Opinion

COMMENTARY: Railbelt power utilities entering new era of cooperation

For 75 years, Matanuska Electric Association has provided our members with electricity as a platform for economic growth and community vitality. This year we have a new milestone to celebrate: May 1 marked one full year of producing, transmitting and distributing our own power thanks to MEA’s new Eklutna Generation Station power plant. For MEA, moving from a small distribution-only utility to a full-scale, integrated utility so that it was seamless to our members took significant teamwork, dedication and hard work from our staff and partners. I am proud of what we accomplished together. Similar to MEA, over the past decade, Chugach, Homer and ML&P all decided it was cheaper to build new efficient power plants than continue generating power from the older, inefficient power plants that used to provide power to almost a third of what we call “the Railbelt” stretching 500 miles from Homer to Fairbanks. This new generation allows us to produce power more efficiently. That means every kilowatt-hour produced burns fewer fossil fuels. When the cost of fuel is 50 percent of your annual utility expenses, the ability to reduce that by 30 percent pencils out pretty quickly for our members. The new generation mix also means the Railbelt has more options to serve our consumers. That flexibility has been the key driver of a new power market among the Railbelt utilities that is already achieving operational savings for our members.  MEA’s unique power plant design with 10 smaller engines provides a new product to the Railbelt market — small increments of power. When it is cheaper to buy our power rather than starting up a less efficient, larger generator, other utilities have bought power from MEA. This results in direct savings to our members so much so that we reduced the Cost of Power component of our rates for the last two quarters. It also results in savings to the purchasing utility’s members. As ML&P’s new Plant 2A comes online later this year, we look forward to the potential for cheaper baseload power, which will add even more opportunity for savings to the market. Over the past year, the collaboration has grown into an impressive number of power transactions — each one resulting in cost savings for our members. It has also ushered in a new era of transparency and trust and provides a mix of hope and certainty for future collaboration. I’ve worked in the Alaska utility industry for over 15 years and am fortunate enough to have been handed the reins of MEA just a few months ago. From what I’ve seen first-hand, the Railbelt is moving to a new era of cooperation. Yes, like any family we’ve had our share of disagreements in the past, but what most folks don’t get to see is that we have also been working together with our sleeves rolled up to keep the Railbelt electrical system humming for the better part of statehood with pretty impressive reliability numbers. The improvement in technology, efficiency, and partnerships between the Railbelt utilities in just one year is simply remarkable and unexpected as the entrance of new players shifted the economics. The Railbelt we were trying to fix a year ago is not the Railbelt that exists today — that old model of utilities working independently or against each other is now largely a product of a bygone era. I have been pleasantly surprised by the shift. More progress is on the way. The utilities have been working together over the past year to analyze other potential solutions. The right solution will be determined by the economics and the timing must reflect the economic reality of our state. Benefits are clear, but the question everyone is asking is “are the costs of the solution worth the benefits?” For example, the initial estimate of $900 million in transmission infrastructure upgrades is over-exaggerated and fiscally irresponsible. It is essential to determine a more realistic number that balances the need and value of the upgrades with the capacity of our consumers who will ultimately pay the cost. We want solutions that will benefit Railbelt consumers for decades to come so it is important to take the time to check the facts and do the numbers to ensure one group isn’t harmed to benefit another and any unintended consequences are mitigated. Some of the best minds I’ve met in this state are currently sitting around the table with each other trying to figure this out and I have no doubt they’ll do it. While I wish the annual benefits were going to be anywhere close to the $50 million to $150 million dollars that was initially stated, we’re optimistic there are more savings out there for our members. We look forward to working closely with our colleagues to evolve the Railbelt into something that can meet the needs of Alaska well into the future. Tony Izzo is the general manager of Matanuska Electric Association.  

COMMENTARY: Government often hurts when it tries to help

Three recent stories regarding three government agencies — the IRS, the Transportation Security Administration, and the Department of Veterans Affairs  — show why we should oppose big government for practical, as well as philosophical, reasons. In recent months, many Americans have missed their flights because of longer-than-usual TSA security lines. In typical DC fashion, the TSA claims the delays are because of budget cuts, even though Congress regularly increases the TSA’s funding! The TSA is also blaming the delays on the fact that few Americans have signed up for its “PreCheck” program. Under PreCheck, the TSA considers excusing some Americans from some of the screening process. Those who wish to be considered must first submit personal information to the TSA and pay a fee. Only a bureaucrat would think Americans would be eager to give the TSA more information and money on the chance that they may be approved for PreCheck. The TSA is much better at harassing airline passengers than at providing security. TSA agents regularly fail to catch weapons hidden by federal agents testing the screening process. Sadly, Congress will likely reward the TSA’s failures with continued funding increases. Rewarding the TSA’s incompetence shouldn’t surprise us since the TSA owes its existence to the failure of government to protect airline passengers on 9/11. If Congress truly wanted to protect airline passengers, it would shut down the TSA and let airlines determine how best to protect their passengers. Private businesses have a greater incentive than government bureaucrats to protect their customers and their property without stripping their customers of their dignity. The head of the VA also made headlines last week when he said it is unfair to judge the VA by how long veterans have to wait for medical care, since no one judges Disney World by how long people have to wait in line. Perhaps he is unaware that no one has ever died because he waited too long to go on an amusement park ride. For years socialized medicine supporters pointed to the VA as proof that a government bureaucracy could deliver quality health care. The stories of veterans being denied care or receiving substandard care demolish those claims. If Congress truly wanted to ensure that veterans receive quality health care, it would stop forcing veterans to seek health care from a federal bureaucracy. Instead, government would give veterans healthcare vouchers or health savings accounts and allow them to manage their own health care. Congress should also dramatically reduce the costs of providing veterans care by ending our militaristic foreign policy. Another story last week highlights the one thing government does do well: violate our rights. The House Judiciary Committee held a hearing on impeaching IRS Commissioner John Koskinen over his role in the IRS’s persecution of conservative organizations. Those who value liberty and constitutional government should support impeach-ing Koskinen. However, truly protecting Americans from IRS tyranny requires eliminat-ing the income tax. Despite the claims of some, a flat tax system would still require a federal bureaucracy to ensure Americans are accurately reporting their income. Since the income tax is one of the foundations of the welfare-warfare state, it is folly to think we can eliminate the income tax without first dramatically reducing the size and scope of government. The TSA, VA, and IRS are just three examples of how government cannot effectively provide any good or service except authoritarianism. Individuals acting in the free market are more than capable of providing for their own needs, including the need to protect themselves, their families, and their property, if the government gets out of the way. Copyright 2016 Ron Paul, distributed by Cagle Cartoons newspaper syndicate. Ron Paul is a former Congressman and Presidential candidate. He can be reached at the RonPaulInstitute.org.

EDITORIAL: Lack of leadership on display from Gov, Legislature

When, exactly, should concerns about Alaska’s fiscal and economic future give way to fear? When the general fund fiscal shortfall hits $5 billion each year? When the failure of the Legislature to adopt a sustainable budget or address the fiscal situation reduces Alaska’s bond rating to junk status? Most Alaskans increasingly identify with the statement of the Apollo 13 astronauts: “Houston, we have a problem.” But instead of being stranded deep in space with a failing return vehicle, Alaskans face declining government revenue, a budget perceived as unsustainable and an economy poised to tank. The average citizen knows our state has a significant fiscal problem. Based on their conduct, the same cannot be said about the Legislature. Alaska, we have a problem. But you wouldn’t know it from the lack of concerted action on the part of many of our state politicians. The lack of genuine adult leadership in the Legislature has been painfully exposed by the failure to meaningfully address Alaska’s looming fiscal crisis. What was once “a problem” is now a crisis. The Legislature’s failure to adopt a budget for Alaska within 90 days (or even 120 days), reform gargantuan oil tax giveaways and pass meaningful taxation measures that would put Alaska on a sustainable fiscal footing is to blame. Instead of dealing with the obvious threat to Alaska’s fiscal integrity and the possibility of causing catastrophic economic harm, the Legislature has fooled around with legislation pertaining to pot, daylight saving time, dallied with sex education matters and engaged in meaningless matters suggesting that Alaska has the right to overturn federal law. With the notable exception of passing a comprehensive criminal justice reform package, the Legislature has failed to conduct the business of our state in a responsible manner. To us, it seems clear that our Legislature is missing a sufficient number of adults and is failing to deal with the obvious issue. Gov. Bill Walker and his administration don’t get a total pass here either. While Walker assembled a disparate package of measures that would have put Alaska’s public finances on a sustainable path, if enacted, the administration’s proposal was largely a lash up of ideas that were never integrated into an ascertainable package diligently presented to the Legislature or the public. The governor’s worthwhile proposals were scattered like seeds on untilled ground. Left untended, most of his ideas have languished or died. Has Alaska really come to the point where our elected officials are unable to act in concert for the greater good? Is our Legislature so beholden to narrow interests that we cannot achieve a balanced and sustainable budget? Is the administration incapable of advancing and then working with the Legislature to provide for a sound fiscal future? Right now, these questions are unresolved, much as the issue of getting the astronauts on the Apollo 13 mission home was when that crisis hit. Whether or not we have enough adult leadership in the Legislature and administration to adequately address our fiscal problem is very much an open question. Based on what we’ve seen so far, Alaska’s fiscal future doesn’t appear to be headed to an ending where everyone makes it home safely. After that sad event comes to pass, perhaps then, and only then, will the voters in our state elect enough adults to operate our government in a mature and measured manner. Empire Readers’ Council editorials are written by members Joe Geldhof, Abby Lowell, Tom Rutecki and Alex Wertheimer.

