With Congress defeating a plan to drill for oil in the Arctic National Wildlife Refuge and removing earmarks for two projects criticized as "bridges to nowhere," Gov. Frank Murkowski used his State of the State address Tuesday night to express his frustration.
Eagerness to reach a contract with North Slope oil producers to build a $20 billion natural gas pipeline was another theme of the governor's speech. He revealed the state is tying a new oil-tax system to negotiations.
His speech also fueled speculation about whether he will seek re-election.
"It sounds like he's running again," said Rep. Beth Kerttula, D-Juneau.
House Majority Leader John Coghill, R-North Pole, also noticed that Murkowski referred a few times to a "first term" during the speech.
"That was a hint," Coghill said.
Legislators said on Monday, the first day of a four-month session, a pipeline contract, oil-tax reform and debate over funding bridges near Ketchikan and Anchorage will be the most talked-about issues this session.
Murkowski said the nation's view of Alaska is "sorely distorted" and he called on the state Legislature to support funds for a public relations campaign in the new year.
"I believe we must develop a very thorough and professional national education campaign to accurately portray Alaska," said Murkowski, adding that this is urgent while President George W. Bush, a supporter of ANWR, remains in office.
Murkowski blamed failures in securing natural resources in Alaska last year on "misled special interest extremists," delegations from Washington and California, and the federal government.
If the governor wants to change Alaska's image at the national level, "Calling people extremists isn't going to get us there," Kerttula said.
She said Alaska's image has suffered because its most prominent faces - in the governor's office and in Congress - have been angry ones.
Calling our present oil tax system "antiquated," Murkowski said his plan would guarantee Alaskans get a reasonable share of revenue when oil prices are high.
Under the current oil tax scheme, also known as the Economic Limit Factor, or ELF, producers will pay taxes on one barrel out of every five within 15 years as production declines, Murkowski said.
Murkowski's plan, which he dubbed "Our Covenant for Alaska," would give companies incentives for exploration and development within the state.
Democrats said they were gratified by Murkowski's proposals for oil tax reform and education funding.
"I think he's listened to what we've said," said Kerttula, echoing other Democrats who stumped for oil tax reform in 2005.
Democrats were unsuccessful in their bid for oil reform in the last session. The Republican majority provided only one hearing on Democratic legislators' proposals to change Alaska's oil-tax structure.
Republican and Democratic legislators both said they would have to look carefully at the details of Murkowski's newest idea for oil tax reform - a net profits tax.
They noted that Murkowski hasn't offered a full description of his tax proposal yet.
Though the governor suggested in his speech that the oil-tax proposal would be included in a gas line contract, legislators said they may be legally constrained from approving it that way.
"If he tries to tie it (to the contract), we're not going to let it happen," Coghill said. "That means a separate piece of legislation has to travel."
Other priorities in Murkowski's agenda will be funding a second phase of a feasibility study to extend the Alaska Railroad through Canada and increasing education funding for grades K-12 by $90 million.
The governor will give a State of the Budget address on Thursday evening to explain how he proposes to pay for his priorities.
Andrew Petty can be reached at firstname.lastname@example.org and Elizabeth Bluemink at email@example.com.