Opinion

GUEST COMMENTARY: A path forward to unify Railbelt electric utilities

The article entitled “Concept scrapped for unified Railbelt utility,” written by Elwood Brehmer in the Alaska Journal of Commerce on July 17, does not mean the future of our utilities is doomed; it just means there is opportunity to work out better solutions. The electric utility companies that cover the Railbelt have been working to form the Railbelt Reliablity Council and have been working on the formation of a transmission company, or transco, intended to simplify electrical transmission transactions among entities along the Railbelt. The real driver for all this is the desire by some to allow open access of renewables to any point along the system, and this vision was driven by House Bill 306. In 2010, HB 306 “An act declaring a state energy policy” was passed. Item 2 of the legislative intent reads: “…the state receive 50 percent of its electric generation from renewable and alternative energy sources by 2025.” There are efforts to establish a binding Renewable Portfolio Standard that would require 50 percent renewable electric generation by 2030 as some think Alaska’s (or Alaskans’) feet need to be put to the fire. Before we get to a binding standard, Alaska needs a plan to work out all the issues that hinder even starting the process of achieving 50 percent and greater renewable energy sources, as there are many issues that need to be solved. First, the Regulatory Commission of Alaska and the state have not provided any real incentives to achieve a unified utility. Instead, they have threatened to do it for them if they fail to get it done. The Railbelt utilities comprise the largest supplier of electric power to the residents and businesses in Alaska, and yes, there have been efforts to encourage the addition of renewable energy sources to the Railbelt. There are those who would have the Legislature create an independent entity in the Railbelt with the desired intent to mandate the increase of the amount of renewable sources that are connected to the Railbelt utilities. The concern that drives this is that the Railbelt does not deliver the maximum benefit possible to ratepayers. Forcing the Railbelt utilities to change their practices by mandate and regulation will not result in the desired effect, as there are many technical and business problems to address before all the separate utilities can operate effectively as a combined entity. There are also political hurdles that need attention, since there have been numerous complaints from the public against the Railbelt utility companies over the $1.5 billion spent for generator upgrades, which many think should have been invested, instead, directly in renewable resource connection. Understandably, utility companies are reluctant to invest any more money in infrastructure when their previous investments only drew the ire of their ratepayers, resulting in rate case intervention against them in some circumstances. Second, combining five separate entities into one is not as easy as many think, as each utility must consider the adverse impact to their own ratepayers; thus, some positive motivation should be provided to the utilities to ensure obvious and measurable benefit is achieved in their combining to become one utility. As noted before, for the entire Railbelt to be combined into one entity and be open to connection of Independent Power Producers, or IPPs, there are technological problems to be worked out. Third, the list of issues that work against adding generation to the system are many. Decreasing population, decreasing loads (with increased efficiency through conservation efforts), insufficient communication over the extent of the Railbelt, lack of energy storage, and insufficient transmission line capacity all provide negative incentives to develop a unified utility. As rates continue to rise, more customers will be incentivized to install peak-shaving, load-leveling, and distributed generation assets to decrease their costs, and this will require adjustments to rate structures to meet utility revenue requirements. Likewise, introduction of distributed battery energy storage and distributed generation will also require new rate structures for charging, discharging and production. To complicate matters, every change in rate structure requires the approval of the RCA, a lengthy and political process subject to public intervention and scrutiny. Under the current circumstances, why would the utilities be motivated to increase the amount of generation they have available when everything is working against them? Fourth, the technical deficiencies of the current Railbelt paradigm should not be underestimated. Communications and control capabilities along the Railbelt need to be upgraded to allow proper monitoring and control of all the new inverter-based equipment that will be connected. Even if we do not implement a true “smart grid,” it will need to be a lot smarter than it currently is to accommodate a lot of renewables interconnected throughout the system. Transmission lines need to be upgraded not only for the current loads and generators but also for the future loads as well as a reconfigured Railbelt utility. Sufficient energy storage must also be added to the system in strategic locations to smooth out the variability of renewable sources as well as variable loads to ensure system stability and minimize renewable resource curtailment. Right now, Railbelt utilities are compensating for the existing variability from Fire Island and other sources with conventional generation. This wastes fuel as well as renewable generation potential. To illustrate the scale of the problem posed by the desire to incorporate 50 percent renewable energy resources, a recent annual value for energy consumed along the Railbelt is just more than 5 million megawatt hours, or MWh, which is an average generation of 580 megawatts. The 50 percent share of renewable and alternative generation called for by HB 306 would be 2.5 million MWh. This could be provided by 725 MW of interconnected renewable and alternative generation sources operating at a capacity factor of 40 percent (typical for wind power), provided there is sufficient energy storage to account for the variability. At some point in the future, nearly 100 percent of the Railbelt’s energy demand could be supplied by alternative sources, but large-scale, long-term energy storage is needed to make this possible. The best current technology for storing and absorbing energy on the needed scale of weeks to months is pumped hydro. In any case, the solution needs to be big enough to continuously store surplus energy during seasons of high energy production and to discharge continuously during seasons of low production. Additionally, implementing anything on this scale will require extensive transmission line upgrades to handle the flow of power. By the way, spending $1.5 billion for upgraded generation seems to have been a good idea, as the new generation will help ensure a more efficient and reliable system while the distributed renewable resources are added than the old generation ever could have. Finally, The Railbelt utilities need to be in the business of providing the lowest cost electricity possible. One way to do that is grow their load base to increase the economy of scale and decrease the cost of service to meet revenue requirements. Therefore, utilities should look for ways and cooperate with other entities to encourage the diversification of Alaska’s economy through value-added endeavors on all extracted resources in Alaska (i.e., processing rare-earth minerals and heavy metals), developing new industries (such as the ocean industries or “Blue Economy”), and improving the economy in more communities. If Alaska is “open for business” then let’s produce the power to support the new businesses while serving the long-time customers with low-cost power. For example, the utilities should be marketing power to the mining projects currently in process. How can six individual utilities market to encourage an expanding marketplace? The consumer marketplace has its own considerations. Electric vehicles are supposed to “take over the world” in the next few years. How can six separate entities incentivize fast-charging stations in their respective service territories? What about incentivizing customers to use electricity for heating and cooling instead of using natural gas? Business development efforts such as these should have the overall goal of increasing the demand for their product, electric power. Once utilities become serious about providing low cost power and growing their customer base, we can look at the necessary capital improvements that are necessary to accommodate the vision we wish to achieve. In summary, moving the integration of the Railbelt utilities forward requires a PLAN, not a mandate. They (the utilities) will have to find a way to become one utility while keeping all the customers happy with rates lower than they are paying now. Let’s be innovative! For Alaska to develop a long-term energy plan takes leadership to expand our energy base beyond oil and gas, while we still have a good oil and gas economy. Robert Seitz, PE, electrical engineer, is Alaska resident for more than 75 years, and an advocate for renewable energy sources.

GUEST COMMENTARY: State budget is a reflection of Alaskans’ values

As the Legislature and the governor wrestle with assuring an affordable and sustainable budget, Alaskans are being forced to decide what we, as a society, value. It’s not surprising that good people disagree. In these past weeks, Alaskans have spoken loudly and clearly about the programs and services they value, causing the governor to re-examine his vetoes. In our own lives, we pay for what we value: electricity, school supplies, winter boots, cell service. Deciding what we value — and how to pay for it — in our very diverse, unique and vast state is the heart of what legislators and the governor must do every year. We’re sometimes told that government is “bloated.” Or, we hear anger and resentment toward “government” in general. So, it’s important to step back and look at what government is and what it does. In reality, “government” is mostly an array of public services delivered for Alaskans by Alaskans. These services are an expression of what we, the people, have collectively deemed worthy to provide for ourselves, our families, and our neighbors. Whether it’s the school custodian, driver’s license examiner, child protection worker, prosecutor, fisheries biologist, water quality specialist, or corrections officer, it’s a public service. And, government is citizens like me and hundreds and hundreds of other everyday Alaskans in the Legislature or on assemblies or school boards across the state elected to conduct the public’s business and to assure critical services. Citizens wrote the Alaska Constitution, which requires state government to provide education, health, and welfare, all of which are more expensive in a high cost-of-living state with few concentrated population centers. Those citizen delegates decided that Alaska must manage its vast public resources, such as oil, gas and fisheries. And, those same citizens determined that our new state would be responsible for services typically provided by counties, such as courts, jails, child support, juvenile justice, roads, ferries, public safety, medical examiners, and airports. (In fact, Alaska is the largest operator of airports in the world.) I think it’s worth noting here that a 2017 state analysis demonstrated that once “Alaska-unique” obligations and programs are accounted for, per capita state spending is within a few percentage points of the national average. Despite the state’s extensive responsibilities, state jobs and departments have shrunk in the past four years since oil prices dropped. While the total state budget is higher than last year due to increased federal contributions (mostly for Alaskans’ health care coverage), overall state general fund spending for agencies, the university, Legislature, and judiciary actually dropped by more than $1.5 billion or 25 percent since 2015. Since the per-barrel price of Alaska’s crude plummeted by more than half (landing at $49 per barrel in January 2015, after being at or more than $100 per barrel for nearly four years), 2,900 state jobs have been eliminated (about 11 percent of the workforce); university positions have dropped by 17 percent. Can state government be downsized further? Yes, and it will. Can state government be made more efficient and effective? Yes, and it should. Agencies and the legislature must be diligent in seeking efficiencies and implementing savings. But we must also be vigilant to not be penny-wise and pound-foolish, harming our future generations for short-term savings. In this process, we also must be vigilant to not upend Alaska’s fragile economic recovery. Surely, a stable economy is at the top of our collective values list. Local chambers of commerce, banks, and economic development corporations have warned about the damage of sudden, big cuts. Business values stability. As legislators, we must, as well. And, like a business, we must take care of our assets and protect our investments in order to support our core mission, as well as what we value — including the Permanent Fund, the Permanent Fund dividend, and public services — for the long haul. We are in a great debate about the future of our state. Tough decisions require digging deeply to evaluate spending and to ensure that funding is directed at that which, collectively, Alaskans value. And, we must remember: state spending, for the greater part, is an investment in Alaska’s economy, it’s people, and our future. Rep. Andi Story represents House District 34 in Juneau.