AJOC EDITORIAL: Money for nothing and the checks for free

I want my, I want my, I want my PFD. With apologies to Dire Straits, the demagogues in the Democrat ranks are back in their comfort zone after dismantling oil and gas tax credits they once championed under ACES by winning over enough squishes among a Republican-led Majority that now exists in name only. Alaska has a new House majority full of Garas and Guttenbergs that are apparently capable of coming up with an endless series of convoluted matrices of tax levers creeping ever upward but who can’t or won’t read the daily production report from the Department of Revenue. Most of the public obviously doesn’t know it — and Gov. Bill Walker, his commissioners and his fellow Democrats sure aren’t going to point it out — but North Slope production increased this fiscal year for the first time since 2002. With the fiscal year nearing its end June 30, production will be in the range of 520,000 barrels per day compared to 501,500 barrels per day in 2015. Not only is that a 4 percent increase in the midst of a historic price collapse over the last 18 months, but it is only 2 percent less than the 531,100 barrels per day produced in fiscal year 2014 when the average price was $107 per barrel instead of the current $42. In the last three years of ACES while the price averaged $105 per barrel, production declined by 11 percent from 600,000 barrels per day to 531,600 barrels per day. In the first three years of Senate Bill 21, production has declined 2 percent while the price has averaged $74 in the same period. To hear Walker and Sen. Bill Wielechowski tell it, though, we didn’t get anything out of Senate Bill 21 that passed in 2013. One thing we didn’t get was the 5 percent annual decline that took place in six years of ACES. Had the 5 percent ACES decline continued, production would have averaged 455,000 barrels per day this year instead of the current 520,000. That’s an additional 64,500 barrels per day, or 23.5 million barrels for the year that all generate a 12.5 percent to 16.6 percent royalty. In calendar year 2015, the state collected $715.3 million in royalty payments (plus 5.1 million barrels of royalty oil) and for fiscal year 2016 will collect some $1.1 billion in petroleum income from an industry that is losing billions. It is patently dishonest for Democrats and Walker (but I repeat myself) to continually assert that the state is losing money from oil tax credits when the state is taking in more than a billion dollars this fiscal year. Wielechowski was at it on Twitter claiming everyone in Alaska is on the hook for $1,000 apiece to fund the oil tax credits already earned by companies and owed by the state. Never mind that nearly every penny in unrestricted general fund revenue, in savings accounts, and the Permanent Fund was generated by the North Slope producers who can never pay enough as far as the Democrats and the new Republican members of their cohort are concerned. It’s funny, but Wielechowski did not have a problem in fiscal year 2012 when the credits under ACES totaled $716 million and the funds appropriated for the Permanent Fund Dividend were $564 million. In fiscal year 2013, ACES credits totaled $918 million and the PFD appropriation was $576 million. In two years that’s a half-billion more in credits than PFD payments. Where were the Democrats then? They were defending the credits as evidence ACES was working while ignoring  the fact production declined by 7 percent or more in three of the previous four fiscal years. Walker won’t stop his mantra that the dividend checks are going to go away without adopting his plan to tap the Permanent Fund Earnings Reserve, but that’s exactly what’s going to happen to the PFD if the Legislature elects to fund it according to his proposal with royalty income from a resource destined to decline more rapidly under their assault against the industry they demand pays the state’s way. The message the House and Walker just delivered to the oil and gas industry is that the state is going to raise taxes now and then even further as soon as prices reach a level that would allow the companies to begin recouping the billions they’ve lost in the last two years and the billions they’ve invested since SB 21 passed. No sane company would attempt to increase production or investment in such an environment. That won’t matter to the anti-oil Democrats in the Legislature or the Governor’s Mansion. They’ll just keep singing the same tune. That ain’t working; that’s the way you do it. You get the money for nothing and the checks for free. I want my, I want my, I want my PFD.   Andrew Jensen can be reached at [email protected]  

COMMENTARY: Long overdue energy bill a federal law Alaska can welcome

In late April, the U.S. Senate overwhelmingly approved a major energy bill for the first time in almost a decade. The Energy Policy Modernization Act is a broad rewrite of our increasingly outdated policies in this area. As you might expect, it reflects extensive input from Alaskans, and contains dozens of provisions that will provide lasting benefits for our state. The first thing to say about this bill is: it’s about time. The last time the Senate passed a significant energy bill was in 2007. Since then, new technologies have emerged as seen by the fracking revolution that has brought dramatic changes to our energy landscape. But at the same time, the relentless federal regulatory state has overtaken Congressional policy and direction. And many of our most pressing challenges, from aging infrastructure to high costs in rural regions, have gone largely unaddressed. Because our policies have not changed, we are in a situation where both opportunities and needs are being ignored. That is often the case right here in Alaska — where many of our residents still struggle to obtain affordable energy even while the federal government actively seeks to deny our most promising options for resource production.  My response, when I became Chairman of the Senate Energy and Natural Resources Committee last year, was to draft legislation that would bring our federal energy policies up to speed. I committed to a bipartisan approach that followed the almost forgotten process of regular order. And I kept Alaska front and center, from start to finish. The result? A broad, bipartisan bill that will increase production in Alaska, help our residents pay less for energy, and ensure continued access to our public lands. For starters, my bill boosts mineral development — without weakening environmental protections — by prioritizing resource assessments and tackling permitting reform. It streamlines the regulatory process for hydropower, which can provide renewable electricity to dozens more communities across our state. It provides routing flexibility for the Alaska gasline, to eliminate a federal hurdle that could have stood in the way of that must-build project. And it requires timely decisions for LNG export applications, to prevent unnecessary bureaucratic delays, which will help Alaska market our stranded gas. My energy bill is not only about policy reform. It also prioritizes innovation and efficiency, for everything from microgrids to commercial buildings. It reauthorizes programs that provide vital funding to Alaska, including the Weatherization Assistance Program, the State Energy Program, and the Department of Energy’s Office of Indian Energy. It promotes the development of our methane hydrate, marine hydrokinetic, and geothermal resources, all of which can be significant contributors to our supply. And it allows states like Alaska to apply for federal energy loan guarantees, which will help us deploy new, lower-cost systems in communities across the state. Equally noteworthy is the approach we took in crafting this bill. It rejects the model of government-knows-best in favor of policies that will empower individuals and communities to take control of their energy futures. There are no top-down federal mandates within it. We similarly avoided tax increases and anything that would add to the federal deficit. It is also more than just an energy bill. The night before it passed the Senate, I offered my Sportsmen’s Act as part of a larger amendment related to lands and water policy. The Sportsmen’s Act will help ensure access to public lands for hunting, fishing, and other outdoor activities that are important to Alaskans — and I’m pleased to report that the Senate unanimously approved it. Lands administered by the Bureau of Land Management and Forest Service will now be “open unless closed.” We clamp down on their ability to shut down access to our public spaces. And we require every agency to expand and enhance sportsmen’s opportunities in federal areas. The Sportsmen’s Act will help ensure that places like Tiedeman Slough and Martin Lake Cabin remain open. And they collectively represent a big step forward to allowing long-held traditions to be passed down from generation to generation – without the federal government getting in the way. But it’s not just about keeping our public lands “open unless closed,” the sportsmen’s provisions in the energy bill included the reauthorization the North American Wetlands Conservation Act which is critical to hunters who go out for waterfowl, migratory birds, and other wildlife. The Energy Policy Modernization Act was created by listening to Alaskans. It was written with the advice and expertise of a wide range of individuals across our state. It will help us produce more energy, it will help us save energy, it will reduce local energy costs, and it will keep our lands open. In the process it will allow us to create new jobs, generate new revenues, and continue our strong contributions to the nation’s energy supply. This is a bill for Alaska — and a potential federal law that, for once, every Alaskan should welcome. Lisa Murkowski is the senior U.S. senator from Alaska and the chairman of the Senate Energy and Natural Resources Committee.  

