Haines’ two state legislators staked out opposite views on a proposed school funding bill, but each said they were undecided on a proposal by Gov. Sean Parnell to reduce taxes on oil companies by $2 billion per year.
Parnell’s proposed reduction of oil industry taxes has overshadowed most other issues since the session began in January. The legislature adjourns April 17. Rep. Bill Thomas, R-Haines and Sen. Albert Kookesh, D-Angoon, spoke in recent interviews.
Parnell and supporters of the tax break say it’s necessary to stimulate new oil exploration and to keep the trans-Alaska pipeline full and operational.
Opponents say the measure – which would overturn a tax scheme developed by former Gov. Sarah Palin – is a giveaway to the oil industry and comes without guarantees that it will spur development.
Thomas describes his position as “kind of split” until he hears all arguments. Meetings on the question have been held twice daily, he said.
Factors weighing against the change include a decline in federal funds to Alaska and the short period the current tax regime has been in place. “If the Parnell (proposal) goes, you’ll be seeing rapid cuts next year. People will be cutting back so fast, it will make your head spin,” possibly requiring another remedial change in a few years.
But keeping the pipeline full is a legitimate concern, he said, and as the price of oil climbs, increasing the state’s oil revenues, legislators are more likely to vote for the cut. The per-barrel price of oil has climbed from $80 about a year ago to $113.
Thomas said the state’s major oil producers aren’t drilling now because they’re only interested in large “legacy” oilfields, like the ones at Prudhoe Bay and Kuparuk currently feeding the pipeline. “We want a formula that will reward them from drilling, not just taking oil (from existing wells).”
Kookesh said he wasn’t convinced one way or another for the tax break. “If the companies could commit to us that they’d use (the $2 billion) for development, I’d like to see it, but that’s a lot of money. Two billion dollars for the next five years could be a huge endowment for education.”
Thomas spoke against Senate Bill 84, legislation that would incrementally increase school funding the next three years, and allow school districts to know in advance what funding they’ll receive.
He said past funding increases haven’t brought enough improvements in student achievement.
Haines superintendent Michael Byer and school board members are advocating the legislation. “(Byer) can get on the horn all he wants. Until the dropout rate improves, people aren’t sympathetic. We don’t reward failure… Maybe it’s different school districts (that are failing), but they’re all blended together” in education funding, Thomas said.
Kookesh supports the legislation, but believes its funding level isn’t sufficient to stay even with inflation. “You have to have an increment. Inflation has hurt schools as much as energy costs or anything else. No one’s even taking that into consideration.”
Parnell has said he intends to keep education funding level with last year’s and Thomas said Haines should budget for that amount.
Neither Thomas nor Kookesh would divulge what projects in their districts they’ll be pushing for capital funding, although Thomas said his priority list would include road work for Lynnview Drive downtown and $1 million for viewing platforms along the Chilkoot River.
Thomas said he has a list of 45 capital requests from his district. “We’ve got to sweet-talk people to get them (funded). (Chilkoot viewing platforms) are a liability issue for the state, so we have to try to do that one.”
Both Thomas and Kookesh support a push by western Alaska legislators for changes to the state’s coastal zone management plan that would return power to communities for permitting of development projects. Under former Gov. Frank Murkowski, communities lost influence.
“All the mines in Southeast Alaska were permitted under the old coastal zone management. We’re saying, ‘What hasn’t been permitted?’” Thomas said. Murkowski’s complaint was with delays in permitting caused by the state Division of Habitat and he purged that agency, Thomas said.
Kookesh said he remains opposed to a Parnell plan for a new generation of scholarships to Alaska universities for students on a rigorous academic schedule because in many village schools there aren’t teachers enough to provide those classes.
“It becomes an elitist scholarship if the governor doesn’t do anything to help our students qualify for it,” Kookesh said. Kookesh said he wants Parnell to spend more money on basic student needs.
Thomas and Kookesh said they didn’t anticipate changes to the Alaska Gasline Inducement Act (AGIA), even though leaders are disappointed that more progress hasn’t been made toward construction of a natural gas pipeline. Thomas said the price of natural gas has dropped sharply.
Both legislators also said there hasn’t been talk of floating a general obligation bond to pay for port improvements, a potential source of funds for improving the borough’s Lutak Dock. The dock is central to plans for staging pipeline shipment through Haines.