OPINION: Sound and fury with no assembly required

About the only good thing to say about the ongoing effort to recall Gov. Michael J. Dunleavy is that at least it won’t cost as much as the Mueller Report. In the end, though, it will end up being just as effective at reversing the outcome of an election. The opponents of the governor launched their effort on Aug. 1 to much fanfare and media coverage highlighted by a rally at Cuddy Park in Anchorage where a couple hundred people gathered just steps away from homeless camps as Democrat Rep. Ivy Spohnholz egged on the crowd with her fist raised like John Carlos and Tommie Smith. Lost in the excitement was much, if any, of a critical look at not only the high legal hurdles to overcome but the more relevant length of time this pointless fight is going to take. First, the recall pushers have to gather some 28,000 legitimate signatures to even deliver the petition to Lt. Gov. Kevin Meyer, who oversees the Division of Elections and is required to make the call on whether it passes legal muster. Meyer will rely on the advice of Attorney General Kevin Clarkson in deciding whether to certify the petition, with the odds of a positive recommendation somewhere in the neighborhood of President Donald Trump appointing Rosie O’Donnell as chief of staff. Once Meyer denies the petition for lack of meeting the legal standard for recall, the battle will move on to Superior Court with the losing party in that venue sure to appeal to the state Supreme Court. Should the Superior Court ruling go in the recall petitioners’ favor, they will be allowed to begin gathering the more than 71,000 signatures needed for a special election while the appeal is pending. Should it not, they won’t be able to start unless they ultimately prevail at the Supreme Court. Recent history on two high-profile cases that reached the Supreme Court show that even in an expedited timeframe the entire process would take nearly a year if not more to be resolved. When Sen. Bill Wielechowski, D-Anchorage, sued former Gov. Bill Walker in September 2016 for vetoing half of the Permanent Fund dividend, it was not until August 2017 that the Supreme Court issued its decision in favor of Walker. After former Lt. Gov. Byron Mallott denied the Stand for Salmon initiative from the ballot in September 2017 and was subsequently challenged in court, it was not until August 2018 that the final ruling was made. To think a case as monumental as the recall of a governor would take any less time is wishful thinking. As the petitioners note in their legal analysis, no recall petition against a statewide official has ever been certified in Alaska. Presuming the petitioners gather enough signatures in the next month or so, and they said they got to 18,000 within the first week, it likely won’t be until the fall until Meyer makes his decision and kicks off the court fight. Further presuming at least a year to receive a ruling from the Supreme Court, the soonest a recall election could take place would be sometime in early or mid-2021 depending on whether they are allowed to gather signatures while the appeal is pending based on how the Superior Court decides. That would be just more than a year away from the regularly scheduled gubernatorial election in 2022. Now we have entered the be-careful-what-you-wish-for stage of the recall effort for the petitioners. Should everything somehow go their way, a recall election is held and they are successful in giving Dunleavy the boot, they will have only succeeded in elevating Meyer to the governor’s office. Giving him more than a year to govern, including a legislative session, would provide Meyer an opportunity to present himself as a reasonable and drama-free Republican alternative much in the way the low-key former Gov. Sean Parnell benefited from simply not being Gov. Sarah Palin after her abrupt resignation in summer 2009 and he easily won election in his own right in 2010. That isn’t going to help Democrats win a statewide office for the first time since Mark Begich squeaked out a win over the unjustly convicted late Sen. Ted Stevens in 2008. Legal process aside, the recall petition itself is as thin as the paper it’s printed on even as the authors throw as much spaghetti at the wall as possible hoping just one piece sticks. When the top arguments by their own admission are Dunleavy’s failure to appoint a judge to the Palmer Superior Court within 45 days (he eventually did) and their unproven allegations of campaign finance disclosure violations, even they know they are throwing a Hail Mary hoping for a judicial miracle. If failure to follow a statute (cough, PFD formula, cough) and APOC violations are grounds for recall, then there are a lot of legislators who should be sweating. Further, the allegation of “incompetence” for an admitted error in a Medicaid funding veto is laughable. While the habitual rake-stepping of this administration has been described in this space as incompetent, that is not the legal standard for a recall. The petitioners even acknowledge this in their legal memo with the admission that the legal standard is “lack of ability to perform the official’s required duties,” which refers to situations such as medical incapacity. The leaders of this effort likely know all of this and understand the real purpose is to gin up enthusiasm for the 2020 legislative races. Those who actually believe this is going to work may also be interested in buying a bridge to Gravina Island. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: The private sector, not the government, is what drives an economy

Despite what you might read in some recent media publications, Alaska’s economy is recovering. Jobs have increased every month since last year’s election, GDP is up by more than 3 percent, wages are climbing, and the private sector is showing a willingness to invest in Alaska. If you believed some of the recent doom and gloom headlines that have come out you’d think that state government is truly the economic driver of a state’s economy and without it, we are destined to fall off the cliff. In reality when looking at the entire operating budget and all fund sources, the reductions equate to about a 6 percent reduction from fiscal year 2019 …hardly fiscal Armageddon for a state government that has been living comfortably for several decades. Fortunately, most Alaskans understand that the private sector, not the government, is what drives an economy. It’s true that Alaska’s private sector has been through the wringer the past four years but businesses large and small are starting to get back on their feet. A smaller, leaner more efficient government will help build confidence as these businesses make investment decisions in Alaska. While there has been a bit too much “the economy may never recover” rhetoric, it was good to see that Anchorage Economic Development Corp. recognized some of the great things that are happening in our economy. Some of the highlights include statewide cruise volumes increasing by 16.5 percent as well as new developments on the North Slope adding an estimated 350,000 barrels per day in the next few years. Alaska is and will continue to be a resource state and AEDC nailed it when they reported North Slope investment is “an encouraging sign of optimism among producers.” Overall investment on the North Slope has increased from $4.4 billion in fiscal year 2018 to a projected $5.5 billion in 2020. However these new developments will require multi-billion dollars of additional investments by the private sector. We are realizing this rebound in investments is due in large part to the fiscal stability we’ve had in place for the past five years. Make no mistake, Alaska does not have the expertise or balance sheet to develop these resources. We will continue to rely on private sector investment to get our resources to market. They in turn must count on the state to put in place a stable budget that lives within its means. There was a substantial disconnect between how private sector and government reacted to the recent recession. The private sector was forced to react swiftly and immediately while government refused to face the reality of the recession. How can I say this? Just look at the actions taken over the past few years. Spending far outpaced annual revenue as we blew through $15 billion in our biggest savings account, the Constitutional Budget Reserve. At the same time family households and businesses small and large were forced to adjust their spending habits to adapt. During this time Alaska lost 12,000+ jobs of which a very small fraction were government jobs. Job losses are painful regardless of how they are funded but government was held harmless for the most part through the CBR spend down. It is more important than ever that we create a smaller governmental footprint to adjust to our new revenue realities. Alaska does hold nearly $70 billion of reserves, almost 25 percent of which is in unrestricted accounts. Those financial assets generate nearly $4 billion per year in earnings and represent a potential source of funding should a temporary reduction in revenues cause cash flow troubles. That’s on top of over $2 billion of other state revenues that covers nearly half of the cost of running our state government. This means we have a coverage ratio that is the envy of almost any other government. I met with all three rating agencies (Moody’s, S&P, Fitch) last week and they certainly recognize the vast financial and natural resources with which Alaska is blessed. They also give the previous legislature and Gov. Bill Walker kudos for passing Senate Bill 26 in 2018: the Percent of Market Value framework that accesses a portion of the Permanent Fund Earnings Reserve. However, they also correctly point to the statements made by those same politicians last year regarding SB 26 as only a “partial fix.” The PFD calculation has been faithfully followed for nearly 37 years. SB26 is a 12-month-old law and an incomplete by many legislators’ own admission. If there’s one thing that government can do to assist in this recovery it will be to get its fiscal house in order, which will allow the recovery to continue. Alaska is blessed with tremendous resources and will rely on private sector capital to monetize our resources. An unbalanced state budget will ultimately lead to confiscation of hard earned private sector dollars. It is imperative that we reduce the government footprint to put our state on solid footing for generations to come. Bruce Tangeman is the commissioner of the Department of Revenue.