AJOC EDITORIAL: Democrats loved credits, until they didn’t

Rep. Les Gara, D-Anchorage, and former Democrat Sen. Hollis French once boasted about spending $540 million on them in a single fiscal year. As a candidate, Gov. Bill Walker said he wanted to use them on the North Slope the way they’ve been used in Cook Inlet. Sen. Bill Wielechowski, D-Anchorage, touted them as a way for the major Slope producers to reduce their tax liability. Revenue Commissioner Randall Hoffbeck called them investments in the future. The Legislature’s consulting firm told them May 10 that eliminating them would be a “trade-off” between saving money and losing future private spending. We’re talking, of course, about oil and gas tax credits offered by the state to incentivize development in one of the most expensive and challenging places on the planet to operate. With the state in a $4.1 billion hole for the upcoming fiscal year beginning July 1, the Legislature has ground to a halt wrangling over the credit expenditures that are going to cost about $775 million no matter what changes are made going forward. Republicans who fought through elections and a referendum defending their vision for tax policy and incentives have tucked tail and run over the issue as Democrats who supported these very incentives have been allowed to bank on the public’s amnesia over their past statements and ride on their tried-and-true playbook of demagoguing the oil companies. Let’s review. In a 2010 op-ed, French and Gara wrote the following about their preferred tax policy known as ACES: “The credits reduce the tax a company owes, or, in the case of a company with no production, the credit can be sold. There is big money involved here: in fiscal year 2009 the oil industry made over $2 billion in capital investment in Alaska that resulted in $540 million of tax credits that lowered their overall tax burden.” That’s right. Gara, who all but alleges oil executives are running around knocking bread out of Oliver Twist’s mouth, was bragging about the state laying out $540 million in credits, or about as much as would have been appropriated this year had Walker not vetoed $200 million in credit appropriations last June. In 2011, Gara wrote another op-ed in which he stated that he proposed to “increase our tax credits for new exploration on the Slope, and for new processing facilities needed to put new oil in our pipeline.” Under ACES, and before Senate Bill 21 repealed its overly generous 20 percent cap-ex credit, the state paid out $918 million in credits during fiscal year 2013 while French was a leader of the Bipartisan Senate Majority. This is the law the Democrats fought to bring back in 2014 and the one they pine for to this day. Here’s what Pat Forgey of the Juneau Empire reported in 2011 from Wielechowski’s defense of ACES: “The future of the North Slope is these smaller, wildcat companies, he said. Those incentives are available for any company, and the big producers such as ConocoPhillips Co., BP plc and ExxonMobil Corp. can lower their total tax rate by spending more on exploration, he said.” You read that right. Wielechowski, who can’t finish a sentence without saying the word “giveaway” was advertising ACES credits as a way for the insidious big three producers to lower their tax obligations to the state. Walker, who started this whole “conversation” with his veto last summer, said this at a Rotary Club debate on Oct. 28, 2014: “We need to level the playing field so smaller companies can come to Alaska. It’s very expensive to do business on the North Slope. We’re fortunate to have the large companies we do have, but we need to look for ways we can reduce the costs so it’s more economic for the smaller companies to come to Alaska, create jobs, create opportunity and drill for oil. We need more wells drilled outside the legacy fields to get more oil for the pipe.” Holding diametrically opposed positions on a major policy issue within the space of a year or two is generally something the press finds newsworthy, but not many members of the media have bothered to hold Walker or Democrats accountable for their past statements — and votes — as they pound Republicans and the oil companies for supposedly trying to take away the Permanent Fund Dividend to line some fat cats’ pockets. The credits under ACES were a way for Democrats to pretend they appreciate the mammoth contributions to the state economy from the oil and gas industry by claiming they supported small companies and incentivizing exploration with credits while bagging on the easy targets of the major multi-nationals who pay virtually every government salary in Alaska including the minority members of the Legislature and Walker’s anti-oil administration. It’s no surprise politicians would cynically exploit the current fiscal state for their own gain, but it has been a useful exposure of the Democrats’ hypocrisy on the issue if anyone would bother to notice. Andrew Jensen can be reached at [email protected]  

COMMENTARY: State must decide what kind of future it wants for oil and gas

During the course of my 11 years representing the Alaska Oil and Gas Association, I have been asked many times by media, elected officials and policy makers, as well as everyday Alaskans what my predictions are for the oil and gas industry in Alaska. My standard answer, other than to say I wish I had a crystal ball, is that only one thing is for certain: oil prices will go up, and then go back down. It is, unfortunately, the one constant in this cyclical business with which Alaskans are so familiar. In spite of that reality, the last 50 years have created some unique opportunities in this state we call home. Who would have thought the once struggling territory of Alaska would finally be welcomed as the 49th state largely because of the discovery of the Swanson River field on the Kenai Peninsula? Or that an economy once fueled almost solely by commercial fishing and timber would come to rely on oil and gas as its largest economic driver? Regardless, since the time that the Alaska Oil and Gas Association has been in existence, we have experienced the glory days of huge new discoveries, first oil from the Trans-Alaska Pipeline, 2 million barrels of throughput per day, and the booming economy that came with it. Of course, we have seen the downside, too, with price plunges that put Alaskans out of work, and what some would say is too much dependence on one industry to prop up the state economy. Regardless, in the end, most Alaskans have come to appreciate and enjoy the positive impacts the oil and gas industry has brought to Alaska over the last 50 years, and most of us want to see that legacy continue for the next 50 years. What is the vision for the industry, and, by extension, the state, for the next 50 years? In tough times like this, it is easy to get mired down in the bad news. And there has been bad news in 2016, no doubt about it. An industry battered by unprecedented low oil prices has responded in ways that while expected, are no less difficult: rigs idled, projects on hold, jobs lost. Hard choices, and, yet, we still have reasons to be optimistic. One thing low oil prices cannot change is the fact that Alaska has great geology. The State’s Department of Natural Resources confirms that plenty of oil and gas remains on Alaska’s North Slope, as well as in Cook Inlet, and places like “Middle Earth”, where Native corporations like Ahtna and Doyon are exploring. One colorful oil and gas insider has even described the North Slope as “the oiliest place on earth.” With estimates for billions more barrels of oil, and massive reserves of natural gas, Alaska’s oil and gas industry can remain viable for years to come under the right conditions. What do the right conditions look like? In our opinion, we feel strongly that state leaders must better articulate their vision of what they want the industry to look like in the next five, 10, and 20-plus years. Too often over the course of the last 50 years, state leaders have lost sight of ensuring the state’s dominant industry was healthy and growing in the long run, usually in order to make some kind of immediate financial gain. When the state is strapped for cash, as it is now at low oil prices, it is always easy for leaders to look to industry for more. The problem with that approach is that a quick money grab has long-term consequences that hurt just as much if not worse: less oil production, less long-term revenues for state government, and fewer new projects and Alaskans working. It’s not a new problem for the industry in Alaska, but one that continually reappears. Our advice to those in charge is to think strategically about where they want Alaska to be in 20 years, and what kind of industry they want to see here. Is more oil moving through the Trans-Alaska Pipeline the goal? Maybe it’s a focus on more companies coming to Alaska to explore for and develop oil. Or perhaps the focus is now on the long-awaited of goal of commercializing Alaska’s vast stores of natural gas. Whatever the policy, it is wise to make clear what the objective is, and to pass laws and write regulations that support the goal.  If the aim is simply to collect more revenue, then leaders should be transparent about it, and enter into such a policy with eyes wide open about what potential long-term consequences could look like. Regardless of what policies and laws the State of Alaska enacts, one long-time truth cannot be disputed: Alaskans have for years, and still do, profess a deep and profound pride in our oil and gas industry. Those of us who have lived here for years know that no one does safe resource development better than Alaska. Truly, we all seem to understand that Alaska has been blessed not only with incredible beauty, but natural resources that are the envy of the world. Our economy will continue to evolve, but our focus on safely and responsibly developing these resources for the benefit of all Alaskans remains, and will so for the next 50 years.  

COMMENTARY: Time for president to tell truth about troops’ combat role

When the president is in open disagreement with the secretary of defense and the chairman of the Joint Chiefs of Staff on one of the most critical issues our nation faces — whether to send our sons and daughters into combat — it should be cause for significant national concern. President Obama has repeatedly told the American people that U.S. troops are not in combat in the Middle East. In 2010, he announced that “our combat mission is ending” in Iraq. He used the same words in 2014 regarding Afghanistan. More recently, he said that our mission in Syria “will not involve American combat troops fighting on foreign soil.” Yet last week in a Senate Armed Services Committee hearing, I asked Defense Secretary Ashton B. Carter and Joint Chiefs Chairman Gen. Joseph F. Dunford Jr. if our troops in the Middle East, including in Syria, are engaged in combat. Both unequivocally said yes. To our members of the military serving overseas, Carter and Dunford were stating the obvious. Indeed, recent reports in The Post and the Military Times describe up to 200 Marines at Fire Base Bell in northern Iraq firing artillery daily in support of Iraqi troops and killing Islamic State terrorists. Our soldiers serving as part of the Joint Special Operations Command in the Middle East conduct regular counterterrorism missions to kill and capture terrorists. Since 2014, our brave pilots have dropped approximately 40,000 bombs in Iraq and Syria in close-air-support missions focused on killing Islamic State members and destroying their infrastructure and supply operations. An additional 1,200 bombs have been dropped supporting the coalition fight in Afghanistan combating the Taliban. Some of our service members have been killed conducting these operations, while others have been wounded. All of this is the very definition of combat. To Carter’s credit, he said at the hearing: “These people are in combat . . . and I think that we need to say that clearly.” Apparently, the White House didn’t get the memo. This week, when asked about a Navy SEAL killed in a fierce firefight involving U.S. Special Operations forces, Kurdish commandos and Islamic State fighters, White House spokesman Josh Earnest told reporters that “the relatively small number of U.S. service members that are involved in these operations are not in combat but are in a dangerous place.” Why do Obama and his White House continue to peddle the fiction that U.S. forces are not engaged in combat? Perhaps the commander in chief is truly unaware that they are, which would be troubling indeed. More likely is that because he’s told the American people repeatedly that he will end wars and won’t send combat troops to the Middle East, the word contortions coming from the White House are part of a twisted attempt to salvage and protect the president’s legacy. But by spinning the truth for political purposes, the president is coming perilously close to leaving a legacy of dishonesty when it comes to our military involvement in the Middle East. And much more worrisome, such dishonesty comes with costs. First, it diminishes the service and sacrifice of our troops and their families. Americans serving in Iraq, Syria and Afghanistan know they’re engaged in combat operations. The commander in chief needs to acknowledge this fact and the bravery it entails, not disguise the true nature of their duty. Second, it further undermines the administration’s tenuous foreign policy credibility regarding its stated goal of degrading and destroying the Islamic State. While this is the correct goal, a series of missteps in the Middle East, including the president’s failure to enforce his own red line when it was crossed by Bashar al-Assad in Syria, have brought us to the point where our adversaries and our allies question U.S. credibility and resolve. Islamic State terrorists know that they’re in combat against U.S. forces, but when the president says otherwise, it signals a lack of conviction, making it harder to defeat these terrorists. Finally, the dishonesty about the role of our troops allows our presidential candidates to duck a tough issue. Hillary Clinton repeatedly has been allowed to say, unchallenged, that she would continue the president’s policies of not sending combat troops to Syria and Iraq. Forty-five years ago, future Secretary of State John F. Kerry, then speaking as a veteran of the Vietnam War, urged the incumbent administration to be honest about the roles our men and women in uniform were playing in Vietnam. Testifying before the Senate Foreign Relations Committee, he said, “We veterans can only look on with amazement on the fact that this country has been unable to see there is absolutely no difference between ground troops and a helicopter crew, and yet people have accepted a differentiation fed them by the administration.” The theater has changed, but Kerry’s words still resonate. For the betterment of our troops, and our country, he called for honesty then — just as we all should call for honesty now. Dan Sullivan, a Republican, represents Alaska in the U.S. Senate and is a member of the Armed Services Committee. He is a lieutenant colonel in the U.S. Marine Corps Reserve.  

