Junket to Norway, United Kingdom illustrates flaws in recently-passed oil giveaway
ANCHORAGE: Sean Parnell's trip to Norway and the United Kingdom unwittingly confirmed criticisms of SB 21. Yesterday, Parnell tweeted “UK is seeing results of tax reform, billions in new investment and jobs,” and put out a press release touting his visit to Norway and Great Britain. Unlike the Parnell giveaway, Great Britain only offers development incentives for new oil, not existing legacy fields. Norway charges oil companies higher prices to extract oil and has built a larger Permanent Fund than Alaska's in less time.
"Norway and Great Britain illustrate why the oil giveaway is bad for Alaska," said Mike Wenstrup, Chair of the Alaska Democratic Party. "Parnell ignored the Norway model of saving oil revenue and the British model of focusing incentives on new oil production."
Norway reaps 78% of profits from oil production. Before SB 21 passed, Alaska received approximately 68-72% of profits based on recent oil prices; now we receive less. By charging oil companies more for the privilege of oil extraction, Norway has built a $700 billion Permanent Fund in less time than it took Alaska to create a $46 billion Permanent Fund. In addition, Norway invests directly in new oil exploration. Democratic Senators proposed such direct investment with SB 50, and Senator French offered an amendment to SB 21 which would have established it. Senate Republicans rejected these proposals in favor of money-for-nothing giveaways for existing oil from legacy fields.
Following his recent trip, Parnell claimed Alaska should emulate Great Britain's oil price structure. In fact, Great Britain only cut prices paid by oil companies for new oil. Under the British system, companies must apply for the credit and explain how they are increasing production. In contrast, oil companies get money for doing nothing under SB 21, which not only lacks incentives for new oil but also gives away money even if oil companies produce less of it.
Parnell’s press release touting European oil pricing systems can be read here: (http://gov.alaska.gov/
FOR IMMEDIATE RELEASE
April 12, 2013
CONTACT: Zack Fields
Spending growth and revenue reductions will lead to massive deficits
ANCHORAGE: The Parnell-Treadwell Administration has created a perfect storm of operating budget spending increases and multibillion dollar revenue cuts, all but guaranteeing long term state budget deficits and drawdown of Alaska’s budget reserves. Since Parnell took office, state operating spending has grown approximately 35%, not including one-time capital expenses. Parnell-Treadwell took a $5 billion surplus and has turned it into annual deficits. SB 21 would make the Parnell-Treadwell deficits worse by eliminating approximately $1billion of revenue annually, which represents some 10% of state revenues. The Governor’s own fiscal plan estimates $700 million in annual deficits.[i] The Department of Revenue said today losses could be as high as $3 billion annually at high oil prices.
“Sean Parnell and Mead Treadwell have overseen the largest growth in government spending in Alaska history, turning record surpluses into a budget deficit,” said Mike Wenstrup, Chair of the Alaska Democratic Party. “They’ve broken our children’s piggy bank and are handing over the cash to oil companies without any guarantee of more jobs or oil production.”
Parnell-Treadwell spending increases to date do not include budget deficits and withdrawals from state savings (Statutory and Constitutional Budgetary Reserves) that will result from passage of SB 21, Governor Parnell’s bill to reduce Alaskans’ income from oil development. SB 21 has been changed several times since Parnell introduced it, and the latest version was reported from House Committee without a fiscal note. However, it appears that the current version of SB 21 would cost between $1 and $1.5 billion in the first year, or $300 million more on an annual basis than the Senate-passed version.
FOR IMMEDIATE RELEASE
April 9, 2013
CONTACT: Zack Fields
Rep. Lynn Gattis could cash in from KABATA
Representative’s family owns land that would become much more valuable from project
ANCHORAGE: After a legislative audit revealed that taxpayers could be on the hook for up to $1.4 billion dollars as a result of insufficient toll revenue from the Knik Arm Crossing, a land ownership analysis found that at least one state Representative in Juneau could benefit financially from road construction. The family of Representative Lynn Gattis (R-Wasilla) owns land adjacent to the Knik Arm Crossing approach in Matanuska-Susitna Borough, and would see her land appreciate as a result of substantially increased development value.
“The KABATA boondoggle puts taxpayers on the hook for up to $1.4 billion and it could also enrich a legislator at taxpayer’s expense,” said Mike Wenstrup, Chair of the Alaska Democratic Party. “This is just the latest example of Republican conflicts of interest in Juneau.”
