Risks vs. rewards in campaign against coalition over taxes

The central issue of the 2012 state legislative elections is the proposed oil tax cut, and whether Gov. Sean Parnell, and the oil industry, can get the majority they need in the Alaska State Senate to enact the change.

In order to get there they have to dump the coalition of Republicans and Democrats that have led the Senate for the past two years. Over the last six years, there have been coalition leaderships in the Senate for past three Legislatures.

Dumping the coalition means campaigning against coalition Republican and Democratic senators, and supporting their opponents. Regardless of who wins, this leaves deep political wounds unlikely to heal quickly.

The question is, can the governor and industry do it?

The primary won’t show us much, although we have three major Republican primary contests that could have an impact.

We also have two open Senate seats with no incumbents. One is the sprawling District D that stretches from Fairbanks to Valdez, and also into the upper Matanuska Valley. This Republican primary race is between former Commissioner of Labor Click Bishop, former state Sen. Ralph Seekins, and David Eastman, from the Matanuska Valley end of the district.

Indications are that Click Bishop has made this a horse race, raising more contributed dollars than Seekins, but Seekins has ramped up his campaign coffers with $60,000 of his own money.

The Democrat who will face the GOP primary winner is Anne Sudkamp of Fairbanks.

Look for Seekins to unleash a final days media blitz accusing Bishop of being too close to labor.

The other open Senate seat is in Anchorage midtown, where the winner of a Republican primary race between School Board Member Don Smith and Republican Clint Hess will oppose Rep. Berta Gardner, a Democrat.

This district contains much of Gardner’s former House District, which makes her the favorite in this race.

We also have a critical Republican primary in the Mat-Su Valley between coalition member Sen. Linda Menard and her challenger Mike Dunleavy. There is no Democrat in this race, so the primary will decide the seat.

There is another contested Republican primary in West Anchorage where the incumbent is Democratic Sen. Hollis French, a major target of the oil industry.

In this district the Republicans recruited former Assemblyman Bob Bell, but also in this primary is attorney Liz Vazquez, who has almost equaled Bell in money raising.

However, it is the General Election in November that will create the head count that will make a difference, with two key Senate races in Fairbanks and three in Anchorage. All the candidates in these General Election races are good campaigners, and all should be able to raise the minimum money to be competitive.

Possible outcomes are we end up with roughly the same Senate coalition members, a new coalition of different composition, or a Republican party-line organization. The worst scenario for the governor and the Republican Party in the primaries would be if Bishop beats Seekins and Menard survives in the Wasilla race.

Basically this would not cast the die, but would give the coalition side a boost in confidence.

The petroleum industry wants the tax cut, and so does Parnell, but Republicans and particularly the conservative Tea Party and the Ron Paul-supporting Republicans are more focused on issues of party organization.

Risk vs. reward on tax cuts

As the campaign heats up in the post-primary in September and October the governor and industry will make their argument for the tax cut, arguing it will lower costs and will make new development more economic. However, the tax cut has some political downsides, too, one being that whatever the reduction is, the same figure equals the loss of revenue to the state budget.

Critics of the tax cut will argue that the cut, or at least the governor’s original proposal, comes with no guarantees of new development, nor is it possible to determine what development the companies would do anyway without the incentive.

Another problem is that even if the tax cut increases development, any benefit is “time impacted,” taking years to produce additional revenue. Conversely if taxes are reduced that impact is immediate, and exacerbated if oil prices slide.

There is also a campaign that follows the elections.

Seats at the table

This is Senate organization, and there is a world of difference and distance between this process and the process and politics of campaigns. This process where the players in the campaign aren’t invited to the private party of organization.

The process of organization is who gets what positions in the leadership, such as seats on the powerful Finance committees or chairs of other key committees.

For members of the Legislature, as well as their communities and constituencies, organization is the most important action of any new Legislature. Lawmakers, of course, would prefer to organize within their party structure, but the bottom line is that it’s first community and constituencies they represent, not a party

We also need to remember that while political parties are traditional, they are actually private associations, not public organizations. When the choice is between party and political clout, partisan loyalty fades.

What Parnell and the GOP want

What Parnell and Republican Party activists want this year is a Republican majority organized with the party. This would which assure they can get the oil tax cut bill to the Senate floor. However, this may not prove an easy task, given the current tensions between the governor and the Senate, and Senate and the House, not to mention the strains left by what may be ugly election.

If a body tries to run on a thin margin this usually requires a rigid majority discipline. This rigidity robs even majority members of independence, and tends to freeze minority members out of the process as if they weren’t even elected.

Our Senate ran on narrow splits throughout the late 1970s, 1980s, and into the early 1990s, with two 10-10 splits and three 11-9 splits until, in 1992, the Senate tried to run on a one-vote margin with a 10-10 split. The result was ugly and polarizing.

The irony of our current situation is that other than the oil tax issue and coastal zone management, the current coalition members of the Senate have a pretty good business and commerce track record.

