Senate Republican Minority Caucus Reacts to Indictment
Charges Reflect Badly on Institution

Juneau — The Senate Republican Minority Caucus expressed disappointment at the news today that a sitting legislator has been indicted on federal charges of bribery and conspiracy in the ongoing public corruption investigation surrounding the 2006 PPT and SGDA Natural Gas Pipeline debate.

“The news today of the indictment of a sitting Alaska State Senator is extremely disturbing. This latest development adds to the complexity the Legislature faces to regain the public’s trust and confidence as we forge ahead in making one of the most important public policy decisions in the State’s history,” said Senate Minority Leader Gene Therriault, R-North Pole.

Recognizing that during the 2008 legislative session deliberations would again take place over a proposal for a Natural Gas Pipeline, the Republican Minority Senators sent a private letter to Sen. John Cowdery in December. The letter again expressed grave concern over his continued leadership position in the Senate. All five Minority members urged Sen. Cowdery to resign his Senate seat prior to the January session in the interest of protecting the integrity of the Legislative Branch and the 32,000 constituents of Senate District O.

As discomforting as today’s development is, members of the Senate Republican Minority firmly believe that the ongoing federal investigation and jury trials will help to reinforce that no person is above the law. We believe that through this process the public’s trust will be restored with a Legislature that all Alaskans can and will be proud of.

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Senate Republican Caucus  Highlight on Success
“Making a Difference”

Juneau – The five members of the Senate Republican Caucus commented today on their role during the 25th Legislative Session and highlighted policy areas where their interaction made a difference.

“We focused on five significant areas where we believed we could make a difference in the process,” Sen. Gene Therriault, R-North Pole, said.  “Although the majority in our political system has control of the political levers, the minority tries to ensure that the majority’s power is used correctly, fairly, and with the best interests of the entire state in mind.  The minority’s role is to use its voice to highlight problems, when necessary, and work cooperatively on solutions to them.”

With that in mind, the Senate Republican Caucus focused on five key issues:  1) Restoring credibility to a legislature damaged by recent criminal convictions, 2) ensuring adequate and dependable education funding, 3) saving state oil revenue surplus, 4) developing a long-term fiscal policy, and 5) securing energy cost relief.

Restoring Credibility  In December of 2007 the Senate Republican Caucus urged the Senate leadership to make changes in key leadership positions in light of the ongoing public corruption investigation.

“We appreciate the Senate leadership replacing the chair of the powerful Rules Committee,” Sen. Fred Dyson, R-Eagle River, said.  “Although a small step, it was a positive move in the direction of restoring public trust.”

Education Funding   A long time advocate for fair and reliable education funding, Sen. Gary Wilken, R-Fairbanks, called attention to an oversight that involved HB 273, publicized as the bill that increased student funding $100 per student.  Wilken discovered that HB 273 removed previously funded school grants, with the effect that the $100 increase to the student BSA was a mere $11.58 in the first year.  Wilken offered an amendment on the Senate floor that would increase funding, but the amendment was rejected by the Senate coalition.

Although the Senate coalition refused to fix the problem before HB 273 passed, they eventually agreed to a temporary fix that would provide an additional $20 million in the form of energy relief grants to the school districts.

“I’m pleased that they responded to the information that I provided and made good on the promises made early on in the session to educators,” Wilken said.

Saving Surplus  The Senate Republican Caucus has always advocated that the legislature control spending in an attempt to increase savings.  During this session, the Senate Republican Caucus kept up the call for savings.  On March 19, in a press release distributed statewide, the Senate Republican Caucus publically challenged the Senate to save an additional $3.6 billion.

“At that time the State Department of Revenue had projected FY 2008 revenues to exceed $8.5 billion,” Therriault said.  “Saving a total of $7 billion seemed reasonable.  The Legislative Finance Division assured us that this amount was justifiable if the operating and capital budgets stayed reasonably contained, or even reduced from the amount spent last year.”

The Senate Republican Caucus tried to increase savings one last time when the state’s FY 2009 operating budget was on the Senate floor.  Therriault offered an amendment to set aside an additional $1.9 billion of the projected oil tax revenue.  The amendment was rejected by the Senate coalition.

“Although my amendment was voted down, we were pleased that our continued pressure paid off in the end,” Therriault said. “By April 2, the Senate had set aside a total of $5 billion dollars.”

Long Term Fiscal Policy  Sen. Dyson and his colleagues are proponents of the state developing a long-term fiscal policy that would guide future legislators and encourage more disciplined spending and savings.  Last year Wilken and Dyson both introduced bills to that end:  SB 25 and SB 134.

“We hoped to get these bills on the table to encourage debate and to put many minds to the task of developing a plan,” Dyson said.  “That’s the benefit of the committee process.”

Although the bills got little attention in committee, the Senate Republican Caucus kept up the pressure throughout 2007 and 2008.