GUEST COMMENTARY: The self-destructive fight over the PFD

Like many Alaskans, I’m dismayed at how the debate over the size of the Permanent Fund dividend has degenerated into cutthroat politics, pitting Alaskans against each other. I’ve always felt the small-town character of our state, where many people know each other, would allow us to work out our disagreements in a more reasoned manner. No more, it seems. Former Gov. Jay Hammond, who passed away in 2005, would be dismayed at how the PFD has divided Alaskans and corrupted our politics. Civil debate is no longer how to improve schools or solve homelessness, but about the size of the annual dividend check. It’s obvious, too, that many Alaskans, a lot of legislators and possibly our governor, have little knowledge of the history of the Permanent Fund and the dividend, and how they work. I forgive ordinary people who are busy earning a living for this, but I’m not so forgiving to elected officials who should know better. I was around the Legislature when the Fund was created by the Legislature and the voters in 1976, as well as in 1980, when the dividend was approved by the Legislature. You wouldn’t know it now listening to those who see the PFD as an entitlement, but the dividend was actually quite controversial when it was created, and almost didn’t pass the Legislature. Many Alaskans were true conservatives in those days and were dubious about the state handing out checks. Gov. Jay Hammond and a group in the state House pushed the dividends, but there was a lot of opposition from other legislators, particularly in the Senate, where there were worries about the dividend diverting money from sorely-needed public infrastructure. Hammond had to strong-arm senators with threats to veto the state capital budget to get the votes, and even then the margin was narrow. When the Permanent Fund was created in 1976, there was no discussion about a dividend. The idea was mentioned once during a legislative hearing by a consultant, but there was no public discussion. I served on an advisory board to Hammond and in a long series of public forums we held in the late 1970s on how Alaska should handle policy issues, including our new oil wealth, I don’t recall any mention of a PFD. All that was years ago, however. Memories fade and myths develop. One myth I heard a lot of during public meetings on the PFD this spring and early summer was that the dividend is the “people’s share” of state oil wealth. In a symbolic sense, that can be true — people are free to believe it because the PFD does represent a public sharing of some of the Permanent Fund’s income, but there is no legal basis of a private right to this public resource or that the PFD is guaranteed. In fact, when Congress passed the Alaska Statehood Act in 1959, our new state was given a generous land endowment, including mineral rights (the basis of future oil wealth), but the state was forbidden to sell or privatize its mineral rights. Leasing of extraction rights was allowed, however. which we do. This prohibition in the statehood act cuts against any notion of a private right, through the PFD, to an individual’s direct share of oil ownership. Congress’s reasoning for this is buried in the committee records, but the common belief was that congressmen were worried about the young state’s ability to support itself and wanted to encourage natural resource development to provide revenue for public services. The prohibition was inserted to forestall any temptation by Alaskans to sell off resources, other than through orderly leasing programs, to get quick bucks. In its wisdom, Congress was protecting us from ourselves. But while the state can’t legally grant a private right to oil income the Legislature, which has the sole authority to appropriate funds, can certainly develop a mechanism to share the wealth, which it did in creating the PFD in statute. However, our constitution gives the Legislature the flexibility to change any statute any time, including that for the dividend. The PFD also requires an appropriation every year in the budget, and despite the existence of a 1980s-era statute that guides the calculation of the dividend the amount is purely up to the Legislature. The existing formula was designed at a time when the Permanent Fund consisted mainly of investments in bonds and it worked well at the time. When the Fund diversified into stocks and other equities distortions began to appear but legislators essentially followed the formula over the years because the Permanent Fund was small at the time and the PFDs relatively modest, but most important because state oil revenues were ample. State leaders were preoccupied with other issues that were more important at the time and left the PFD formula alone. Then came 2016, when state oil revenues dived, and the Permanent Fund, its earnings and the PFDs had grown. The need to use some Fund earnings became apparent. Reducing the PFD was part of that, even though the dividend remained high by historical standards. We certainly face a political collision over this now. As he campaigned, Gov. Mike Dunleavy promised a “fully-funded” PFD under the old formula, which works out to about $3,000 this year. There is strong pushback from most legislators and many in the public, however. To pay for the large dividend, the governor has effectively cut the state budget through vetoes. Critics feel huge cuts to the University of Alaska and social services for needy Alaskans, through vetoes, aren’t worth the $3,000 PFD. Others, however, argue their families need the large dividends to help ends meet. It’s hard not to be sympathetic. It was interesting to me, however, that in hearings by the House Finance Committee on the PFDs last week, many who argued for the larger checks also said they would be willing to pay modest state taxes to help support public services. One person said she arrived in Alaska in 1977 and paid a hefty state income tax. If the taxes Alaskans paid then were adjusted for inflation, she said, they would bring $1.4 billion yearly into the state treasury. That’s easily enough to cover the budget deficit and even pay for the PFD. Alaskans now essentially pay no state taxes as individuals. The state is still supported by oil revenues and, now, a portion of Permanent Fund earnings. Other Americans look at our political fight over the PFDs and think Alaskans are nuts. They’re right. ^ Tim Bradner is co-publisher of the Alaska Economic Report and Alaska Legislative Digest.

GUEST COMMENTARY: Governor’s vetoes don’t reflect Alaska’s values

Over the past month, Rasmuson Foundation’s board of directors has urged our elected leaders to compromise and seek solutions that are best for Alaska when addressing the state’s $1 billion plus budget gap. We have stated our belief that a solution relying primarily on cuts will negatively impact critical services throughout the state, causing harm to many Alaskans. The Alaska Legislature responded with a budget that included $190 million of cuts, which was the largest decrease in year-on-year spending in state history, while preserving a high quality of life for our citizens. The governor’s vetoes announced June 28 will harm Alaska’s most vulnerable citizens and have a significant and detrimental impact on our state’s economy. The impact of these decisions will carry negative consequences well beyond this year, impacting generations to come. The budget he signed into law has set off a battle that addresses the soul of Alaska, who we are and what we represent, and the kind of state we hope to leave to future generations. Since 2016, Rasmuson Foundation has been conversing with Alaskans about the budget through townhalls, community meetings and online discussions. Research shows that a majority of Alaskans prefer a multifaceted approach to balancing our state budget. Yes, this includes reducing spending, but it also means exploring new ways to generate revenue and the use of Permanent Fund earnings will need to be part of the solution. The vetoes must be closely examined by our elected officials: • The defunding of housing and services for families and individuals experiencing homelessness is inhumane. It’s estimated that the cuts to Brother Francis Shelter, Clare House, Covenant House and AWAIC in Anchorage will put hundreds of people out on the street adding to an already intolerable homeless population of 1,100. • Very low-income seniors will be pushed into homelessness with the loss of their senior benefits. • The closing of Head Start programs for low-income families will decimate the childcare now available to working parents and force many into public assistance. • Seven hundred professionals will be laid off from the University of Alaska Anchorage and 40 student programs will be shuttered. It’s estimated that 3,000 students will be directly affected. Whether a local government, business, nonprofit or individual, we all benefit when we are able to plan. Businesses want certainty in regulation and taxation, which in turn allows them to build strategy. Individuals base decisions like buying a house on what they expect their annual household income to be. Dramatic changes — the sudden repeal of a law or elimination of a job — can cause chaos, not just on an individual level, but across entire communities. Nonprofits are no different. They build their budgets each year using the best available data. When you cut expenditures for homeless services, housing, legal assistance, telecommunications and healthcare as dramatically as was proposed by Gov. Mike Dunleavy, our nonprofits will have to drastically change the way they do business, and they’ll have to do it overnight. It will be the financial equivalent of the 7.1 earthquake that hit Southcentral last November. But this time, there is no state or federal agency to step in and help handle the emergency. That’s because Alaska’s nonprofits handle emergencies on a daily basis as they are the stopgap between homelessness and having a place to rest your head. Between hunger and having a warm meal. The place that houses women and children who need a safe haven. Total state general fund spending has been cut from almost $7.8 billion in fiscal year 2013 to about $4.5 billion in fiscal year 2018. It is change that has been painful but measured in annual steps. As a result, systems in healthcare, education, resource management and the arts continue to serve Alaskans while adapting to our new reality. Massive cuts will dismantle, in just one year, services, organizations, and programs that took decades to build. These cuts are a priority of the governor, but what about Alaskans? Do these cuts represent the philosophies and beliefs of Alaskans? Given the high level of community support across the state for nonprofits and education, from the arts to services for the poor and vulnerable, it seems unlikely that the depth of these cuts represents Alaska residents’ beliefs. Rasmuson Foundation promotes a better life for Alaskans. Our mission guides us every day to be part of a solution that improves the quality of life for all Alaskans. We believe notice is critical for Alaskans to plan, make the hard decisions and adjust. Reducing spending — dramatically and on such short notice — will significantly diminish certainty and confidence in Alaska. We can and must do better. The budget, as reduced by the governor’s vetoes, does not embody the values of the Alaska we all support and love. Diane Kaplan is the president and CEO of the Rasmuson Foundation.

