Gov. Sarah Palin is returning to the Alaska political scene to find it dramatically different than when she left it in August to campaign for the vice presidency.
When Palin was picked by Sen. John McCain as his running mate, oil prices were off their historic highs, but still twice what they are today.
Combined with unusual partisanship during the national campaign not seen in Palin's two years as governor, that could present challenges for Palin in the remaining two years of her term as governor.
When Palin comes to Juneau during the next legislative session, she may find a Legislature far less willing to work with her than she'd hoped.
"I'll still work with her, but I'll never trust her again," said Rep. Beth Kerttula, D-Juneau, in the waning days of the bitter presidential campaign.
Kerttula leads the minority Democrats in the House of Representatives.
Palin declined comment for this story.
These should have been good times for Palin. She won big victories in the last legislative session on oil taxes and progress toward a natural gas pipeline, bringing together some Republicans and most Democrats to challenge the power of the oil industry.
Senate President Lyda Green, R-Wasilla, with whom she'd feuded over things as small as the start time of the annual State of the State address to the Legislature and who should control the natural gas pipeline, chose not to continue fighting the popular governor and not run for re-election. A Palin ally from Wasilla will replace Green.
If the announced legislative leadership lineups hold up through final vote counts and jockeying for positions of power, Palin may find she doesn't like who she's got to deal with.
New House Speaker Mike Chenault, R-Nikiski, is an advocate of the state's major oil producers who disagreed with Palin on major issues last session. He also publicly backed legislative investigator Stephen Branchflower's attempts to subpoena Palin staff members as part of the Troopergate investigation.
Several Palin critics will play important roles in the Republican leadership as well, including House Judiciary Committee Chairman Jay Ramras, R-Fairbanks, who backed the subpoenas as well.
Some Palin allies in the House, such as Rep. Bob Lynn, have positions of power as well, but few do in the Senate.
Palin's Senate allies appear to be facing another session frozen out of power as Palin critics have aligned with the 20-member body's 10 Democrats to control the Senate.
New Senate President Gary Stevens, R-Kodiak, aims to have a better relationship than did his predecessor.
Stevens said his goal will be to "try to reestablish rapport with the Governor's Office and attempt to turn over a new leaf with that relationship," he said.
Stevens relations with Palin are likely to be good, but the other two Republicans he brought into the coalition may not be so.
Sen. Charlie Huggins, R-Wasilla, is a friend of Green's and clashed with Palin on oil and natural gas issues, even before voting in September to subpoena her staff members.
And Sen. Bert Stedman, R-Sitka, will return as co-chairman of the powerful Senate Finance Committee. He was unhappy last session when he and other legislators were unable to get Palin to specify how big the budget was. She then said the budget they passed was too big, and vetoed part of it.
"If she'd told us what projects she objected to, we'd have taken them out," he said.
Palin's strategy let her claim that she had cut the budget, he said. That became useful to Palin in her campaign for vice president when she claimed to have challenged those with her own party.
Palin's big victories came when legislative Democrats allied with pro-Palin Republicans to help push through a common agenda.
That relationship with Democrats may have been strained during Palin's national campaign, legislators said.
Palin broke her pledge to cooperate with the Troopergate investigation, and then campaign representatives, including former gubernatorial Press Secretary Meghan Stapleton, attacked legislators leading the bipartisan investigation as biased.
"What they did to (Senator) Hollis French was shameful," Kerttula said.
Rep. Mike Doogan, D-Anchorage, told readers of his newsletter that he didn't know whether Palin would be more interested in running for higher office or governing Alaska.
"If she brings former campaign attack dog Meghan Stapleton onto the payroll, Palin is more interested in running than governing," he said.
Doogan said that would exacerbate Palin's problems with the Legislature, which he said were "many and serious."
A Hays Research Group poll released Nov. 2 found that 37 percent of Alaskans said their opinion of Palin had gone down since she became a vice-presidential candidate.
That could mean that legislators, afraid to challenge the popular governor in her first two years in office, will be willing to do so now.
When Palin left Alaska, oil prices were down from highs that had topped $140 a barrel, but at the time she was named a candidate prices were still twice what they were last week.
In Palin's first two years as governor the question facing her and the Legislature was how much of the money flowing in to spend, and how much to save.
The Legislature did save a great deal of the surplus, but spent freely as well.
Questions about school funding fairness for urban and rural schools were solved by giving both more money, and almost every legislator was able to bring home new capital projects for their district.
The current fiscal year's budget needs oil to average $71 a barrel to break even, said David Teal, Legislative Finance director.
"The price of a barrel of oil now hovers at that point where it may not sustain our present level of spending," Elton said.
Stedman said that it is unlikely that this year's budget would not balance because of the amount of revenue above that amount that has already been received, along with last year's surplus.
"We have amassed a substantial savings account, in fact it is piled up quite high," he said.
If oil prices stay below the state's break-even number, some of that surplus may have to be used to balance the budget. Stedman said he was reluctant to do that before it was absolutely necessary, but legislators generally agree it will be needed before natural gas revenues begin coming in.
"The idea here is to extend the life of that savings as long as possible," he said.
New partisan animosity may mean that the next Legislature cannot replicate the deals of the last two years. Kerttula's House Democrats allied with a small group of pro-Palin Republicans who bucked their leadership and revamped oil taxes and created a pipeline deal.
In the Senate, the pro-Palin faction, led by Sen. Gene Therriault, R-North Pole, is again outside the formal power structure.
Some of the Senate Democrats who proved to be allies over the last two years have spent the last two months being attacked by Palin as part of her vice presidential campaign.
That informal group of Democrats and pro-Palin legislators passed a new oil tax that enabled the state to reap big profits from high oil prices. That, in turn, enabled the Legislature to spend freely with both the huge capital budget and $1,200 checks to most Alaskans on top of record-high Alaska Permanent Fund dividend checks.
It will now be up to Palin and legislators who have recently been at each other's throats to see if they can resurrect some of those relationships.
Contact reporter Pat Forgey at firstname.lastname@example.org.
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