Eventually the Senate passed HB 125, Budget Planning & Long-range Fiscal Plan, which incorporated some of the contents of Dyson’s SB 25.

“Although the expectations set forth in the bill are vague, which might cause the governor confusion about what to submit each year to the legislature, this was a positive step forward,” Dyson said.

Energy Cost Relief  Recognizing that the soaring cost of oil would heavily burden Alaska citizens while at the same time fill state coffers with record breaking revenues, Wagoner and Therriault pre-filed SB 217.  After initial criticism the bill was changed to provide a $750 per year credit to every Alaska resident’s electric bill.

Instead of discussing options for immediate energy cost relief, the Senate appropriated funds to expand an existing program that provides weatherization grants to low income homeowners, a long-term approach to the problem.

“Weatherizing homes is good for lowering fuel consumption and will reduce the future cost to homeowners, but we haven’t done anything to deal with costs suffered by homeowners this winter,” Therriault said. “Constituents want energy relief now.”

“It’s shameful,” Wilken said during a floor debate.  “We’ve got $13 billion sitting in a coffee can and we can’t help people across the state who are hurting.  We have nine days left to do something.  If we don’t do something while we are here, shame on us.”

That same day on the Senate floor Wagoner offered to remove his name from the bill if doing so would inspire the co-chair of the Finance Committee to hear the bill.

“My bill could provide relief to Alaskans now by lowering electric bills $750 in this coming year,” Wagoner argued.  “The way the bill is set up, it could assist about 90 percent of all Alaskans.”

Shortly after the Republican Caucus members’ impassioned floor speeches, the legislature appropriated $10 million into the capital budget for an energy assistance program that targets energy needs of some Alaskans.

“I’m glad that the Senate coalition reached a little deeper to find funds for energy relief for a few,” Wagoner said, “but this is one of the Senate’s biggest failures this year.  There are many middle-class Alaskans also feeling the pinch that could have used some help.  My bill would have provided that help and also set up an energy council to look at how to address energy needs and distribution in Alaska long term.”

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Senate Republican Caucus urges Senate Coalition to Address Energy Needs Now

Juneau – Today the Senate Republican Caucus urged their colleagues in the Senate to address energy relief for Alaskans now.  One possible solution, SB 217, sits in the Senate Finance Committee.  The legislation would provide a direct reduction to citizens’ electric bills by about $750 a year.

SB 217, introduced at the beginning of this session by Sen. Tom Wagoner, R – Kenai, and co-sponsored by Sen. Gene Therriault, R – North Pole, has sat in the Senate Finance Committee since January 16.

“It’s shameful,” Sen. Gary Wilken, R – Fairbanks, said.  “We’ve got $13 billion sitting in a coffee can and we can’t even help people across the state who are hurting.  We have nine days left to do something.  If we don’t do something while we are here, shame on us.

“We have ways to do it and we have the money,” Wilken argued.  “We’ve got the Low Income Home Energy Assistance Program already set up that we could fund to provide additional relief to the needy, or there is Senator Wagoner’s bill.  We have the means, we have the knowledge, and we have programs in place that we could fund to help.  Why wouldn’t we give people a hand?”

During debate on the floor Sen. Wagoner even offered to remove his name from the bill, arguing that if his minority status was causing the bill to be held in committee, he would be happy to let a member of the Senate majority, made up of both Democrats and Republicans, take authorship in order for the bill to move.

“We have energy costs in Alaska all year around,” Wagoner said.  “This bill could provide relief to Alaskans now by lowering electric bills $750 in this coming year.  The way the bill is set up, it could take care of about 90% of all Alaskans.”

Alaskan residents without an electric meter would be able to apply for the same benefit from the Department of Commerce, Community & Economic Development.

“The sad irony,” Wagoner pointed out, “is that the state is getting rich with the high price of oil, but our people are being hit hard by those same prices.  The windfall we have been busy spending and saving is the very windfall that’s creating the burden on Alaskans.

“While we’re here in the capitol building enjoying the problem of what to do with the surplus, people on fixed incomes, people in Bush Alaska, in urban areas, in Southeast, all over the state, have to decide whether to pay for their medications, their food, or their energy bills.”  Wagoner said.

During the floor debate some members of the Senate majority highlighted other bills passed and under consideration that address some long-term energy issues.

“The weatherization bill the Senate recently passed is a good package,” Therriault agreed, “but it doesn’t address the immediate need.  Winterizing homes is good for lowering fuel consumption and will reduce the cost to home owners, but we haven’t done anything to deal with costs suffered by home owners now, this winter, or next year.  It would take a number of years to realize the benefits of winterization.  We’re talking about some kind of relief now.”

The relief afforded under SB 217, also called the Alaska Power Cost Reduction Program, would take affect when oil prices reach the level where the state’s ACES tax progressivity is triggered, about $60 per barrel, and stays at that level for at least 12 consecutive months.