AJOC EDITORIAL: Dead horses: Feds’ King Cove hypocrisy & the LIO fiasco

Sometimes a dead horse really does need another beating. On May 4, we received a fresh reminder of the federal government’s rank and callous hypocrisy regarding the emergency access road from King Cove to Cold Bay. Earlier in the week, we were treated to more of the rudderless Legislature’s trademark blend of incompetence and dysfunction that goes together like a jar of Goober Grape. Before getting to the Republican-led Legislature’s ongoing and pathetic attempts to extricate itself from the embarrassment of its Downtown Anchorage office building, up for the first whack is the U.S. Interior Department led by Sally Jewell and a new rule proposed by its Fish and Wildlife Service agency. The rule released May 4 allows for the killing of bald and golden eagles by wind farms and nearly quadruples the annual limit for killing bald eagles first proposed in 2009; it also acknowledges that human-caused mortality of golden eagles may be unsustainable because studies since 2009 indicate the population may be in decline. The new rule out for public comment would allow the killing of 4,200 bald eagles nationwide by wind farms compared to the limit of about 1,100 proposed in 2009. The limit on golden eagle kills remains zero, but the Fish and Wildlife Service knows that windmills will still be causing mortality and therefore it has come up with “compensatory mitigation” workarounds so that companies may pay some sort of fee to a conservation bank to make up for killing golden eagles. This is the same Fish and Wildlife Service that denied approval — and was upheld by Jewell — for 11 miles of one-lane road to complete a connection between King Cove and Cold Bay through the Izembek Wildlife Refuge based on hypothetical impacts on Trumpeter swans and Pacific black brant geese whose populations have no conservation concern. FWS estimates there are about 143,000 bald eagles in the U.S., with half of those in Alaska, and it believes as much as 5 percent or more of local area populations can be killed annually without impacting the species as a whole. Of the Pacific black brant geese, about 160,000 gather in Alaska annually and thanks to warmer temperatures as many as 50,000 stayed through winter in 2014 to continue feasting on abundant eelgrass in the refuge lagoons. Of the Trumpeter swans, 13,000 of the 16,000 or so in the U.S. reside in Alaska with Lower 48 populations raised mostly by eggs transplanted from here. Examples of the federal government’s arrogant abuse of discretion can be found on a daily basis, but few could be more egregious than Jewell’s heartless disregard for 1,000 mainly Alaska Natives living in King Cove while giving special treatment to a favored “green” industry such as wind power to kill thousands of eagles every year even when her own data show one of those species may be in decline. The proposed road would do no such harm, as Alaskans have a long history of building infrastructure in sensitive areas. And in any case, putting a few birds at risk cannot begin to outweigh the risks to residents with medical emergencies and the members of the U.S. Coast Guard who are called upon to rescue them. The press release from the FWS regarding the new eagle kill rule — which it describes in Orwellian fashion as “eagle management” — commits sins of omission by not including the number of eagles it will allow the wind industry to kill every year. You have to read into the 162-page proposed rule to find that information. Even more galling, though, is FWS Director Dan Ashe’s comment in the release that, “Eagles hold a revered place in our nation’s history and culture, particularly that of Native Americans.” Frankly, it is disgusting that Jewell, Ashe, et al, can pretend to be concerned about Native Americans’ feelings when it comes to eagles while coldly disregarding their feelings about access to emergency medical care. No more proof is needed that the federal government’s care for its trust responsibilities to Alaska Natives goes no further than the extent to which it aligns with its own agenda. LIO saga continues On May 2, the Legislative Council voted 12-1 to attempt to buy another office building in Anchorage for $12.5 million currently owned by Wells Fargo and rescinded its offer made just a month ago to buy the current Legislative Information Office for $32.5 million. In an ironic twist, Wells Fargo was one of the construction lenders along with Northrim on the Downtown LIO and prepared an appraisal of $44 million that was used to justify the now-voided lease being below market value at some $3.3 million per year, which means it might end up getting a double payout from this whole fiasco because those notes were eventually consolidated into a longterm loan by EverBank. The Legislature isn’t going to get away from its mess in Downtown Anchorage by moving to Midtown. The Legislature is going to get sued by the developers and their lender and based on Alaska Supreme Court precedent they’re going to have a good chance of recovering their costs at a minimum regardless of the fact the lease was voided by a Superior Court judge. This bunch in Juneau couldn’t boil water without messing it up, but then again, they can probably get a lobbyist to do it for them. A microcosm of Republican leadership’s cluelessness was Senate President Kevin Meyer’s statement about letting lobbyists for the LIO owners buy his dinner at the same time he’s getting $213 in per diem. “We could pay for our own way,” he said to the Alaska Dispatch News. “I’m just trying to think how that would work.” They sure know how to eat. They just don’t know how to pay.

COMMENTARY: Reinbold’s budget analysis omits critical information

Rep. Lora Reinbold recently wrote an editorial taking on her colleagues in the Legislature for not cutting the budget enough. Her analysis reflects a fundamental misunderstanding of the state’s budget and omits critical data to make decisions on the budget deficit. She criticizes them for focusing on “unrestricted general fund” cuts that have been fairly substantial, and not cutting “designated general funds” and “other state funds.” What do these terms mean? “Unrestricted general funds” come from resource rents and corporate income taxes. They are used to provide services available to all Alaskans. Services like State Troopers, education funding, plowing the roads, the courts, prison systems and Pioneer homes. “Designated general funds” are funds paid by Alaskans and Alaskan businesses for the specific services that they receive from government. When you buy a driver’s or business license, your fees pay for that employee working there. When a bank is audited for solvency to protect your deposits, the bank pays for that audit. When a fish plant is inspected to make sure it is not producing tainted food, they pay for that inspection. The amount that Alaskans pay for these services is huge, amounting to $877 million in 2016. When you pay for these services, you expect them to be provided. If you quit providing the service, you would also lose the revenue so you wouldn’t have done anything to address the budget deficit. The percentage of department budgets that are paid by these fees for services would surprise you. Department of Commerce: 80 percent. Department of Environmental Conservation: 80 percent. Department of Labor: over 80 percent. Fish and Game: 90 percent. In fact, almost the entire regulatory structure of the state is paid for by fees from the regulated community. Rep. Reinbold made a number of amendments on the floor attempting to reduce the fee for service budgets of these agencies, even though it would have done nothing to solve the budget crisis. Every one of these amendments was voted down by a bipartisan vote of 37 to 1, which I guess shows you that at least the rest of the Legislature understands this. “Other state funds” are contractual obligations of the state such as school bonds and other debt. The state can’t cut these without defaulting on our loans. These amount to $342 million per year which when combined with fee for service designated funds adds up to a whopping $1.3 billion per year. This is why the Legislature has had to focus on cutting unrestricted general funds which will amount to about a 20 percent reduction for this year and last. Rep. Reinbold asks: “When you talk about the budget for your household, wouldn’t you balance total expenditures against your total income?” Well not really. Consider this example: You have a regular job that provides most of your family income but you also have a side business cleaning homes after work. You also have a house payment. If you took Rep Reinbold’s approach you would say, “Well lets just cut all of our expenses for our house cleaning business.” Well… you could do that but you would also lose all the revenue. Likewise you could say “Well let’s just quit paying our house payment.” but your house would be foreclosed and you would be out on the street. The reasonable approach would be to make your spending match your revenue from your job, keep the house cleaning business and make your house payment. So yes, the state will have to make additional cuts and look for efficiencies, but we are down to core services with a few exceptions. If we only keep drawing from our savings accounts to fill the budget deficit and can’t draw from Permanent Fund earnings or institute general tax measures such as a sales or income tax, those savings accounts will be gone and we will really be up a creek without a paddle. We can’t cut the services that people are paying for. A sales or income tax would only provide a small percentage of the budget shortfall. We must turn our savings into revenue generating assets to have any chance of maintaining the core functions of government: public safety, education, transportation and health. If we don’t, these will be the first to go. Paul Fuhs is the former Mayor of Dutch Harbor and former Commissioner of Commerce and Economic Development for Gov. Wally Hickel.  

