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Chenault updates Chamber about session so far

Posted: March 2, 2012 - 12:13am

Speaker of the Alaska House of Representatives Mike Chenault impressed the need for citizen involvement in the oil tax debate and the struggle to bring down energy prices for all Alaskans during his appearance at the Juneau Chamber of Commerce lunch on Thursday.

Chenault, R-Nikiski, assured Chamber members he would try keep his speech focused on positive topics.

However, with the high price of energy in Alaska and the uncertain future of Alaska’s oil tax revenues, Chenault had to bring it down to earth from time to time.

Getting the audience up to speed on the second session of the 27th Alaska State Legislature, Chenault predicted the state operating budget should cross over to the Senate in two weeks or so. He also predicted the capital budget to be among the last pieces of legislation passed this year.

Next week, several of the speaker’s colleagues will travel to Washington, D.C. for an energy summit.

Energy, Chenault said, is expensive everywhere in Alaska. The misconception is only rural areas have high heating and electrical costs, he said. The current price of oil is good for state coffers, Chenault said, but terrible for municipalities, small and large.

“People are hurting,” Chenault said. He said he’s found areas where people are paying more for energy than for house payments.

To combat oppressive energy prices, Chenault recommended investments in energy infrastructure — whether they be wind turbines or a natural gas pipeline.

“We ought to be putting money in energy projects that are good for the state,” Chenault said. “And find a good way to fund long-term energy projects.”

For Southeast Alaska’s energy needs, Chenault recommended electrical interties.

“Because it makes sense,” Chenault said.

Chenault said the state is working to address Alaskans’ energy needs.

“Last year, the Legislature stepped up to the plate and funded energy projects all over Alaska,” Chenault said.

But, he said lawmakers should not just throw money at the problem.

“Make sure the money we invest in energy projects actually puts power in the grid somewhere,” Chenault said.

Energy prices also affect education, he said.

Chenault said he does not believe raising the state’s Base Student Allocation necessarily means more money in the classroom, he said. Fuel burned to move buses and heat schools eats up the funds allocated to classrooms. Addressing core problems like energy consumption could open up school budgets to other expenditures.

Don’t expect Alaska’s new legislative districts to change much, Chenault said.

“The court could throw the whole thing out,” Chenault said. “But I don’t see any fix being a big change.”

Chenault also touched on oil and gas taxes, again a hot topic at the Capitol this session.

“If we don’t have a vibrant oil industry all of Alaska suffers,” he said. “That’s from the pre-kindergarten kids’ school programs to the senior citizens, that money won’t be available,” Chenault said.

Legislators have taken all due time to study the oil and gas tax system in Alaska, Chenault said. The body has worked on reform for the past three years.

“We sure didn’t study it whenever we enacted it,” Chenault said. ACES passed in 3 1/2 weeks, he said.

“I certainly supported a change in oil tax back in 2007, just not to the extent we had,” he said.

Alaska’s oil production is decreasing and with it, its tax revenue. And though oil prices are high now, around $125 per barrel, if they drop, look out, he said.

“If oil prices fall to something like $80 a barrel,” Chenault said, “the state of Alaska is going to be hemorrhaging, the funds we call a surplus today will be gone in a short period of time.“

“Unfortunately there is only one other pocket I see,” Chenault said, “that’s yours.”

If the Senate’s tax bill incentivizes investment in the state of Alaska, “I think you’ll see the House pass it.” he said. “If it does not, I don’t know if we’ll pass it or not even take it up, wait until next year.”

After his speech, Chenault answered questions.

Rachael Petro, CEO of the Alaska State Chamber of Commerce, asked what Alaskans can to help get good oil-tax legislation passed.

Chenault avoided giving exact courses of action.

“Some days I don’t even agree with myself,” Chenault quipped.

However, he did emphasize the need for citizen involvement in the legislative process.

“They need to hear your voice. If they don’t hear your voice they listen to the voices they hear,” Chenault said.

Chenault has lived in Nikiski since 1967. He has been Speaker of the House since 2009.

Next week’s lunch speaker is scheduled to be Rep. Mia Costello, R-Anchorage.

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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