SB 217 also sets up a commission that would be tasked with preparing an energy plan to address residential, municipal, and rural community energy delivery and needs in the years to come.

Senate Majority Declines Republican Caucus’ Challenge to Save $2.6 Billion of Alaska’s Windfall

Juneau – Sen. Gene Therriault, R-North Pole introduced an amendment on the Senate floor yesterday during the debate on the state’s FY 09 operating budget that would have bolstered savings and paid down debt by $2.6 billion.

“Today the Legislature faces record breaking surpluses,” Sen. Therriault said. “Rather than spend this new flood of money we challenged the Senate to save funds for future generations to use for future state budgets. Regrettably they refused the challenge saying it would be fiscally irresponsible.”

Although we are currently experiencing surplus revenues we continue to be advised by economists that we should be saving more in anticipation of deficits in the near future.

The Senate voted against the amendment by a vote of 12 nays to 6 yeas. Sen. Fred Dyson, R – Eagle River, Sen. Tom Wagoner, R- Kenai, Sen. Con Bunde, R – Anchorage and Sen. Gary Wilken, R – Fairbanks, co-sponsored the amendment.

Therriault’s amendment to the operating budget would have set aside $1.9 billion of the projected FY 09 oil tax revenue and deposit it into the constitutional budget reserve, a long term state savings account. This fund has been in existence for thirteen years. Over the last even years the Legislature has borrowed $5.2 billion dollars from the CBR. The Legislature is constitutionally required to repay those funds. The CBR earns considerably more in interest than other Alaska short-term savings accounts.

Therriault introduced a separate amendment that would have appropriated $700 million of the current year’s surplus to pay down the state’s obligation to the Teachers’ Retirement System. By making this deposit the state would have realized an additional savings of $46 million dollars. The Senate voted against this amendment 13 nays to 5 yeas.

“The debt to the CBR is constitutionally unavoidable and must be paid down.” Sen. Con Bunde, R-Anchorage, said. “Most Alaskans realize that in times of surplus it is wise to pay down debt.”

Senate Republican Caucus Reacts to News of Record Breaking FY 2008 Oil Revenues – Challenges Legislature to Increase Savings for Alaska’s Future

Juneau – Today the Senate Republican Caucus reacted to the Alaska Department of Revenue’s news that the General Purpose Unrestricted Revenue for FY 2008 is projected to be a record breaking $8.5 Million.

“This year’s projected revenue is almost 30% higher than last year,” Sen. Gary Wilken, R – Fairbanks, said. “With this dramatic increase in revenue comes an equally dramatic duty to exercise self-restraint in spending and to save for future generations of Alaskans.”

Repeatedly during the 25th Legislature, the Senate Republican Caucus has called for the creation of a long term fiscal plan that includes a commitment to saving. This year in particular, they stepped up the call.

“During the ACES debate last fall, we proposed that a mechanism be put into place to prompt future legislatures to set aside sizeable portions of the increase in oil tax revenue under the new law – particularly revenue generated by the progressivity component of the tax,” Sen. Gene Therriault, R- North Pole, said.

“While the $3.6 billion set aside in SB 256 sounds good, it is a fraction of what we should deposit into Alaska’s savings accounts in a banner year like this one,” Wilken said. “With Friday’s revenue forecast, the legislature has the financial ability to set aside far more money than $3.6 billion.”

The Senate Republican Caucus is challenging the legislature to set aside an additional $3.6 billion of surplus as savings or through a combination of deposits to savings and debt pay down.

“The Legislative Finance Division assures us that this amount is justifiable if the operating and capital budgets stay reasonably contained, or even reduced from the amount spent last year,” Therriault said.

The Senate Republican Caucus’ position is bolstered by a recent Institute of Social and Economic Research opinion. Dr. Goldsmith, an economist and director of ISER, suggests that Alaska should redouble its efforts to save money now and reduce the risk that future generations will be forced to meet Alaska’s operating and capital needs by imposing income tax, sales tax and dipping into the permanent fund earnings reserve account.

“Dr. Goldsmith suggests that we view the increase in revenues over the past few years not as a trend that will continue, but as a windfall,” Sen. Tom Wagoner, R- Kenai, said. “The best strategy for dealing with a windfall is to put as much as possible in the bank and spread the spending out over a long period of time. It’s prudent, it protects future generations. Let’s step up to the plate and do what’s right.”

“With the unpredictability of our oil and gas revenue stream, the revenues we enjoy now might not be enjoyed by future generations,” Sen. Con Bunde, R- Anchorage, said. “It’s not a question of whether we will face sizeable deficits in the future, it’s a question of when; now is the time to save.”

“If we discover in future years that this windfall is a permanent and predictable increase in income, then we can modify the savings plan,” Therriault said. “But for now it would be robbing from future Alaskan’s to spend our non-renewable resource dollars without a plan. A better public policy is to agree that the petroleum wealth of the state should be shared equitably among today’s and tomorrow’s Alaskans.”

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