AJOC EDITORIAL: Gov’s union contract is a joke, and so is GOP response

Gov. Bill Walker has a funny way of showing that he’s looking everywhere for solutions to the state’s current $4.1 billion deficit. In addition to reducing the Permanent Fund Dividend by redirecting earnings into paying for state government, he’s proposed raising taxes on oil and gas, fishing, mining, tourism, alcohol, cigarettes, fuel, and personal income. He made a big show in January of claims he’s instituted a hiring freeze and restricted employee travel, although he couldn’t provide any estimate of how much money it would save. Meanwhile, his Department of Administration was negotiating with the labor unions that represent about 87 percent of the employees covered by collective bargaining arrangements. About 11,000 of the 14,400 or so employees covered by the current negotiations are members of the Alaska Public Employees Association and the Alaska State Employees Association. Coincidentally, both unions endorsed Walker for governor in 2014. Also coincidentally, its members are giving up next to nothing in the contracts being presented to the Legislature for approval. All together, the Administration Department estimates the current contracts tentatively agreed to will save a whopping $6.5 million in the next fiscal year from a couple furlough days per employee and a minimal contribution to the health insurance from the current 0 percent to 5 percent. To put that in perspective, $6.5 million in savings represents about 0.5 percent of total state payroll of about $1.2 billion. Zero-point-five. Out of the total deficit, $6.5 million is 0.1 percent. Zero-point-one. In the accounting world these amounts are known as rounding errors. Out of the $457 million in higher taxes proposed by Walker — which amounts to more than 10 percent of the deficit — $6.5 million is 1.4 percent. The furlough days, minimal as they are, generate even less when Administration estimates that about three-quarters of employees will cash in leave rather than take an unpaid day. What remains are escalating and generous pay increases for “merit” and what is simply known as a “step” increase of 3.25 percent every two years. The definition of merit, under the state’s current contracts, is “acceptable or better.” Under this definition, according to Administration Commissioner Sheldon Fisher, about 95 percent of employees qualify for the 3.5 percent “merit” raise for each of their first five years on the job. To be fair, the Administration has removed the cost of living allowance increases, or COLA, from the current deals. A 2.5 percent COLA for the current fiscal year totaled about $30 million, which the Legislature offset with a corresponding cut to executive branch budgets. That is difficult to count as “savings,” though, as elimination of the COLA will be more than offset by the near-automatic merit and step raises still in the contracts. It is also worth noting that the Consumer Price Index has increased by just 0.5 percent and 1.6 percent in Anchorage in 2015 and 2014, respectively, thanks largely to the collapse in oil prices that is driving the deficit. The most fantastic statement in the Department of Administration’s presentation to the House Finance Committee on March 14 was from the slide titled “Bargaining Priorities” that read “Current fiscal climate requires modest reductions.” Modest? We know Juneau is off the road system but until now it wasn’t clear that it is actually on another planet. As usual, though, the Republican-led majorities are botching their response. Rep. Craig Johnson, R-Anchorage, introduced House Bill 379 that would eliminate the merit and step increases until oil reaches $90 per barrel for a full fiscal year. It would also change the qualification for a merit increase from “acceptable” to “good.” This is in direct opposition to a legal opinion from the Legislature’s own attorneys that declared unequivocally it is outside the body’s constitutional powers to engage in collective bargaining, which Johnson’s bill clearly does with its specific requirements for a labor contract. The memo concludes that the Legislature holds the power of the purse, and can simply refuse to appropriate money to fund raises if it doesn’t approve of them. All it should take is some firm statements from legislators to the Administration Department that they will not fund raises if they’re included in a contract. Instead they are taking what appears to be an unconstitutional path to achieve what they already have the power to do by other means. It’s no wonder the majorities find themselves in their current mess. Andrew Jensen can be reached at [email protected]

COMMENTARY: 40 years after Magnuson-Stevens, not all promises kept

The Magnuson-Stevens Fishery Conservation and Management Act turned 40 last week and federal and state fishery managers marked that event with an opinion piece in the Alaska Dispatch News on April 12 extolling the successes of the Magnuson-Stevens Act and its implementation in Alaska as a “global model of sustainability.” As the authors point out, the Magnuson-Stevens Act sets up a “transparent governing process” intended to ensure that “science is behind every fishery management decision” in Alaska. Indeed, the Magnuson-Stevens Act sets up national standards ensuring that all fisheries are managed to achieve “optimum yield from each fishery” with management decisions “based on the best scientific information available,” and guided by carefully considered fishery management plans. We can all find common ground in recognizing the benefits associated with management under the Act, as well as many of the successes of the North Pacific Fishery Management Council (the council) and NOAA Fisheries in ensuring the long-term stewardship of Alaska’s fisheries. The problem is that many important fisheries have been left out of the fold of the Magnuson-Stevens Act. The Cook Inlet salmon fishery is a prime example. Every year, some 10 to 30 million salmon pass through federal waters in Cook Inlet, in route to their native streams. These are some of the largest wild salmon runs in the world, and they go largely unharvested. But the North Pacific Fishery Management Council and NOAA Fisheries plainly don’t want anything to do with Cook Inlet salmon fisheries, despite their obligation under federal law. The council never took an active role in managing the fishery, and in 2012, with approval from NOAA Fisheries, removed Cook Inlet from the council’s Fishery Management Plan, despite the objections of the commercial fishing industry. The result is that the benefits of Magnuson-Stevens Act have never come to pass in Cook Inlet. Cook Inlet does not get the benefit of “drawing on NOAA’s environmental intelligence to improve stock assessments and assess the impact of climate change on fish population.” Cook Inlet does not get to draw upon the Magnuson-Stevens Act’s “transparent governing process” or the robust “public-private management process founded under MSA.” Cook Inlet does not get to draw on the Magnuson-Stevens Act’s promises of optimum yield for each fishery, or the promise that “science is behind every fishery management decision” in Alaska. Instead, Cook Inlet is left with the Board of Fisheries. Regardless of whether you believe those who claim the Board of Fish “isn’t broken” (ADN commentary March 16, 2016) or others who believe it certainly is broken (ADN commentary March 30, 2016), no one can reasonably argue that the Board of Fisheries process can match the transparency of the council, or claim that “science is behind every fishery management decision” made by the Board of Fisheries. There should not be any real doubt, of course, why the council doesn’t want to deal with salmon management in Cook Inlet. The resource disputes between user groups are contentious and longstanding. But the need for the scientific rigor and transparency that the council can provide has never been greater. The Board of Fisheries has made no real effort to find solutions to managing Cook Inlet salmon fisheries in light of poor returns of some stocks, the identification of several “stocks of concern,” impacts from invasive species, and growing habitat problems from both urbanization and climate change. The result in recent years has been sport and commercial fishery closures and restrictions, the loss of millions of unharvested salmon, the loss of tens of millions of dollars to the regional economy and the loss of millions of dollars to the State treasury. All Cook Inlet salmon fisheries would plainly benefit from coordinating the State’s long-standing salmon management experience with the council’s transparent, science-based process. This is precisely what the Magnuson-Stevens Act contemplates. Hopefully, the sport and commercial fishermen and the coastal communities in Cook Inlet won’t have to wait another 40 years for the promises of the Magnuson-Stevens Act to be fulfilled. David Martin is the president of the United Cook Inlet Drift Association.  

AJOC EDITORIAL: Final week cramming won’t produce sustainable solutions

As legislators attempt to cram their final week with major changes to how the state pays oil credits and uses its Permanent Fund earnings while filling the budget deficit with savings accounts, they may be tempted to go home to seek reelection feeling like they did their jobs. Public polling conducted by Dittman Research for the Alaska Chamber in the last week of March suggests they won’t face a lot of citizens who’d agree. When asked whether they had a favorable opinion of various state industries including oil and gas, tourism, mining and timber, the only segment of the economy to receive a negative rating was state government with just 42 percent having a “very” or “somewhat” favorable opinion. The Legislature fared even worse, with only 33 percent having a favorable opinion. That may not make the difference in the makeup of the body next year in Juneau, as voters in Alaska aren’t much different than those around the country that routinely give Congress a sub-20 percent approval rating yet more than 85 percent of incumbents are typically reelected. “Everybody else is an idiot, but my (fill in the blank) is OK,” seems to be the sentiment, which calls to mind an expression by Alaska pioneer Clem Tillion that goes along the lines of, “Nothing will make you think worse of your neighbors than seeing who they elect to represent them.” What Alaska’s fiscal crisis has exposed is how poorly so many state government functions and programs perform. In fat budget times not many in Juneau were overly concerned with throwing money at capital projects, prisons, education and oil tax incentives. Now that they have been forced to examine all spending — and as their constituents who’ve gotten hooked on it lobby to preserve the status quo — it’s clear that oversight and accountability have been sorely lacking.  Starting with oil credits, the Legislature is missing a huge opportunity to fix the program beyond simply reducing outlays. While some tweaks to credits at low prices are not unreasonable, it is indisputable that oil companies have responded to Senate Bill 21 passed in 2013 and upheld by referendum in 2014. Daily production for this fiscal year is now forecast to be about 520,000 barrels per day compared to 500,000 barrels per day last fiscal year. That’s a real number that can’t be disputed by those legislators who criticize SB 21 to this day with the same tired talking points they’ve belched out for the last three years. Even next year, knowing BP plans to shut down some rigs at Prudhoe, the forecast is for 507,000 barrels per day. In the fall 2012 Revenue Department forecast, production in fiscal year 2017 was supposed to be only 484,000 barrels per day. The 2012 forecast was for just 8,300 barrels per day in Cook Inlet. We’re now nearly 10,000 barrels per day greater than that. One Hilcorp platform that was producing just 600 barrels per day when the company took it over is now paying $6 million per year in royalties to the state and as a producer of more than 50,000 barrels per day it is no longer eligible for many of the credits it is advocating to preserve. The Cook Inlet Recovery Act and SB 21 worked to reverse declines on both the Slope and the Inlet. They aren’t perfect, but looking at the bottom line of production, SB 21 has far outperformed ACES, which had its own issues with declining output and ballooning credit payments that were on pace to top $1 billion per year before the overly generous 20 percent capital expenditure credit was repealed under SB 21 and replaced with credits tied to barrels produced and not merely money spent. That ACES cap-ex credit would have put the state on the hook for $800 million at Point Thomson alone, which is greater than the entire proposed fiscal year 2017 appropriation for tax credits and incentives. Transparency measures have been stripped out of the current oil tax credit bills, and that’s a shame. Keeping confidential credits related to actual tax liability and production is understandable. Keeping confidential the rebates paid out to companies exploring that have no tax liability is not. A simple fix would be to set an annual appropriation amount the state is willing to invest in exploration projects. Companies would have to seek pre-approval for projects, and therefore know what they can expect in rebates, and the state would know what its outlays will be and whether a prospect is worth exploring based on input from the Natural Resources and Revenue departments. Companies have been quite willing to disclose what they expect from state rebates to secure private investor funding, so if they want the state’s help they should have to do it on the state’s terms. That should mean the public knows the projects the state is investing in. It’s impossible to defend a program you can’t explain, and House Speaker Mike Chenault couldn’t be more wrong when he says the average Alaskan doesn’t care where the money is going. The state needs companies investing and exploring at times of low prices so that when the inevitable price rebound occurs the state will be positioned to benefit. But instead it once again appears poised to chase out companies with its never-ending quest to find a “heads we win, tails you lose” tax policy that jacks up taxes at times of both high and low prices. The education lobby wants funding preserved for K-12 and the university system, but there has been precious little examination of what the state is getting for its money despite spending more per pupil than every state other than New York. The idea of defunding the Alaska Performance Scholarships in order to pay for retired teacher pensions appears backward on its face — cutting spending on the future in order to pay for promises of the past — but it has shone a light on the shortcomings of the state education system. A full 50 percent of students enrolling in the University of Alaska system need remedial education, including 20 percent of the students who receive scholarships, and three out of four students who enroll at the UA won’t graduate within six years. Neither of those numbers are acceptable, yet nothing that’s happening in Juneau is addressing the chronic problem of poor results at every level of education. Critics are harping on subsidies for the oil industry that pays the freight for virtually everything in Alaska (and is once again being called to pay more), yet few have questioned the wisdom of subsidizing unqualified students and therefore the tuition rolls of the University system. On Medicaid reform, a great irony of the bill headed for passage is that most of the savings come from more federal dollars for Tribal care. The Legislature is also quietly funding the expanded class of Medicaid recipients the majorities are currently suing the governor to overturn. For the most part, legislators are papering over problems with the apparent main goal of preserving the PFD at $1,000, an amount greater than the 2012 and 2013 payouts, which were $876 and $900, respectively, in the hopes they can return to Juneau next year. A better example of election year politics is hard to imagine than setting a minimum PFD that is actually larger than recent year payouts at a time of multi-billion-dollar deficits. If lack of leadership creates a vacuum, Stephen Hawking should be studying Juneau for its resemblance to a black hole. Andrew Jensen can be reached at [email protected]

