” Therriault said. “To deliberately leave them out of the budget is simply unconscionable. We are hopeful that the House will include the funds in their version of the bill.”

Senate Republican Caucus: Governor Right to Question Federal Stimulus Dollars that Would Result in Huge Long-Term Operating Budget Commitments

JUNEAU – In light of Governor Sarah Palin’s announcement today that she would accept only $514 million of $930 million offered to Alaska in federal stimulus dollars, members of the Senate Republican Caucus endorsed her approach to keep the state operating budget under control.

“The Governor has said she would accept only those dollars offered for capital projects and is just saying ‘no’ to most of the funding for expansion of government programs,” said Sen. Gene Therriault, R-North Pole. “I think this is a responsible course to take. She may be criticized for refusing more than $400 million in available funding, but by doing so, we will avoid an unsustainable expansion of programs on into the future. I appreciate that she is going to work with the Legislature to review those projects and dollars she questioned, to see if there is a balance we can reach between the strings that are attached and what is in the best interest of Alaskans.”

“This offer from the Congress and the Obama administration is a little bit like having way too much to drink,” said Sen. Con Bunde, R-Anchorage. “A good time may be had by all, but the hangover the next day, and the consequences of what you did while you were drunk, may be with you for a long, long time.”

“The Governor made it clear that the direction she is taking with the federal stimulus dollars only pertains to the State of Alaska, and does not impact any funding for which municipalities, nonprofits, tribal organizations, and other community entities may otherwise be eligible,” said Sen. Tom Wagoner, R-Kenai. “I think part of the job of the Legislature, along with the administration, is to help those local entities identify available grants that are funded through the stimulus package, and apply for those dollars if they do not create an on-going commitment that the local organization cannot sustain.”

“The U.S. economy is going through an especially rough patch, so we have to be very careful how we apply this stimulus,” said Sen. Fred Dyson, R-Eagle River. “In addition, we hope the public will understand the strings that are attached to some of these carrots. For example, one program would get us $28 million, but requires us to adopt a statewide international building code. While a one-size-fits-all code may work in smaller states, the climate and geography in Alaska is so varied that local governments need flexibility in their areas. Through our legislative process, we will determine if we want to take on this requirement.”

# # #