Among other things, in these three Legislatures, Senate Finance Co-chair Bert Stedman, R-Sitka, aggressively pushed a substantial capital projects agenda, which is credited by many for keeping the recession from migrating to Alaska.

However, the governor and Senate have clashed on many issues since Parnell took office, over things like Parnell’s positions and decisions on energy issues, federal stimulus projects, and health care for children. Many felt he was courting Tea Party leaders outside of the state instead of trying to work with the Legislature.

Races to watch

If the governor and the Republican Party want to change the Senate makeup one obstacle in their way is that all key leaders of the Senate have safe, or mostly safe, seats. This includes Senate President Gary Stevens, R-Kodiak; Majority Leader Kevin Meyers, R-Anchorage; Rules Chair Johnny Ellis, D-Anchorage; and Senate Finance Co-chairs Stedman and Lyman Hoffman, D-Bethel. The tally of safe Senate coalition seats comes to nine.

Other coalition seats among the nine considered safe are those held by Sen. Donny Olson, D-Nome; Sen. Dennis Egan, D-Juneau, who is not required to run; Sen. Lesil McGuire, R-Anchorage, and Sen. Tom Wagoner, R-North Kenai. McGuire and Wagoner both face challengers, but they are favored to win.

One member of the coalition facing strong Republican primary opposition is Sen. Linda Menard, R-Wasilla, who is being challenged by Mike Dunleavy, a member of the Mat-Su School Board. However, the race remains competitive. Dunleavy has raised $60,959 to Menard $48,267 (as of 30-day reports).

Another primary race to watch is in West Anchorage, between Republicans Bob Bell and Liz Vazquez, with the winner facing Democrat Hollis French in November. If money is an indicator, the Bell-Vazquez race has also turned competitive. Bell has raised $62,912, and Vazquez $57,705. The governor and industry have targeted this race, or rather targeted Sen. Hollis French, the Democrat incumbent.

However, French has already raised a surprisingly large campaign war chest of $103,245.

A closely watched general election Senate race is in Fairbanks between Democrat Sen. Joe Paskvan, a member of the coalition, and former state senator Pete Kelly, a Republican. The two will face each other in the general election. Paskvan so far has raised $20,189, while Kelly has raised $26,435. Both are long-time Fairbanks residents coming from families with long local connections.

Also in Fairbanks, Democrat Sen. Joe Thomas, a coalition member, faces Republican Senate Minority Leader Sen. John Coghill in November, who was a part of the Republican minority in Senate. These two incumbents were redistricted into the same district. Thomas has raised $46,108, and Coghill $27,775. Coghill has long local family connections – his father, Jack Coghill, is a former Lt. Governor and was a member of the Constitutional Convention. Thomas is a longtime local resident and has a long association with organized labor in Fairbanks.

In Anchorage there are three coalition Senators, all Democrats, in heavy General Election traffic. In East Anchorage, Democratic Sen. Bill Wielechowski will face former State Rep. Bob Roses, the Republican, in the general election. Wielechowski is a prime target because he has maintained a high media profile critical of the oil industry. Roses has raised $58,003, while Wielechoski has raised $55,961.

The third Anchorage Senate race to watch is that of Democratic Sen. Bettye Davis, a veteran of the Anchorage School Board, the state House, as well as the Senate. She faces a primary challenge from Democrat and former Rep. Harry Crawford.

The primary winner will face Rep. Anna Fairclough, a Republican from Eagle River. Davis has raised $35,426, and Crawford $10,742. Fairclough has raised $87,269.

All three of these Senate districts were subject to considerable revision in redistricting, increasing the weight of Republicans in their districts. Republicans had control of redistricting so all five of the Democratic coalition members got “gerrymandered” — legal but politics at its extreme.

It is always possible some of the Republicans in the current nine coalition members in seats considered safe could say “no” to joining a continuing coalition, but this would likely require a significant majority increase. However, if they face being sent to the “backbench,” or punished, then why would they not opt for the coalition?

GOP has edge

So what’s the sum total of all this? Viewed broadly, the general circumstances of the election favors Republicans. They have advantage of this being a presidential election year; they have a greater percentage of heavier party registration compared with Democrats (though most Alaskans are independents) and a higher percentage of super-voters.

The money also favors Republicans, with the industry support groups financing pro-tax cut Senators. In addition, they also had control of redistricting and arguably did a job this year in redrawing lines to hurt Democrats.

This being said, the coalition may well survive because while the oil tax is the issue, the election is really about “persons.” If these individuals maximize their individuality with the public, it can top partisanship in the general election.

Most of the coalition Democrats that are under fire are good campaigners, appear to be making the minimum raising money threshold and know the issues in question well. Further, Parnell says he will campaign against coalition members. We are uncertain of his intent but having said what he has said, we would expect Democratic Senators to challenge Parnell to come out of his corner in the public debate.

This is what can create the environment where coalition members can win, but the chemistry could go the other way, too.

The softer members in the coalition could hold with the coalition or they could cut and run to salvage what they can in a new Senate organization.

There is also risk here for the governor, who could get “oiled” in this fight and hamper his ability to work with the new Legislature.