COMMENTARY: Confidence in state govt. plunges amid budget concerns

A $4 billion spending gap isn’t the only crisis facing lawmakers and the governor this year. Elected officials are also facing a crisis of confidence. Each year the Alaska Chamber conducts a statewide poll to gauge voter perception of business and the economy. The results this year clearly show all eyes are on Juneau, and Alaskans are increasingly pessimistic that we are on the right path toward a balanced budget. Juneau, we have a problem... The state’s inability to restructure government to a sustainable level is reflected in Alaskans’ perception of the economy. Last year, most Alaskans held state government in relatively high regard, with 64 percent reporting a favorable or better opinion. The number of Alaskans with faith in state government has plummeted over 20 points in 2016. We’ve also heard increasing concern regarding the state’s money troubles impacting Alaska’s economy as a whole. In 2015, Alaskan’s were well aware that state spending had ballooned to unsustainable levels. More than half of voters polled recognized the budget was a problem; one-fifth said state spending was a crisis. But this year the number of Alaskan’s concerned about state spending is overwhelming. Voters declaring the budget as a crisis have more than doubled, climbing to 49 percent in 2016. What’s behind these big swings in public concern? Rewind to early 2015. Alaska had a new governor with tough talk on spending. Legislators were arriving in Juneau with commitments to make the difficult decisions needed to prune a $6 billion spending habit down to a sustainable level. Now — 15 months, two legislative sessions, and a bewildering collection of special session activities later — Alaskans no longer believe the state is willing to make lasting changes to spending. A universal concern When asked what the most important issue the Alaska Legislature should tackle this year, Alaskans resoundingly answered, “fix the budget.” In 2015, balancing the budget was already the most mentioned expectation for lawmakers. The issue eclipsed constants like education funding and even spending cuts; those two priorities were tied in second place. This year, however, 48 percent of Alaskans polled want the state budget deficit dealt with. The second most commonly volunteered priority is cuts to spending. Funding state services like economic diversity initiatives, and even education funding, are in the single digit percentages. These numbers illustrate a dramatic uptick in public concern. Last year, Alaskans were bullish about the economy, even while acknowledging that public spending was an item of concern. This year the number of Alaskans stating the economy is good or very good dipped below 50 percent. Correspondingly, 71 percent of Alaskans now believe that Alaska is on the wrong track, up from just 32 percent in 2015. So what do Alaskans believe is the solution to the state’s budget woes? More than anything, Alaskans want deeper cuts to state spending. More than any option, including new taxes or tapping into Permanent Fund earnings — more even than a combination of taxes and cuts — voters want a state government that Alaska can afford. And they are correct in wanting this. Efforts in Juneau this year are focused predominantly on “new revenue;” fees, cutting industry incentives, new taxes, and increases to existing taxes. But while debates over these catch-what-we-can revenue initiatives are dominating discussion, they fail to address the budget crisis. Using the fiscal notes from the Office of Management and Budget, all new revenue measures combined generate $855 million. That’s enough money to fund state government for a little over a month. Alaskans are concerned about the other 11 months of each year. The Alaska Chamber believes spending must be brought in line while Alaska savings are still available as a resource. To that end, we support efforts to reduce the state’s operating budget to a sustainable level by creating an endowment model or similar framework to use Permanent Fund earnings to support essential services. Only then should we explore new, broad-based taxes, if needed. Alaskans are aware of the problem. They’re accepting of the necessary solution. They’re just waiting for leadership with the discipline and resolve to get the job done. Curtis W. Thayer is lifelong Alaskan and serves as president and CEO of the Alaska Chamber.  

COMMENTARY: Touted cuts not reducing total size of government

State government is simply too big and the state Legislature has not made adequate progress in reducing the burden of big government. According to the State of Alaska Office of Management and Budget, only minimal reductions in the total operating budget have been achieved in the last two years. Note that the fiscal year 2015 operating budget was off trend and higher because of an extraordinary $3 billion dollar direct appropriation for the state retirement liability. Comparing fiscal year 2014 and fiscal year 2016 total operating costs, a reduction of only 4.2 percent was achieved in two years! And for fiscal year 2017, don’t hold your breath, preliminary budgets recommended by the governor, and proposed by the House and Senate are projected to remain at historical highs. Surprised? Despite the budget cutting rhetoric coming out of Juneau, little progress has been made on real cost reductions. The numbers are clear, the impact is real, and this level of spending on state government is unsustainable. It is time to fundamentally change the cost structure of government before we take more hard earned money from the citizens of Alaska, or raid the Permanent Fund, the savings account which fortunately is protected by our state Constitution. So, why are the numbers so different? The House and Senate claim 10 percent cost reductions in proposed fiscal year 2017 Unrestricted General Fund, or UGF, expenditures. And similar budget reductions have been reported for the current fiscal year 2016 budget. Here’s the problem. Reporting a reduction in expenditure from only this one funding source is misleading. The UGF is only a portion of the state operating budget, albeit a significant portion. The total state operating budget is comprised of expenditures from the Unrestricted General Fund (UGF), Designated General Fund, other state funds, and federal receipts. When we talk about the cost of government, shouldn’t we talk about the total operating cost? When you talk about the budget for your household, wouldn’t you balance total expenditures (total operating cost) against your total income (revenues)? If you look at the total operating cost there is a clear reality — we have not reduced the massive footprint of big government. While the Legislature works to cut UGF, our savings accounts are being quietly depleted to back-fill reductions in the UGF. Also, when supplemental budgets are implemented they offset reductions reported in prior budget years. This is evident in fiscal year 2016, where a supplemental spending request of approximately $185 million is pending in Legislature. We must fundamentally change the way we construct the yearly state operating budget. Currently, the budget is constructed from the top down. We start with last year’s budget and the governor’s request, and ask, “Is there anything we can cut?” We hold hearings where department commissioners vehemently defend their budgets, and special interest groups intensely lobby for their pet funding. Every potential budget cut has a constituency, and potentially a lobbyist, arguing passionately to keep their funding. Human nature and politics usually prevail, which make it very difficult to cut funding after programs and benefits have been established. Unfortunately, we grew state government during the good times, because again, human nature prevailed, i.e. it’s easy to give away someone else’s money to make someone happy. There are many people and organizations coming to Juneau pleading for us to not reduce funding. However the reality is we cannot afford to continue to spend at historic levels. The problem is that this bad behavior has left us in a difficult situation with difficult choices. While making these budget decisions we must never forget about the valued constituency, the businesses, the people and the next generation that will be asked to pay for these Denali-sized budgets. In my opinion, we, the State of Alaska, need to go through every department, every function, and every state owned entity, and ask, “Do we really need this function?” and “Is it government’s role to provide this service?” Secondly, we need to benchmark the cost of state government, by comparing the total operating cost for state government in Alaska to other states across the nation. As a starting point, we should target operating our state government at the national average. So here’s the bottom-line. State government is still too big, too costly, and too inefficient. Gov. Bill Walker should take the lead and restructure his departments, improve operating efficiency, and demand accountability. Benchmarking costs would provide a standard and a goal for achieving cost efficiency. We must not tax Alaskans and draw from the Permanent Fund before we first ensure that Alaska is paying only for essential government services and delivering those services efficiently. Rep. Lora Reinbold represents District 14 in Eagle River.  