This project is one of several multi-billion dollar bills that use Alaska taxpayers’ money on behalf of private special interests. “It is a violation of Owner State principles to socialize the expense of projects while privatizing the profits. Either private companies take the risk and get the reward, or if the public takes risks then we should benefit when projects succeed,” said Wenstrup.
Representative Gattis has received hundreds of thousands of dollars of state and local money in the past. While serving as a member of the Mat-Su Borough School Board, she received $65,225 from the Borough to construct a haul road across her property. That haul road was never constructed, but Gattis did not return the money to Mat-Su taxpayers. At the time she took $65,225 from Mat-Su Borough, Gattis was using a $630,000 loan from the state. One of the conditions of the $630,000 loan was that it be used for undeveloped agricultural land, a condition which would have been violated by the haul road.[i]
Under the terms of HB 23, Alaska taxpayers would be responsible for covering all of the $1.4 billion in bridge and approach costs which is not covered by tolls. The legislative audit found that toll revenue would be grossly inadequate to cover costs of the bridge. However, any toll profits from the bridge would accrue to private contractors, not Alaska taxpayers—a lose-lose proposition for the public. Today, House Republicans proposed transferring management of KABATA to the Alaska Housing Finance Corporation, but that transfer of managerial responsibility does not address the underlying problem of taxpayer exposure to costs and projected shortfalls in toll revenue.
HB 77 would eliminate Alaskans’ water rights, harm salmon fisheries
ANCHORAGE: Today the Senate Finance Committee passed HB 77, which takes away Alaskans’ water rights and endangers Alaska’s fisheries. HB 77 is part of a Parnell-Treadwell package of legislation, including HB 80 and SB 27, which harms Alaska fisheries on behalf of Outside special interests.
“HB 77 is part of the Parnell-Treadwell assault on Alaskans’ resources and traditional way of life,” said Mike Wenstrup, Chair of the Alaska Democratic Party. “By taking away Alaskans’ water rights and by making it harder for fishermen to protect their livelihood in court, this bill endangers Alaska fisheries.”
Since 2002, the value of Alaska’s commercial seafood landings have grown 126%, totaling more than $13 billion. Commercial and sport fishing employ 63,000 Alaskans and generated $2 billion in income during the last year alone.
HB 77 has several provisions (note that section numbers may change with the new CS) which would harm Alaska fisheries, including:[i]
Section 34 allows Outside interests to remove an indeterminate amount of water from Alaska rivers. Current law makes it illegal to withdraw water from state rivers, but HB 77 would give blanket approval to water withdrawals unless they are deemed “significant” by the state. This amounts to a blank check for special interests with lobbying muscle.
Section 39 changes the legal standard for an Alaska resident to defend his or her water rights and associated fisheries-related income. Under current law, an “aggrieved” person can appeal state-grant permits in superior court. Under HB 77, only a person with a “physical or financial detriment” could appeal to superior court. HB 77’s language would allow Outside lawyers to argue that Alaskans don’t have legal standing to challenge Outside permits, which is a standard legal tactic in other states and at the federal level. This provision undermines Alaskans’ right to protect their resources and traditional way of life in court. Dating back to Alaska vs. Lewis, state courts have protected Alaskans’ right to challenge the government in court, including but not limited to cases where a person’s direct financial interests are threatened.
Section 40 eliminates individual Alaskans’ ability to protect their water rights for fishing or other traditional purposes. HB 77 would transfer those water rights to the state.
FOR IMMEDIATE RELEASE
April 4, 2013
CONTACT: Zack Fields
Extreme Outside Group Launches Dishonest Attack Against Senator Begich
DC-Based Group Uses Secret Money to Flood Alaska Airwaves
ANCHORAGE: The Washington, D.C. based group NumbersUSA is spending more than $37,000 on television ads against Senator Begich. This Outside ad buy means that Washington, D.C. organizations already have spent more than $57,000 on television ads against Senator Begich this year.
"Alaskans know the truth about Senator Begich's record of always putting Alaska first and they will not be fooled by these misleading outside ads," said Mike Wenstrup, Chair of the Alaska Democratic Party. "This is just the beginning of an onslaught of outside spending and advertising this election season. Alaskans like to make up their own minds and do not want to be told what to believe from secretive outside organizations."
Although it keeps its donors secret, NumbersUSA has received attention for its troubling connections to extreme groups. NumbersUSA’s president has
The Alaska Democratic Party is tracking Outside spending on the 2014 Senate race. To view ad buy information from multiple Outside groups, click here.
 New York Times, http://www.nytimes.com/2011/