OPINION: The messianic arrogance of isolation

“Any Given Sunday” doesn’t seem like Gov. Michael J. Dunleavy’s kind of movie, but Oliver Stone’s outlandish take on pro football does have its moments of profundity. Late in the film after a game when his offensive line allowed him to take a beating over his bigshot attitude, quarterback “Steamin” Willie Beamen walks into the sauna occupied only by linebacker Luther “Shark” Lavay. “Yeah, you led,” Lavay says. “But did anybody follow?” The question, like most are when the answer is obvious, was purely rhetorical. Dunleavy’s support has shriveled in the Legislature to a handful of members mostly from the Valley while traditional Republican Party allies across the business community have either refused to defend him or have directly come out against his vetoes and the House minority holding the capital budget hostage in exchange for a statutory PFD. Dunleavy has led. But how many are still following as he stakes his office on a minority of legislators barely large enough to sustain his vetoes and the oftentimes hateful rhetoric of his PFD-or-bust base in the Valley? Rather than recognize the lack of support for his proposals as evidence of a need to change course, Dunleavy has chosen the path of Valley Rep. David Eastman, who also arrogantly takes his isolation as a badge of honor and proof of his messianic righteousness. Instead of attempting to be a governor for all of Alaska, Dunleavy has chosen to be the governor of District E. This outcome is what many who supported Dunleavy feared when he hired former Republican Party Chairman Tuckerman Babock as chief of staff cum wartime consigliere. And, not to belabor the references to movies starring Al Pacino, he has not governed like the cool-headed and savvy Michael Corleone but as a combination of Sonny and Fredo mixing vindictiveness with incompetence. Dunleavy’s single-minded focus on a $3,000 PFD has leveled the once high ground of sustainable budgeting and respect for the rule of law with his vetoes ranging from punitive to petty to preposterous. Not that the legislative leadership is blameless. Far from it. The aimless stewards of the House allowed the PFD issue to fester for months rather than addressing it or showing even a modicum of respect for the minority members whose votes they now need to fund the capital budget and overturn some or all of Dunleavy’s vetoes. The Senate is led by Cathy Giessel, who was perfectly willing to run on a full PFD with back payments when she faced a tough reelection battle in 2016. “There’s a difference between looking at options and grabbing someone else’s money,” Giessel told the camera in a video that is still live on her 2016 reelection Facebook page. “That’s what Gov. Walker did. He grabbed your money. That money grab didn’t solve anything. A money grab is not a solution. “Sen. Mike Dunleavy is proposing a solution that would give that money back to you. I support that solution and we’ll be working with him in January to see that done. You see, you deserve to have that money back. Alaska deserves a real solution to the budget crisis.” Alaska’s budget situation wasn’t any better in 2016 than it is now — in fact it was worse — but Giessel has done a complete 180 on what she successfully ran on just three years ago. In that regard, Dunleavy deserves credit for trying to deliver what he promised. But in reality the state is not with him as measured by the best possible indicator, which are the votes cast in the Legislature that he has been on the wrong side of all year. Dunleavy could have introduced a sensible four-year plan to gradually reduce government spending to sustainable levels but he blew his chance for real budget reform when he attempted it all in one bite and in such draconian fashion that he spawned the bipartisan majority in the House that has frustrated him at every turn. It’s been written in this space that the PFD is not a suicide pact, but right now Dunleavy and Babcock are mixing the punch with their Valley cohort and intending to force it down everyone’s throats if they don’t get what they want in spite of their lack of popular support. Time is running out for a compromise with the least fortunate among us being turned out to the streets and the University of Alaska declaring the equivalent of bankruptcy a month away from the fall semester. Dunleavy and his dwindling number of allies would do well to remember one more line from “Any Given Sunday” delivered by Pacino’s Coach Tony D’Amato to his players facing one last shot to keep their season alive: “Either we heal now, as a team, or we will die as individuals.” Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Dunleavy governing by coercion instead of persuasion

The Alaska Legislature’s failure to override Gov. Mike Dunleavy’s budget vetoes would be an interesting topic for a political science class if the consequences were not so devastating. Dunleavy has followed the path of minority rule, and minority rule in a democracy is always of interest to students of politics. How do you justify minority power over the majority and what mechanisms are available to implement it? In classrooms, students routinely are taught the importance of protecting minority rights. American history, students learn, is replete with controversies over the limits of majority rule. The U.S. Constitution itself was born of one of these controversies. In 1789, how could tiny Rhode Island protect itself from the behemoth next door, Massachusetts? Equal representation in the Senate was one way. The history of the struggle to end slavery can be seen as a protracted battle over of the property rights of the slave-holding minority. Slaveholders built an intricate intellectual and legal structure to maintain their minority power, backed by force. The American majority stripped them of their slaves not after debate but through violence — the Civil War. In Alaska, Gov. Dunleavy has the mechanism for minority rule over the budget — the veto — but does not have a majority of the Legislature behind him, nor a majority of the public. Legislators say they have received thousands of messages damning Dunleavy. Civic and business leaders have spoken out against the cuts to the university, Medicaid, public schools, the arts and old folks’ benefits. I would wager the majority of paid lobbyists, so often trashed for everything that smells in Juneau, are against the vetoes. They have too many clients who directly benefit from government spending and the stable political system Gov. Dunleavy upended. The governor’s oft-repeated justification for the cuts is: There is no choice. Government doesn’t have the money to do what it did in the past. Governments always have a choice, no matter how unpalatable. Subsidizing oil companies is a choice. Rejecting all forms of state taxation is a choice. Demanding a $3,000 Alaska Permanent Fund dividend while laying off thousands of workers is a choice. Gov. Dunleavy has said that it is fine by him if the cuts shackle government — and that is what he intends to do, while championing the genius of the free enterprise system as the solution to our difficulties. Whatever free enterprise can do, it will never respond rapidly enough to rescue teens whose college plans have been ruined. Don’t misunderstand; The governor has Alaskans who agree with him - maybe a third of the Legislature and a chunk of public opinion perpetually riled up about big government. In the 2018 election, the governor received 51.44 percent of the vote. It is a good guess there are people who picked Dunleavy who now think “I voted for the guy because he was the best choice at the time. I didn’t expect him to eliminate my job.” By governing via veto, Gov. Dunleavy has abandoned persuasion for coercion, and he has magnified his weaknesses in the rest of the legislative process. He can’t pass Constitutional amendments by himself. He can’t appropriate money by himself. Non-budgetary legislation he introduces will face a new level of scrutiny and hostility from burned lawmakers. Governors understand that they will make enemies. Bill Walker knew this when he reduced the amount of the Alaska Permanent Fund dividend. But governors rarely set out to make enemies as Dunleavy has. I have heard people say Gov. Dunleavy is a tool of the Koch brothers, the right-wing billionaires. There is some evidence for this, given Dunleavy’s relationship with the Koch-created group Americans for Prosperity. But however close Dunleavy is with the brothers, it is clear that he understands two of the core Koch beliefs, rarely expressed publicly by the Koch family members themselves but commonly heard from the university and think-tank intellectuals who have joined the Kochs. First, to succeed, you must use the legislative rules to maximum advantage and then change the rules to your advantage through Constitutional amendments. Second, killing major state-funded programs is never popular with a majority of voters. Too many people (“takers, not makers,” in Koch-speak) benefit from student loans, Medicaid, power cost subsidies. A referendum on dismantling the university would never pass. Gov. Dunleavy knew this when he began his veto review. The cries of pain were expected, even those of establishment Republicans like Senate President Cathy Giessel. Gov. Dunleavy has had his way, but he has paid a price - to his reputation, to public respect for his office. He has been especially hurt by his inability to either show (or fake) empathy for the people he is damaging. In candidate Dunleavy’s 2018 election-pamphlet statement, he concluded “Too many politicians have squandered the trust of the people with broken promises on the PFD, taxes, the budget, and other issues. I am committed to earning that trust back, the only way I know how; by keeping promises and commitments.” At the moment, Gov. Dunleavy’s trust department is earning a rate of return of about zero. Michael Carey is an Anchorage Daily News columnist. He can be reached at [email protected]