GUEST COMMENTARY: Sustainable budget doesn’t require onerous taxes, PFD cuts

The Fairbanks North Star Borough Assembly just passed a resolution asking the Legislature to implement a sustainable budget. I voted against it since it specifically asked for taxes, and those aren’t helpful or necessary for the present situation. During the testimony it was shown that there were a lot of misconceptions about our state budget situation, so I wanted to clarify some of the details. First, the state will be entering an economic downturn, or recession. It has nothing to do with the legislature making cuts; the state spending more dollars will not stop the recession. We should all be prepared for this natural response to low oil prices. Please understand that the lingo about “don’t cut too much or we’ll get a recession” is just a political ploy by big spenders in the legislature who don’t want the gravy train to stop. They’ll use it in the elections the next few years to try and sell the voters that any legislator that made cuts caused the recession. Please think for yourself and don’t buy it. Remember, if taxes or Permanent Fund Dividend cuts go into effect, that money will be taken out of the economy. So any government spending from that was with money already withdrawn from the economy, so it gives no help to the economy. Actually, it makes it worse because government can’t redistribute money without using some, so less gets back to the economy than came out of it. Second, most of the proponents of taxes or PFD cuts are targeting a goal of having a zero deficit. This isn’t needed, and in fact goes against having a sustainable budget, since it has a mindset that we should spend all we get. Since the large money started coming in from high oil prices the state has budgeted based on high oil. The governor’s plan is now reacting to that and budgeting based on low oil. To achieve a sustainable budget, we need to realize that oil prices are cyclic, the will rise and fall over and over again. We can therefore create a budget that is the same (indexed for inflation) ongoing by knowing that fact. Once you get to this sustainable budget number (around $4.3 billion now), you can have a structured deficit in the lean years, and build your savings back up in the good years. Isn’t that why we have savings accounts, to handle unexpected crises? Third, a sustainable budget plan I’ve described has already been worked out by Economist Scott Goldsmith with ISER (University of Alaska Anchorage Institute of Social and Economic Research). It is based on using our two current primary revenue streams, oil and investment income. With that revenue and cutting to a sustainable budget number, we won’t have to implement onerous taxes or PFD cuts. Fourth, the investment income is mostly put into the Earnings Reserve of the Permanent Fund. It doesn’t affect the Permanent Fund, and it doesn’t have to touch the PFD at all. We can completely protect the PFD while implementing this plan. I agree that we need to appeal to the Legislature to implement initiatives to achieve a sustainable budget, and I would encourage everyone to do that. Please remember when doing so, that it can be done with a structured deficit, without taxes or PFD cuts, by using our existing revenues. I was here in the late 1980s when we had our last big recession, and while it was miserable, we survived, and we can do it again. Hopefully this time we learn our lesson and stop increasing government spending constantly in the future. Lance Roberts is a member of the Fairbanks North Star Borough Assembly.

FISH FACTOR: Economist: Many factors involved in retail salmon prices

If a fisherman gets 50 cents a pound for his reds, how can the fish fetch $10, $15 or more at retail counters? “It’s all the other stuff that happens after he sells the fish. A lot of costs, margins and profits are included in that retail price,” said Andy Wink, a fisheries economist with the McDowell Group in Juneau. It’s an “apples and oranges” comparison when it comes to using weights paid for the raw goods and the end product. A lot of weight is lost going from a whole fish, which fishermen are paid on, to a fillet at retail counters. “Most sockeye fillets amount to 40 to 50 percent of the round fish weight. If fishermen sold sockeye at $0.50 per pound, there’s about $1.10 of raw material cost in a $10 per pound fillet sold at retail,” Wink explained. “This might seem like a high mark up, but it’s a decent reflection of all the costs and acceptable margins built into the product.” The average wholesale price Alaska processors received for sockeye salmon (round) at the end of 2015 was $2.40 per pound, according to the state Department of Revenue; and $5.73 per pound for fillets. Costs add up as the fish makes its way to retail counters, where most will tout a “full retail price,” and then tweak it throughout the year using discounts and promotions. “A retailer will run sockeye promotions of say, $9.99 a pound. That way they can say they have discounted the product $8 so it looks like a big saving for the consumer. Instead of promoting the fish for four weeks, maybe they will run it for 10 or 15 weeks out of the year. It just depends on how much success they have with it,” he explained, adding that processors and distributors often have to pay (or reduce their prices) to get a retailer to promote product at a discounted price. The increased supply of sockeye from back to back bumper years at Bristol Bay also has had a big impact on what buyers are willing or able to pay. The big harvests mean more of the reds must be sold through discounts; that leads to a lower wholesale price, which affects the exvessel (dock) price. “Promotions and discounts are a double-edged sword,” Wink said. “They lead to lower prices, but are a necessary tool to move larger volumes of product through the supply chain. Without them, inventories would swell and product would go to waste.” Grundens for gals Grundens, the go to brand for heavy-duty rain gear, has launched a line for women. “Women would send us emails saying, ‘We love your gear, we wear it all the time, but it’s built for guys, said Eric Tietje, Global Product Director. “Either the sleeves are too long or they are too big in the shoulders. It was really just uncomfortable and cumbersome for women to wear.” Tietje credits a push by the social media site Chix Who Fish, for getting the new gear rolling. “All these women really banded together and became a loud voice, telling retailers that they are a market that is not being served,” he said. “We heard from lobster women in Maine, female marine researchers, and women in Alaska.” The result: Sedna Gear, designed for a fishing woman’s dimensions. The new line of rain gear has brought a wave of good responses, beyond the better fit. “The women have told us that by creating this product, it recognizes and validates what they do in the industry, and that means something,” Tietje said, adding that it’s made a big difference on deck. “It’s not just a piece of clothing,” he said.” We view these as pieces of equipment that people use to do their job.” Coming soon from Grundens: light weight gear and base layers for women, ceramic coatings on outer gear for added safety, and fabrics using Alaska crab shells that absorb sweat and eliminate odor. (That product is produced by Juneau-based Tidal Vision LLC.) ComFish flash Big names, hot topics and fish competitions are headlining the 36th annual ComFish Alaska trade show, hosted March 31-April 2 by the Kodiak Chamber of Commerce. In the line up: Alaska Senators Murkowski and Sullivan both are scheduled to hold open meetings; as are state commercial fisheries director, Scott Kelly, and Rep. Louise Stutes (R-Kodiak), who also chairs the legislative Fisheries Committee. Gunnar Knapp, director at the Institute of Social and Economic Research at the University of Alaska/Anchorage, will discuss salmon markets and how the state’s fiscal crunch might affect fisheries. Alex Stone of the Washington, D.C.-based consulting firm Booz Allen Hamilton will provide updates on Navy training exercises in the Gulf of Alaska. Presentations also include: impacts of ocean acidification on crab fisheries, slow growing halibut, better trawling methods, new fishing vessel safety regulations, the “graying of the fleet,” challenges in access to Alaska fisheries, a cannery history and much more. ComFish wraps up on April 2 with the annual fish-filleting contest organized by Ocean Beauty Seafoods. It includes contestants from each of Kodiak’s seven processing plants who are timed and judged on fillet and trimming speed, form and quality. New to the ComFish line up is an Alaska Sea Grant Fishermen’s Showcase featuring contests in knot tying, net mending, hook throwing, coiling and more. The ComFish dates are March 31-April 2 in downtown Kodiak. www.comfishalaska.com. Visit www.alaskafishfactor.com or contact [email protected] for information.

The Bookworm Sez: Be the best at being your own boss

Another desk at the office is empty this week. Another co-worker packed up, leaving the place short-handed. Another downsize, and another reason for worry. What will you do if you’re next? You can’t just start over but you can’t retire yet, either. So read the new book “Be Your Best Boss” by William R. Seagraves, and see if you have what it takes for a new beginning. William Seagraves likes to drive. When he’s with friends or colleagues, he’s always the first to offer his car, which is a good metaphor for his worklife: he likes to be in the driver’s seat in business. Yes, he enjoyed some autonomy in his last position, but he says, “I could not stand (the) lack of control.” Seagraves left his corporate job and tried his hand at being an entrepreneur (“That scary twelve-letter word”) in a few different ways before he discovered something he liked. Today, he runs a successful company that helps entrepreneurs get started; in this book, he offers guidance on deciding if owning a business is for you. First: what’s your pain? Are you being forced out by younger workers? Downsized? Or are you disillusioned with corporate life? What are your passions? Knowing answers to those questions will help winnow your options and overcome the “Yeah, Buts.” Look at your skills and experiences and understand that you’ve already won half the battle. You know how to play nice with others. You’ve grown a thick skin, “practiced making money,” and learned the rules of a lot of games. Many of the traits you’ll need to be an entrepreneur are inherent in you now. Next, take the quiz Seagraves includes and understand that “size matters.” Are you more of a “Company of One” kind of person? Would you be better as “Boss of a Few”? Is a “Business of Many” more your style? And what about a franchise? Know the pros and cons of these entrepreneurial methods, take things “one step at a time,” keep in mind that change is the “only constant,” and remember that “… a smart business owner always plans for the exit, and there are more options than you might think.” Self-employment: the most frustrating, irritating, horrible, wonderful, awesome, terrific thing you’ll ever do for yourself. Are you ready? “Be Your Best Boss” will help you decide. As you might expect, author William R. Seagraves is mostly encouraging in his book. There’s a lot of surface positivity here, but entrepreneurial readers with a mindset of doing it will absolutely find the help they need to do it right. I was happy to note plenty of quizzes to guide future business owners into the kind of endeavor that best fits their personality and work-style, and the Pros and Cons pages here are invaluable. While younger entrepreneurs might appreciate this book, it really seems to be more for older readers who’ve been in the workforce awhile. Corporate life may have soured for Boomers and early Gen-Xers, but “Be Your Best Boss” won’t leave them empty handed. Terri Schlichenmeyer is the author of The Bookworm Sez, which is published in more than 200 newspapers and 50 magazines throughout the U.S. and Canada. Schlichenmeyer may be reached at [email protected]

