My Turn: ANWR: Quick partial solution to fiscal gap

Posted: Sunday, November 17, 2002

It wasn't hard to predict a landslide for Republicans in Alaska's Nov. 5 election. From June until mid-October, Republican registration was 4-1 greater than Democrat. The strong pro-development message of Republican candidates from Gov.-elect Frank Murkowski on down helped.

There should be no problem with the new Republican-led Legislature cooperating with the new Republican governor. The lawmakers have organized with Lisa Murkowski, daughter of Sen. Frank and Nancy Murkowski, as House majority leader. The majority leader in the state Senate is Ben Stevens, son of Alaska's other U.S. senator, Ted Stevens.

Alaska benefits from the Republicans taking over both houses of Congress. Sen. Ted Stevens becomes chairman of the Senate Appropriations Committee. His seniority also makes him Senate president pro tempore, with even more power.

Alaska's Congressman, Don Young, retains chairmanship of the House Transportation Committee, which allocates money (approved by Senate Appropriations) for roads. Roads were Gov.-elect Murkowski's big campaign issue. The House once passed an energy bill including oil exploration on the coastal plain of the Arctic National Wildlife Refuge. It will again.

There may be some strong environmentalists in the Senate still opposed to opening ANWR, but they may not be so vociferous starting in January. Not if a senator wants to gain a little time on the floor before C-Span cameras, or needs a few million dollars for home highways. The Alaskans won't get everything their way. And Stevens and Young won't threaten anyone. They don't have to. Those people weren't elected because they are dumb.

What ANWR means is a quick - at least partial - solution to Alaska's fiscal gap. Under terms of the Alaska Statehood Act, Alaska is to receive 90 percent of the lease fees from federal land in Alaska. That was reduced to 50 percent in the National Petroleum Reserve and only 27 percent in offshore leases. But 90 percent, 50 percent or 27 percent, that is money for the state if ANWR is opened with new energy legislation. It is even more money if oil is found in the volumes some companies believe is there.

It won't be easy. The national environmental organizations and their supporters in Alaska are not going away. Also, the new governor wants to build roads and other projects but the national average for completing an environmental impact statement is five years. The average time for completing a project is 13 years. Congressman Young and the Bush administration are proposing "environmental streamlining" bills with the next highway legislation.

Alaskans responded to the promise of no new taxes and no tapping their Permanent Funds dividends, but both issues should come before the lawmakers, not to increase revenue but for fairness and to assure the amount of the dividends grows and doesn't swing wildly with the stock market.

The Permanent Fund trustees have recommended that the Permanent Fund be converted to an endowment. That means instead of the dividend being based on the average earnings of the previous five years, they be based on the five-year average value of the total fund. Next year, the dividend will be based on very poor earnings in the past three years, which means the size of the dividend drops dramatically.

Under the proposal by the trustees, 5 percent of the average value of the total fund over the previous five years would be withdrawn each year. There would be enough for respectable dividends and some could be used for general government, maybe by putting it in the Constitutional Budget Reserve fund where it takes a three-quarter vote of the Legislature to spend it. The fund earns 8-10 percent a year so that leaves a good chunk above 5 percent to inflation-proof the fund, increasing its value and the size of the next dividend.

In 1998 the Legislature exempted cruise lines from paying corporate income tax on their cruise ship operations. They pay on their shore-based operations but only pay a small head tax to Juneau, Haines and Yakutat. The tax exemption was designed to make Alaska coal and oil more competitive. The cruise lines jumped aboard the exemption. Is it fair to other Alaska corporations? Maybe a state head tax is the answer if they don't like the income tax.

Williams is retired publisher of the Ketchikan Daily News and a former member of the University of Alaska Board of Regents.

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