GUEST COMMENTARY: Governor holds UA future in hands with veto pen

In this austere budget environment, and after intense scrutiny, the Legislature passed a budget that includes a reasonable $5 million general fund reduction for the University of Alaska. In the next few days, the governor will decide whether the state will continue its investment in the university — allowing Alaskans of all ages to carry on, uninterrupted, with their vocational, continuing, or higher education — or veto a large portion of the UA budget. Make no mistake, the university cannot absorb an additional, substantial reduction in state general funds without abruptly halting numerous student career pathways mid-stream, eliminating services, or shutting down community campuses or universities. An additional reduction of even $10 million — on top of the $51 million in cuts we’ve already taken — will mean the discontinuation of programs and services with little or no notice, and that in turn will have ripple effects, damaging UA’s ability to generate revenue and causing even greater harm across the state. Severe reductions in state Undesignated General Funds, or UGF, as originally proposed by the governor would require closure of hundreds of programs and affect thousands of students. To provide context for such a reduction, $134 million is nearly the equivalent of the total UGF budget for University of Alaska Anchorage and UA Southeast combined. At that level we may need to cut whole programs or close one or more of our universities, UAA, UA Fairbanks or UAS. But a university system is not like a typical corporation or factory; it needs a critical mass of faculty with different specialties to provide a quality education. Eliminating whole programs to reduce costs does not eliminate our responsibility to affected students. We are obligated to complete their programs, which carries costs that delay any immediate savings. The university’s total budget this year is comprised of $327 million from the state (about 40 percent). The remainder comes from tuition and fees paid by our students, research grants and contracts, proceeds from land development, and private donations. However, those private revenue sources will inevitably be harmed if general fund support is reduced. Prior cuts have had the effect of reducing opportunities for our students and services to our communities, while increasing tuition. The cumulative reduction in the university’s budget of $195 million over the last five years has resulted in significant reductions in administrative staff and services, to the point that further reductions will compromise UA’s ability to meet its many obligations. Indeed, the university’s statewide administration, which provides consolidated support services, has taken a 37 percent cut over the last several years, almost triple the average cut across the university system. Still, the university remains a highly accessible and affordable path to an excellent education and the opportunities that only education can provide in the workplace. However, that will not continue with further substantial reductions. We have had numerous meetings with the governor and his team, demonstrating how the university has focused its mission, reduced costs, increased private fundraising, developed strategic plans with measurable goals, created a task force to look at the university’s structure, and developed an exciting vision for how the university enables Alaskans to create a strong and sustainable future for our state. The governor was receptive, and I think impressed with the work that’s been accomplished by the university. However, he may feel compelled to follow through with his original proposal to reduce the university’s appropriation. As a result, if the governor vetoes a substantial amount, I ask that you contact your legislator to request that he or she consider overriding that veto. The educational investments and opportunities for thousands of Alaskans will depend on it. Jim Johnsen is the president of the University of Alaska.

GUEST COMMENTARY: America’s energy, tech and defense future needs mining

As the recent trade war with China has escalated, Beijing has implied that it may retaliate by withholding rare earth minerals. Such a strategic vulnerability — and America’s alarmingly high reliance on imported minerals and metals — is now in the spotlight for all the world to see. China’s rare earth threat underscores just how perilous U.S. mineral import reliance has become. While rare earths are currently the focus, America’s overall reliance on imports of these minerals is indicative of a far larger problem. According to the U.S. Geological Survey, the U.S. is now 100 percent import-reliant for 18 minerals and metals, and 50 percent or more reliant for another 30. Despite ever-growing demand for these minerals and metals in defense technologies — such as stealth and night vision technologies — or consumer goods and green energy technology, U.S. import reliance has doubled over the past 25 years. Notwithstanding the nation’s vast mineral reserves, mining investment in the U.S., and production of essential minerals, has steadily declined. The atrophying of the nation’s materials supply chain shouldn’t just be chalked up to the march of globalization and large-scale economic integration. It’s also the product of a decades-long adversarial approach to domestic mining that can be seen in federal land-withdrawals and a mine permitting process that now regularly stretches to 10 years or more. Modern, responsible, and well-regulated mining should be encouraged in the U.S., not pushed aside. To meet the material needs of our advanced tech, manufacturing, energy, and defense sectors, America will need almost exponential growth in the mining and refining of a vast array of minerals and metals, many of which can be produced here at home. While materials recycling should be a key part of meeting this demand, it’s hardly a cure-all. It’s past time for the U.S. to place strategic importance on mining and the greater materials supply chain. China is already years ahead in this industrial arms race, prioritizing mining as a cog of its industrial policy. For example, China is the top resource holder for 10 of the minerals and materials vital to wind, solar and battery technologies. A new report from the Commerce Department stresses the urgency of action. It warns that the U.S. has become “heavily dependent” on foreign sources for 31 of the 35 minerals recently designated as “critical” by the Department of the Interior. While the U.S. has fallen far behind, there are signs of hope. Bipartisan legislation introduced by Sen. Lisa Murkowski and Sen. Joe Manchin, D-W.V., The Minerals Security Act, is an important step forward in responding to China’s dominance and beginning to right our supply chain. The legislation would streamline a variety of mine permitting and regulatory processes currently sapping U.S. mining competitiveness. Their leadership in beginning to address this issue deserves strong, bipartisan backing. The technologies of tomorrow — whether they’re energy technologies or the defense applications that keep us safe — are more materials-intensive than what they’re replacing. It’s essential we build a supply chain to support them. Failing to do so won’t just be an economic missed opportunity. It would be a geopolitical blunder that undermines our global leadership. The time for decisive action to encourage domestic mining, and rebuild our industrial base, has arrived. Retired U.S. Army Brig. Gen. John Adams served more than 30 years in command and staff assignments as an Army aviator, military intelligence officer, and foreign area officer in Europe, Asia, the Middle East, and Africa. He is president of Guardian Six Consulting.

OPINION: Ignoring session call latest offense for a scofflaw Legislature

The zombie legislative session that will not sine die staggers on aimlessly, consuming the brains of anyone trying to make sense of what’s going on and swallowing the souls of those still naïve enough to believe in following the laws as written. In the latest escalation of a race to the bottom, Senate President Cathy Giessel and House Speaker Bryce Edgmon have thumbed their noses at Gov. Michael J. Dunleavy’s call to a special session in Wasilla to decide the fate of the Permanent Fund dividend despite admittedly not having the votes to call themselves to Juneau. A great irony of the 31st Legislature will be going down in history as one that managed to pass a new tough-on-crime bill while simultaneously breaking as many laws as possible. The 90-day time limit on legislative sessions approved by voters? Pffft. The 35-year-old statutory formula for calculating the PFD? Yeah, right. No per diem without an operating budget? We didn’t really mean that. The law says the governor can choose the site of a special session? We. Don’t. Care. Most galling of all is that when the leaders of the Legislature decide to ignore a law they hide under the claim of constitutionality. Sometimes they don’t even bother going that far. “It’s a gray area,” Edgmon told James Brooks of the Anchorage Daily News about the leadership’s authority to ignore the governor’s call, but they plan to conduct some mutant combination of floor sessions in Juneau and committee hearings in Anchorage anyway. These leaders would be a lot more credible when it comes to defending their turf if they’d shown any competence at doing their jobs or a bare minimum respect for the laws they’ve passed. Instead, the scofflaws have only been emboldened over the past four years after escaping any repercussions for skipping out on their lease at the Downtown Anchorage Legislative Information Office under the guise of the “subject to appropriation” clause. The result of that decision is that the Legislature has spent $24 million on the Wells Fargo bank-turned-LIO but still has no place to actually conduct a special session in a single building on the road system. Many people cheered that decision to abscond from the Downtown office and leave the owners to face foreclosure on a $28 million loan taken out on the faith and credit of the Legislature, and likewise approved of the subsequent refusal of former Gov. Bill Walker to fully pay off the year’s balance of refundable oil tax credits without any warning to banks or the industry. The owners knew what they were doing, some argued. The companies knew the terms, some excused. Now some of these same folks are squealing about not following laws governing the PFD or per diem. Only now do they realize that just because something is legal doesn’t make it right. Only now may they realize that the decision to take the easy way out on the Anchorage LIO without really saving any money was the gateway drug to funding government by cutting the PFD. Once the Supreme Court enabled the Legislature to ignore its formula on the PFD, it has been a free-for-all on gimmicks and budget shortcuts and disregard for the law, even those that are barely a year old. Their “solution” to the tax credit liabilities ran afoul of constitutional questions and is headed for the Supreme Court. So is their claim about the legality of forward “funding” of education without actually funding it and their assertion that they don’t have to convene a session according to the governor’s call. Perhaps it’s only fitting that the Legislature keeps getting dragged into court. That’s where most scofflaws eventually end up. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Narrative of fear doesn’t need facts to win