AJOC EDITORIAL: Read their lips: No new taxes

With operating budgets passed in the House and Senate but not yet funded, at least one thing is now clear: Gov. Bill Walker’s proposals to raise taxes on individuals and businesses by nearly $460 million in the next fiscal year aren’t going anywhere. Senate Finance Co-Chair Pete Kelly, R-Fairbanks, couldn’t have been more blunt — or, frankly, rude — in response to a question about how the Legislature plans to pay for the fiscal year 2017 spending that figures to outpace revenue by $3.7 billion. At a Finance Committee press conference March 15, Kelly took the opportunity of a question that did not mention taxes to state unequivocally that he has no intention of plumbing a well to the private sector to fill whatever gap remains once some means of drawing from Permanent Fund earnings is chosen. Kelly noted he was speaking for himself, but with all but one of Walker’s proposed tax hikes still sitting in committee or yet to receive a hearing, there can be little doubt his opinion represents the Republican majorities. The only tax proposal that has moved out of its original committee is the doubling of the fuel tax from its current national low of 8 cents per gallon that is projected to raise about $49 million per year. The increase has received a large amount of support from stakeholders in the transportation industry who recognize the importance of maintaining the infrastructure on which their livelihoods depends. Of all Walker’s tax proposals, it’s also the fairest and most broad-based, especially at today’s depressed fuel prices. The Legislature still has a heavy lift ahead to select a means to use the Permanent Fund earnings and because it won’t raise additional revenue through taxes, the majority in the House is going to have to cut some deals with the minority Democrats in order to draw from the Constitutional Budget Reserve, or CBR. And just as an aside, Kelly and fellow Finance Co-Chair Anna MacKinnon, R-Eagle River, attempted to argue that a budget paid for with the Earnings Reserve and the CBR is “balanced.” A budget is balanced when revenue covers expenses. A budget that relies on savings is funded. There’s a huge difference, and as far as spin goes it can’t turn a pinwheel in a hurricane. Nevertheless, the majorities are correct that it is far better to make a relatively small draw from the CBR than it is to kick Alaska’s economic drivers in the guts while they’re down. The oil industry that’s propped up Alaska’s government spending for nearly 40 years is always a juicy target — for this governor in particular — but no knowledgeable observer could look at the daily stream of news about layoffs, delayed projects and idled rigs and think raising taxes on its members by some $100 million as Walker has proposed is anything but a terrible idea. Alaska’s most valuable fishery with the greatest number of workers — salmon — is in the midst of its own price crisis yet Walker wants to extract $18 million out of the industry by raising every fish tax. Minerals prices have also trended lower, and global sluggishness is reducing demand along with other factors such as transitions away from coal that caused Usibelli to halt exports last year. The governor and his Revenue Department asked the University of Alaska Institute of Social and Economic Research to study the effects of budget cuts on the broader economy. That ISER’s original analysis did not consider the impacts of private sector job losses was a glaring omission that still managed to be revealing. What we can see from the ISER study is that government job losses have a multiplier effect of less than one. A loss of 900 government jobs results in a loss of about 700 indirect jobs. ISER may not have looked at private sector losses and their multipliers, but the McDowell Group has done plenty of work in this arena over the years. What McDowell Group has found is that every direct job in oil production creates an additional nine in the private sector. When the role of oil taxes are accounted for, each oil industry job pays for another 10 state and local government jobs. Mining and fishing have 2-to-1 job multipliers according to various McDowell Group studies. Breaking it down, the Legislature’s priorities should be clear: Preserving private sector jobs is more important than preserving public sector jobs. As a business publication, we don’t want anyone to lose their job, but this is the tradeoff the state faces. Walker may not like it — and he’s certainly welcome to go out and advocate for taxing Alaskan incomes at a $400 million annualized rate — but refusing to raise taxes during an economic downturn is the right call from the Legislature. Andrew Jensen can be reached at [email protected]  

FISH FACTOR: Salmon permit values sink; halibut quota prices spike

Firesale salmon prices last year and a dim outlook for the upcoming season have caused the value of Alaska fishing permits to plummet. To another extreme, the prices for halibut catch shares have soared to “unheard of levels.” Starting with salmon permits: “A lot of people had disastrous seasons last year, whether it was drift gillnet or seine permits, and the values have declined dramatically,” said Doug Bowen of Alaska Boats and Permits in Homer. At Alaska’s bellwether fishery at Bristol Bay, a base sockeye prices of 50 cents per pound helped push drift gillnet permit prices into the $98,000 range, down from $175,000 last spring. “That may be the bottom; they seem to have come up a bit,” Bowen said, “but it’s still way below what they were trading for at this time last year.” The lower prices have spawned little interest in Bay drift permits; likewise, for salmon seine cards across the state. Seine permits at Prince William Sound are priced in the $150,000 range, down from over $200,000 a year ago. Kodiak seine permits have sunk into the mid $30,000s, and a Cook Inlet drift permit is valued in the $60,000 range. Bowen doesn’t expect the tide to turn anytime soon. “I’m afraid a lot of the same factors that contributed to the low prices we saw last year are pretty much the same this year. It’s not an optimistic outlook for salmon, and that is depressing the market for permits, and also the boats,” he added. “There are lots on the market, lots of sellers, not that many buyers. “There’s not a lot of extra money floating around in the salmon industry. So folks wanting to upgrade their vessels or pick up permits in another area, we’re just not seeing that happening.” The situation is slightly better in Southeast Alaska, where driftnet permits are getting a plug of interest. “More than I thought compared to all the other salmon areas,” said Olivia Olsen of Alaskan Quota and Permits at Petersburg. “We started at $78,000 in November and drifts now are going for $85,000 and they may creep up from there. Same with power troll permits. They’ve been pretty steady sales at about $35,000, which is down about $6,000 from last year, but still a pretty good price when you listen to all the talk about bad salmon prices. Hand troll permits also are on the upswing to $12,000.” Both brokers said salmon permit prices tend to tick upwards the closer it gets to salmon season. “I think the main issue is what we are going to see for prices, Bowen and Olsen said. Halibut share shocker This year’s small increase in halibut catches combined with hopes of a repeat of $6-$7 per pound prices was enough to send quota share prices skyrocketing. “There was a big rush after the halibut numbers were announced in late January,” said Olsen at Alaskan Quota and Permits in Petersburg. For the first time in nearly two decades, the coast-wide halibut catch was increased by 2.3 percent to nearly 30 million pounds. Alaska’s share of 21.45 million pounds is up 200,000 pounds from 2015. “I would say quota prices shot up $10 a pound since December,” Olsen said of Southeast shares. “We have current sales pending at $63 and $65 per pound, with rumors of going higher. Those prices are just unheard of, and to jump up that high in that short period of time — oh, my golly!” Are people buying at those nosebleed prices? “There’s a lot of people drawing the line, but there are a few who have bought. They’ve been waiting a long time for it and are just going to bite the bullet,” Olsen said. The same holds true for quota prices in the Central Gulf, Alaska’s largest halibut fishing hole. “Those are bumping up to $60,” said Doug Bowen of Alaska Boats and Permits in Homer. “We’ve had offers of $59 but no takers. Quota shares for the Western Gulf have increased by around $5 and are in the $40s if you can find it. There is strong interest there and also in Bering Sea regions. But it’s the same scenario: more buyers than sellers and the market is really tight.” Olsen added: “It will be interesting to see if these prices will last.” Got ice? A grass roots push is underway in Kodiak for a self-pay icehouse and crane at Oscars Dock at its downtown harbor. “It’s common in fishing communities throughout Alaska and the nation,” said Theresa Peterson, a fisherman and outreach director for the Alaska Marine Conservation Council. “It’s kind of strange that Kodiak doesn’t have this facility, being that we are the No. 2 port in the nation, and home to the largest and most diversified fleet in Alaska.” The need and benefits go far beyond commercial fishing, Peterson stressed. It would serve Kodiak’s five outlying villages, whose residents travel by boat to town and load/offload provisions, sport charter operators, recreational anglers and hunters. Fisherman Darius Kasprzak, who calls Kodiak’s lack of a public icehouse “flabbergasting,” is worried that a lack of it will drive the island’s fleet of small salmon boats out of business. “More processors are requiring RSW (refrigerated sea water) systems and are phasing out all the ice boats. Only a few processors are still accepting fish iced in holds, and most of those are grandfathered in,” Kasprzak said. “So all these little boats that don’t have room for RSW or don’t have the money are walking on pins and needles. But if there’s public ice that will change things dramatically.” Boat owners with RSW also would like to be able to grab ice so they could shut down the systems at night “and not have to listen to it,” he added.  “It’s worth it to buy some ice and chill off the top of the fish and not have to buy fuel and put wear and tear on the RSW,” he explained. Kasprzak said there is another reason ice is even more important for a water faring community. “Our waters are warming. Right now temperatures are at 7 degrees over normal. Last summer the water at Prince William Sound reached 60 degrees. Our RSW systems aren’t built to handle those temperatures. The Kodiak processors didn’t have enough ice for boats last salmon season because it was so hot. There’s more of a need now for a community ice house than ever.” The Kodiak City Council will hear the issue on March 15. Weigh in on water The Alaska Department of Natural Resources is considering revising its water management practices and wants input from the public. It includes regulations on water rights in streams, lakes, wells and other bodies. A DNR announcement said: “The department is soliciting feedback and comments from the public on how they would change or improve the existing regulatory framework related to water management or for suggestions and proposals which would improve the regulations related to water management before the formal process of drafting any proposed changes begins.” Comments are accepted through March 18. Send via email to [email protected] Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

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