State of our state

Gov. Bill Walker touched on expected themes in his annual state-of-the-state address to the Legislature last Thursday, sounding an upbeat note over recent oil discoveries, increased production and progress on the gas pipeline, but warning of consequences if lawmakers fail to enact a comprehensive plan to deal with the state’s finances.

Because of its natural resources Alaskans are in an enviable position to determine their own destiny, “But if you don’t make tough decisions now to plan for the future, you leave that destiny to chance,” the governor said.

Alaska is the only state in the U.S. where Congress gave ownership of lands and subsurface resources to spur economic development. Substantial benefits have been enjoyed because of the resource endowment, and a new agreement with Chinese groups on a long-planned Alaska natural gas project will lead to a new chapter of economic growth based on large natural gas deposits on the North Slope.

Walker credited the Legislature for creating the Alaska Gasline Development Corp., the state gas corporation, and the late Dan Fauske for getting AGDC up and running. North Slope producers asked the state, through AGDC, to take the lead on the gas project, the governor said. The governor said he recently met with Chief Executive Officers of the three North Slope producing companies to reaffirm their commitments to sell gas for the project, and he noted President Donald Trump’s new fast-track federal permitting initiatives will help the project.

“We will have a strong Project Labor Agreement in construction, and Alaskans will be the first in line to get jobs,” he said. The governor noted how his working in construction on the Trans Alaska Pipeline System in the 1970s helped pay his way through law school and to launch a career, and felt the gas pipeline can do a same for a new generation of Alaskans.

On the state’s role in fostering other development, the governor cited infrastructure investment to unlock access to resources as a critical mission. That was a reference to initiatives like the Ambler minerals resource road in northwest Alaska where the state development corporation, the Alaska Industrial Development and Export Authority, is leading the permitting effort for a road, although mining companies would pay for it through tolls.

The governor noted new records being set for tourism in the state and the importance of the state’s fisheries. He also mentioned his “priority to the protection of healthy salmon habitat for the benefit of all users,” an indirect reference to a pending fight over a salmon habitat protection initiative that is mainly aimed at the proposed Pebble copper and gold mine. Walker did not mention Pebble, however.

He mentioned the importance of agriculture and the growth potential for this small Alaska industry if more food can be grown to meet in-state needs, which would reduce dependence on imports. “We don’t have to create a market for agriculture. We are the market,” the governor said. On rebuilding the state’s forest products industry Walker said the state filed, on Thursday, a petition with the U.S. Dept. of Agriculture to begin new rulemaking to end the “roadless” regulation that is thwarting harvesting in Southeast Alaska’s Tongass National Forest.

Walked cited improvements in relations between the state and Alaska’s Native tribes, an effort Lt. Gov. Byron Mallott has led that included creation of a governor’s tribal advisory council and the first state-tribal compact on Alaska Native children adoption and between the state Office of Childrens’ Services and tribes over children placed in foster care. He noted the effects of climate change in Alaska and the recent creation of a state climate change task force to make contingency plans for climate related impacts on communities.

The paralysis over a fiscal plan is the cloud on the horizon, however. “We are the only state in the union where there is no connection between the people and their public services, the only state running huge deficits and the only state giving away money through a PFD,” Walker said.

A step in correcting this will be the Legislature’s approval of a “modest, temporary tax,” Walker said, a reference to his proposed wage, or employment tax, which would be in effect for only three years. He cited the link between new revenues the tax would bring and a proposal to spend $800 million in state funds over three years to tackle a backlog of deferred major maintenance projects on state and university buildings and schools.

Ports and harbors are included in the plan, which would include the first phase of a major rehabilitation of the Port of Anchorage.

The $800 million would total $1.4 billion when other funds, including federal and local, are added to the state contribution. The deferred maintenance backlog now totals $1.8 billion.

On the larger fiscal issue, “There are still people who believe we can solve this problem by only making budget cuts,” the governor said.

“This is a view held by people who see state workers as just bureaucrats who punch in and out and make no contribution of value. I urge people holding that view to have a conversation with state troopers who have seen their numbers cut,” or state workers helping families affected by the recession.

“A fiscal plan on spending cuts is no plan at all,” Walker said.

Tim Bradner is editor of the Alaska Legislative Digest and is Atwood Visiting Professor of Journalism this spring at the University of Alaska Anchorage