Alaskans know that the future of our state depends on our ability to responsibly extract natural resources. Perhaps more certainly than citizens of any other state, we understand how our economy and livelihood depends on whether we are allowed to utilize our own land as we please, without interference from the Lower 48. That’s why recent attempts from some politicians in Washington to limit the rights of Alaskans are so counterproductive. Just last week, Former Vice President Joe Biden rolled out an energy plan that included a ban on offshore drilling in the Arctic. Senators and representatives from states like Rhode Island and Maine – Republicans included – have rolled out legislation to do the same. Recent history suggests that every major development in Alaska will be “controversial” going forward. The proposal to expand Alaska’s economy by permitting responsible development in ANWR is just one example. Yet there is nothing wrong with that word; it simply means there are strong opinions on both sides. But “controversy” isn’t a reason to stop progress. Here’s why: Every major development will be met by a narrative of fear perpetrated by its opponents, often environmental activist groups. Stoking fear is the easy way to try and halt development. It doesn’t rely on winning the facts or making the best case – it’s all about denigrating opponents and being the loudest voice in the room. The funny thing that typically accompanies these fear-inducing declarations? They’re nearly always ended with a plea for campaign donations. Environmental activists do this because it works. Fear-mongering produces a fortune for the groups who use them. In Alaska, we’ve seen these narratives since before I was born. In 1968, with the plan to build the Trans-Alaska Pipeline System underway, eco-groups wrongly predicted the end of caribou herds and the destruction of the pipeline due to earthquake activity, and the demise of Alaska Native cultures. Check your watch – it has been 51 years, and none of those have happened. You may look at those predictions now and see them as absurd, but many believed them in the moment. After all, those statements preyed on many peoples’ fears. Eco-groups are using the same tactics today, but with even larger platforms on social media, e-mail blasts and online-organized activist rallies. They use these tactics to stifle development, often by trying to halt the already-long permitting process that accompanies major projects. There are rules for approving resource projects. Lots of requirements. Lots of time for the public to weigh in. The rules tell you the terms and how to prepare. For mines, there is a book printed by the Environmental Protection Agency, titled EPA and Hardrock Mining: A Source Book for Industry in the Northwest and Alaska. This book outlines the requirements for pursuing approval for mining projects, and knowing the information in the book is critical to the prospect of having any mining opportunities in our state. It simply costs too much money and time to enter a project without a clear understanding of the requirements. For those willing to undertake the process, years and several million dollars (at a minimum) of scientific and technical work will be required. Impact studies must be done, branches of the federal government must approve, and the public has plentiful opportunities to comment. All this must be done while fending off the alarmists hard at work on their narrative of fear. As Alaska’s future resource opportunities develop, here’s hoping that the activist groups who speak factually-inaccurate, emotionally-charged fear in hopes of dimming Alaska’s bright future are seen for what they are. If fear is given credence over fact, Alaska will lose out on significant opportunities. Rick Whitbeck is the Alaska State Director for Power the Future, a nonprofit advocacy group focused on energy and resource development.

GUEST COMMENTARY: US must end reliance on imports for critical minerals

Americans recently woke up to the news that China is threatening to cut off supplies of “rare earth” metals to the United States. It’s a troubling situation. But such alarming headlines could finally motivate Washington to rectify a longstanding problem: America’s growing dependence on imported metals and minerals. It may all sound a bit obscure. But these resources provide the building blocks for everything from electric motors to medical equipment. And the Commerce Department just warned that the United States has become “heavily dependent” on foreign sources for 31 of the 35 minerals designated as “critical” by the Department of the Interior. And 14 of the minerals considered “critical” by the Department of Defense are only available overseas. We use many of these minerals every day. The average smartphone contains copper, gold, platinum, silver, graphite, and tin oxide. Solar panels require gold and silver. Electric vehicles need cobalt, zinc and lithium. And wind turbines use copper and molybdenum. Fortunately, America possesses an estimated $6.2 trillion in mineral reserves, and our reliance on China and other countries shouldn’t even be happening. America’s mining sector also uses more environmentally responsible practices, and under more stringent regulation, than competitors in China, Kazakhstan, Turkey and many other countries. China also utilizes subsidies for state-influenced companies, shoddy environmental practices, and market manipulation to drive U.S. competitors from the market. Beijing can drive prices down to put others out of business, then restrict supplies and control prices at will. As a result, less than half of the minerals used by America’s manufacturers are actually sourced domestically. Back in 2014, a survey found that 90 percent of U.S. manufacturing executives were concerned about obtaining needed minerals in a timely manner. The problem has only grown worse. In 2010, Beijing used market control as a weapon, cutting off rare earth mineral shipments to Japan. And the World Trade Organization has ruled that China gives preferences for mineral supplies to its own state-owned manufacturers while discriminating against the U.S. and other countries. Complicating matters is that it now takes as long as seven to 10 years for a U.S. mining operation to get the permits needed to launch new operations. In contrast, mine permitting in countries like Australia and Canada — with comparable environmental standards — takes only two to three years. Washington must find ways to streamline this process in order to begin responsibly extracting the key resources needed for the products we use every day. If U.S. manufacturers are to supply consumers with American-made products, they’ll need more timely access to reliable mineral sources. But many of the nation’s existing mines are reaching the end of their useful lifespan. Washington urgently needs to update rules and incentives for faster, more responsible, and more innovative extraction of mineral resources that benefit domestic workers, companies, and national security. Michael Stumo is CEO of the Coalition for a Prosperous America.

OPINION: Legislature should drop pointless education fight

In a rare display of bipartisan and bicameral unity, the leadership of the Alaska House and Senate took a break from not accomplishing anything to hold a press conference on May 28 announcing their intent to sue Gov. Michael J. Dunleavy if he follows through on his belief that the Legislature has not properly funded K-12 education for the 2020 fiscal year that begins July 1. Dunleavy, backed by a legal opinion from Attorney General Kevin Clarkson, has asserted that the Legislature’s attempt to “forward fund” education in a bill passed in 2018 is unconstitutional as an improper dedication of funds and an end-run around his line-item veto authority. Having repeatedly failed to accomplish its One Job of passing a budget within the time constraints of a regular session and triggering layoff notices from school districts who require funding certainty, the Legislature passed House Bill 287 that paid for K-12 education in fiscal year 2019 and called for an equal appropriation to be made in the 2020 fiscal year. The problem with that, Dunleavy’s administration argues, is that the Legislature appropriated money it doesn’t yet have in the General Fund, and therefore it is a dedication of funds prohibited by the state Constitution, and by doing so it robs him of his authority to veto spending in the upcoming fiscal year. There is certainly no question that the Alaska constitution created a powerful executive branch, particularly in regards to spending. A two-thirds vote is required to override a veto on regular legislation, but a three-fourths majority is necessary to override a veto on spending. While Clarkson has released a nine-page memo defending the administration’s position, the Legislature has not offered any similar legal analysis backing up its assertion of power other than an argument that boils down to “we say we can.” Perhaps emboldened by the Supreme Court decision in the lawsuit over former Gov. Bill Walker’s 2016 veto of half of the Permanent Fund dividend appropriation that gave legislators carte blanche to ignore the laws they have passed, they may now similarly believe they can usurp the governor’s constitutional role in the budget process. Taking the Legislature’s assertion of forward funding power to a logical conclusion, they could have passed a 10- or 20- or 100-year education funding bill and as long as lawmakers never touch the bill they could put a billion-plus dollar budget item on autopilot and outside the reach of Dunleavy or any future governor. That’s going to be a tough argument to make at the Supreme Court, and despite their protestations to the contrary, this is not a settled legal issue. The administration’s position is not unreasonable, though if it comes to it and he follows the AG’s opinion and does not transfer funds after July 1 it will surely be portrayed that way. The Department of Law attorneys who testified told the Legislature had the money been called for to be appropriated in the current year on June 30 they would regard it as legal. Similarly, had the Legislature appropriated money from a fund that actually has money such as the Permanent Fund Earnings Reserve Account, the administration has stated that, too, would be legal. House Bill 287 did neither of those things. It appropriates money not yet in the Treasury and calls for it in a future fiscal year, which certainly raises the dedicated funds issue. Dunleavy has promised not to veto education funding if the Legislature puts language in the current budget; he would fail even if he tried as the House Minority Republicans already called for status quo K-12 funding that would be enough to override his red pen. The legislators who support HB 287 said they did it to ensure stability for school districts, but their decision to dig in over an untested power is only causing more disruption. With far bigger problems to address regarding unsustainable spending and the dividend, their refusal to abide Dunleavy on this issue and thus guarantee K-12 funding for the upcoming year shows they are actually more concerned with defending their turf than they are in preventing pink slips from going out. Andrew Jensen can be reached at [email protected]

UAA alums make a difference — nominate an Achiever today

Last weekend, more than 1,200 students graduated from the University of Alaska Anchorage. As they walked across the stage and toward their futures at Sunday’s Commencement ceremony, I watched them join the ranks of more than 53,000 UAA alumni, most of whom live and work in the state. I am confident the class of 2019 will, like those who came before them, make a difference not only in Alaska’s economy, but also in its communities. UAA alumni are leaders and business owners; they are our dental hygienists, nurses, journalists, police officers, K-12 superintendents, university professors, petroleum engineers, welders, diesel mechanics, pilots and earthquake engineers. They are also our neighbors, nonprofit board members, community council leaders, legislators, and friends. They are being recognized nationally and internationally. Recently, Samantha Mack was named UAA’s first-ever Rhodes Scholar, Eagle River teacher Valerie Baalerud won the Milken Educator Award, and alumna Megan Green received a Fulbright Scholarship. Local employers recognize the value of UAA-educated graduates. Companies like R&M Consultants, an Alaska-based consulting firm with a workforce comprised of 30 percent UAA graduates, understand how important it is to provide by-Alaska, for-Alaska services. R&M employs nearly 100 people in Anchorage and Fairbanks to provide civil, structural, waterfront, and geotechnical engineering; UAA graduates’ depth of knowledge in engineering for cold weather is invaluable. Nearly every industry in the state benefits from the students that walk across the UAA stage. The Anchorage School District, the State of Alaska, GCI, BP, ConocoPhillips, Southcentral Foundation, Providence Health and Services, Alaska Airlines, and, of course, UAA, are among the employers hiring the highest numbers of UAA graduates. Here at UAA we work to recognize the successes and contributions of our alumni. Since 2010, UAA has honored nearly 30 Alumni of Distinction in our community. The Alumni of Distinction Awards recognize and celebrate those who have made important contributions in their communities and whose actions honor the legacy of excellence at UAA. Leaders like Sophie Minich, CIRI president and CEO, Tim Gravel, Kaladi Brothers Coffee CEO, Jennifer Thompson, Thompson &Co. PR president and CEO, Carol Comeau, former superintendent of the Anchorage School District, Roald Helgesen, CEO of the Alaska Native Tribal Consortium, and Ted Trueblood, a longtime Alaskan and civil engineer, are just a few of the many great individuals who have earned this prestigious award. As it happens, nominations are now open for the 2019 UAA Alumni of Distinction Awards. Anyone in the community can nominate UAA alumni for these distinguished awards. Do you know someone who deserves to be recognized for the work they do in their community? UAA also continues to grow and deepen our community connections through our honorary degree and meritorious service award program. At commencement last weekend we recognized four community members for their significant and lasting contributions to the university and the state of Alaska: Bede Trantina, Sheila Toomay, Barbara Hood and Dr. Thomas Nighswander. These outstanding individuals join the growing and strong network of UAA alumni and friends who make a difference in our community and state everyday. UAA’s commitment to and partnership with Anchorage and extended Southcentral communities is deep and permanent. As this new class enters the workforce, we are excited to see where they will end up, and how they will change their communities, and our state, for the better. A new generation of leaders is emerging and together our community and our university will grow. In a few years we might see some of the 2019 class back on campus for their own Alumni of Achievement awards. I am proud to be part of an institution that produces so many of Alaska’s leaders and change-makers. If you know someone deserving of the Alumni of Achievement Award, contact the Office of Alumni Relations or visit www.uaa.alaska.edu to learn more about the nomination process. Nominations are due by 5 p.m. on Monday, June 17. Megan Olson is vice chancellor at the University of Alaska Anchorage.

GUEST COMMENTARY: Unite to rebuild infrastructure for Alaska and the nation

“Gridlock.” “Dysfunction.” “Stalemate.” In recent years, all of these words have been used in reference to Washington – especially after the 2018 elections created a divided Congress. It’s true that the partisan divide has oftentimes made it difficult to get things done, but it doesn’t have to be that way. This Congress, Republicans and Democrats from districts across the country have an opportunity to find common ground on an issue important to all of us: infrastructure. As former chairman of the Committee on Transportation and Infrastructure, I understand how important strong roads, ports, and bridges are to my fellow members and their constituents. Robust infrastructure is essential to a strong economy, and when the economy is booming, we all benefit. Improving America’s infrastructure could be the shot in the arm needed to take an already booming economy into overdrive. According to the Council of Economic Advisers, the economy could grow at an additional 3 percent if Congress comes together to pass major infrastructure legislation. However, any successful bipartisan infrastructure bill will need to address a range of issues currently facing our airports, harbors, and roads. First and foremost, Congress must come to an agreement on funding and find a way to fix the Federal Highway Trust Fund for the long-term. The Highway Trust Fund is in danger of becoming totally insolvent, and if you’ve seen the condition of some of Alaska’s highways – including the Alaska-Canada highway – you know how critical it is to stabilize this important funding source. Recent Congressional Budget Office estimates report that the Federal Highway Trust Fund will run out of money by 2022, making reform even more urgent. If we’re going to fix the Highway Trust Fund, we must be willing to consider all available options. Revenues from the federal gas tax have been steadily decreasing as our automobiles become more fuel efficient, and there are more electric vehicles in use, and dollars don’t buy as much as they once did. Just a few years ago, the federal gas tax collected $39 billion in revenue, but needed to support $52 billion in program commitments. The imbalance between revenue collection and highway spending is unsustainable, and only makes it more difficult for Congress to make progress on delivering the infrastructure that America needs. The most obvious solution to this problem is to simply raise the gas tax and adjust it for inflation. However, this simply wouldn’t generate enough revenue as cars are less reliant on gasoline than ever before. Another suggested solution is to initiate some type of user fee or vehicle-miles-traveled, or VMT, tax, which has seen some success in various states that have started pilot programs to test the viability of this solution. Methods to administer such a program on a nationwide scale are untested, and it would be important to ensure that constituents in rural states such as Alaska are not disproportionately affected by a user fee or VMT tax. Regardless of the method used, the fact of the matter is that both Republicans and Democrats want to fix the Federal Highway Trust Fund, and for the sake of the constituents who sent us here, we need to get it done. Rapidly-advancing technology is also improving lives across the world, and Congress should be prepared to not only harness this new technology to improve our infrastructure, but to develop a regulatory approach that keeps Americans safe, but doesn’t hamper innovation or further progress. The promise of companies like Amazon making unmanned deliveries via drone, or Tesla producing self-driving cars represents a new frontier in infrastructure and commerce, but also raises new safety concerns. In any new infrastructure effort, Congress must resist the urge to overregulate these technologies and instead opt for a light-touch approach that finds a regulatory balance while protecting public safety. Another focus that a potential bipartisan infrastructure package must also address is the lengthy permitting and project delivery process that has left so many projects in limbo. Time is money, and implementing oversight and looking for ways to eliminate unnecessary delays saves hard-earned taxpayer dollars. Environmental impact statements – though needed – can cause unnecessary delays, and create cost overruns that threaten entire infrastructure projects. President Trump and congressional leadership on both sides of the aisle must come together to reform the permitting process to better streamline project delivery while still protecting our environment. Project management is vital for the efficient completion of large infrastructure projects and if we are serious about putting together a robust infrastructure package, management standards must be considered in the legislation to ensure taxpayer dollars are not wasted. As Dean of the House, I’ve been fortunate to play a role in major, bipartisan wins for Alaska and our country. I firmly believe that this divided Congress has the opportunity to reverse the trend of crumbling roads and bridges, and finally get major infrastructure legislation passed. This year let’s finally break the gridlock, lose the “dysfunctional” label, and send an infrastructure bill to the President that our constituents can be proud of. Our communities and our economy depend on it. Rep. Don Young is the longest-serving member of the U.S. House of Representatives and submitted this column to mark infrastructure week May 13-20.

GUEST COMMENTARY: Tesla’s warning highlights the eco-left’s hypocrisy

Tesla, the world’s current “it” auto manufacturer, is concerned. Their American-made electric vehicles, or EVs, require steady supplies of mined materials: lithium, copper, cobalt and more. And our current capacity might not be enough. Sarah Maryssael, Tesla’s global supply manager for battery metals, reportedly warned at a closed-door industry conference last week that a global shortage of critical EV components is coming. Tesla is warning of “long-term supply challenges” because of “underinvestment in the mining sector.” Tesla is right to be concerned about underinvestment in the mining sector, but who should they be concerned with? We need to be asking why hasn’t there been enough investment when we know the need for these elements is coming? The answer is simple: the environmentalist movement. For years, environmental groups have worked to raise the cost of opening new mines, especially here in Alaska, where we have plentiful opportunities. They threaten lawsuits, file legal actions, bring in protestors — actions that cumulatively make it more expensive and more difficult to open new mining facilities. And here’s the crazy part: The same environmental activists who are trying to push “green” energy and transportation are the people fighting the mining activities that can help make it happen. It’s hypocrisy at its finest: they demand green energy but protest the resources needed to make EV’s and battery storage a reality. In Alaska, for example, the public outcry from environmentalists against the Pebble mine has been deafening. Eco-activists say we must choose between mining and fishery health, and they have relentlessly pursued all means necessary to shutter Pebble before it has a chance to work through the permitting process. Don’t forget, Pebble would be primarily a copper mine — one of the inputs that Tesla is warning could face shortages. The same environmental extremism has begun against the whole of the Ambler Mining District, an area in Northwest Alaska that holds world-class deposits, because it will take a new road through state and federal lands to access the projects. The Aktigiruq deposit features zinc, gold and lead. Arctic VMS has identified copper zinc, lead, gold and silver in its deposit landscape. Bornite has significant copper and cobalt resource potential in its claim area, while Taurus has notable deposits of copper, gold and molybdenum. Graphite Creek has the largest large-flake graphite deposit in the U.S. All of these projects would help in one way or another to improve output of materials needed to build a more robust green energy world. If the eco-activists had their way, these resources would remain in the ground. Their protests then make no sense. Will the environmental extremists cede their moral high ground, stop fighting against the mining industry, and realize that resource extraction actually serves their goals in the long run? My guess is no. To do so would be to give up a potent fundraising method used to vilify responsible resource extraction, and the energy workers who are employed at those projects. Environmental groups in Alaska and abroad should heed Tesla’s warning. America can lead the way, develop our resources and create the inputs needed for new, low-cost forms of energy and storage — if only these groups would stand aside. Rick Whitbeck is the Alaska State Director for Power The Future, a nationwide non-profit focused on supporting energy workers, while pushing back on radical green groups and the ideologues who fund them. Contact him at [email protected]

GUEST COMMENTARY: A dividend Alaska can afford

During the May 1 Senate floor debate on the state budget, I offered an amendment to reduce this year’s Permanent Fund dividend from the proposed $3,000 to a more reasonable $1,200 per Alaskan. My reasoning was simple and practical: a $1,200 PFD is one Alaska can afford. It’s a matter of simple math. A $3,000 dividend leaves a gaping $1.2-billion deficit, while a $1,200 dividend would balance the budget and allow funding of core state services at sensibly reduced levels—all while providing a reasonably-sized dividend more in line with the PFDs Alaskans have received over the decades. A $1,200 dividend also keeps a promise the Legislature made to Alaskans just last year. With the passage of Senate Bill 26, we restructured the way Permanent Fund earnings are fundamentally managed and placed into law a fixed annual transfer of roughly 5 percent from the Fund to the state treasury. The goal was simple: protect the $65-billion Permanent Fund itself while creating a sustainable, long-term revenue stream — one that allows for a healthy PFD and helps pay for core state services like education, public safety and infrastructure. But by putting the state on course for a $1.2-billion deficit, a $3,000 dividend is anything but healthy. We have three basic options to close the budget gap created by a $3,000 dividend: 1. Cut another $1.2 billion from the budget. While I strongly support continued downward pressure on the budget, we need to continue making sensible, managed, multi-year reductions so we don’t send the state’s economy into a tailspin or cut core services too deeply. 2. Raise $1.2 billion in new revenue, which means either doubling oil and gas taxes or levying a hefty new income and/or sales tax on Alaskans. But to me it doesn’t make sense to torpedo the oil and gas industry with a massive tax increase or to tax Alaskans heavily with one hand just to send out a big dividend with the other. 3. Pull $1.2 billion from our dwindling cash reserves, which means either wiping out most of what remains of the state savings account or drawing from the Permanent Fund Earnings Reserve, a move that will reduce future dividends and our ability to fund core services down the road. Option three — a $1.2 billion draw from the Earnings Reserve — appears to be the course plotted by the budget just sent to the House for concurrence. This move prioritizes a super-sized PFD this year over safeguarding a reasonable dividend for future generations and providing funding for schools, law enforcement, roads, and other essential state services for years to come. The good news is that the budget is not yet finalized. The differences between the House and Senate versions of the budget — including the size of the PFD — will now get worked out in a conference committee. My hope is that a budget that considers the long game will prevail and a balance will be found between reasonable budget cuts, preserving state savings accounts, and paying a dividend Alaska can afford. ^ Chris Birch represents Senate District M, which includes South Anchorage and the Lower Hillside.

OPINION: Anchorage digs into couch cushions for camp cleanup

“Budgets reflect values” is a popular axiom of those who believe in government solutions to society’s problems, but whether that is true or not, budgets certainly reflect priorities. In that respect, the Anchorage Assembly can hardly claim that addressing the city’s homeless crisis has been reflected in the budgets it has approved over the last several years. The 2016 budget, for example, listed as a goal to “Eradicate homelessness and improve the health of the community.” The main source of funding that year was a one-time federal grant of about $425,000 from Housing and Urban Development. In 2017, the “Eradicate homelessness” goal appeared again, this time funded by about $339,000 in HUD grants. The 2018 municipal budget for homelessness initiatives was $500,000 between grants and matching funds. For the 2019 budget, with the Assembly and Mayor Ethan Berkowitz lobbying hard for voters to approve a 5 percent alcohol tax, once again a mere half-million dollars was appropriated split between $350,000 for homeless initiatives and another $150,000 for illegal camp cleanups. After voters rejected the tax and its supporting campaign of singling out a group of people and one industry as the most politically-expedient target for generating revenue, the Assembly has dug into the couch cushions to find another $355,000 to put toward homeless initiatives with $185,000 for the overflow shelter and an extra $150,000 for illegal camp cleanup. With about $855,000 now earmarked this fiscal year for homeless initiatives and illegal camp abatement, that represents a whopping 0.16 percent of the municipal budget of some $526 million. The total budget for illegal camp removal represents five one-hundredths of a percent of the budget. A charitable view of the budget would be that the municipality simply lacks the resources to deal with the homeless crisis absent a new source of revenue. A cynical view would be that the municipal government is using its failure to deal with illegal campsites as leverage over the taxpayers to compel them into voting for higher taxes. Much like the deteriorating homeless situations in Seattle, San Francisco and Los Angeles, the Anchorage greenbelts did not turn into Sherwood Forest overnight. Busy intersections littered by trash and the occasional piece of furniture did not spring out of thin air. Rather, the cruelty of compassion and misguided tolerance over many years has allowed this takeover of our public spaces at the expense of safety and the rights of the law-abiding to freely enjoy a city with another stated goal to be the best place to live in America by 2025. Instead, we have resources being dedicated to creating a 106-page “climate action plan” that won’t make a speck of difference in global temperatures even if the municipality took its carbon footprint to zero. Also coming down the pike this fall is the implementation of the plastic bag ban in another all-time great example of virtue signaling with no discernable benefit. If the plastic crusaders were truly concerned about waste entering our oceans, they would make it a priority to address the mountains of trash along the greenbelts of Anchorage creeks that flow into Cook Inlet and eventually the Pacific Ocean. If the mayor and Assembly want money for a new shelter, they should put it on the ballot along with all their other capital projects like schools or fire stations. If they want people to trust them with up to $15 million per year in new revenue, they should put a sunset clause on it as an incentive — and a promise — to deliver results. But what they should stop doing is pretending they are doing everything they can when the budgets they approve say something far different. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: University of Alaska needs support from Legislature, governor

There’s been much discussion and debate about the appropriate amount of state support for the University of Alaska. As a “finance expert” with specific knowledge of University of Alaska (as a graduate, as adjunct professor at more than six campuses, and as a former UA vice president of Finance from 2000-06), I support reasonable state services and budget support for them, but not by draconian and dysfunctional cuts while paying out what I consider extraordinary PFD payments. The Permanent Fund Earnings Reserve can be a source of moderate budget support while downsizing and making public services more efficient over time while we work on other budget and service discipline and broader based revenue enhancements in a methodically planned, strategic and tactical manner. This is true for the university budget, and I agree with President Jim Johnsen that deep cuts will permanently and significantly harm an already challenged fiscal scenario for UA. Knowing that some cuts will be inevitable, I urge them to be minimal and for the governor to respect what is reported out of the Legislature. My wife and I have personally given significant contributions (including funding an endowment) to UA and while serving as an executive officer of various banks and Native corporations I advocated for and successfully influenced millions of dollars of private sector contributions to UA. I intend to continue to do so. I also served as treasurer for the UA Foundation and was a trustee for several years advocating for private support and advanced fiduciary investment practices and entrepreneurial partnering, intellectual ownership and competitive research. I also worked on the university’s land grant issue, trying to gain equity for UA, which is long overdue and currently nowhere near equitable when compared with other states. In short, I know from personal experience that there is no short term funding alternative to supplement the state operating budget support for UA, though everyone continues to seek alternative revenue solutions, operating efficiencies and reductions in redundancy of significant and heretofore mandated services in multiple locations. The university gets it and will work toward the gradual realignment necessary to modernize the system. I also voice support for a single appropriation to the university. While legislative intent and administrative direction to elevate workforce development is a worthy objective, the strategy to bifurcate direction through separate appropriations is a crude, ineffective and inefficient manner to achieve such a goal, in my opinion and in prior past experience. Managing budget allocations and oversight/approval by the Office of Management and Budget is not efficient, effective or motivational. I fear that political, regional and rural funding acrimony will result in reduced financial security for the community campuses — the opposite of the desire intended. The job of allocating limited resources and preserving or enhancing outcomes is more efficiently left to the Board of Regents and the executive teams representing UA (and especially community campuses) and adhering to legislative/executive influenced direction. I have worked closely with all regions and major academic units of UA and especially with the Schools of Management, College of Business and Public Policy, ISER, the Small Business Development Center and the Business Enterprise Institute. I cannot emphasize enough how linked and supportive our UA system is to our state and our citizen success and hope that our legislative and government leaders can and will support UA. Governor, please support the appropriation efforts of the Legislature to keep UA from permanent harm due to lack of funding – for our children’s sake and for our own. My advocacy and my plea is both personal and professional. I am convinced that UA will be making extraordinary consolidation and efficiency moves to keep it a viable solution to higher education needs in our state. Joe Beedle, retired, is the former President and CEO of Northrim Bank.

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