75-YEARS-YOUNG – Emily Doyle, age 3, is held by her mother, Anne, as she gives Smokey Bear a high-five during the U.S. Forest Service fire prevention mascot's 75th birthday celebration Saturday morning at the Sawmill Creek Campground. The celebration included games related to fire prevention and a birthday cake. The event also showcased work done at the campground as part of the Blue Lake Dam expansion project. New features include a picnic shelter, benches, restroom and landscaping. (Sentinel Photo by James Poulson)

Gov OKs $1,600; Vows to Seek More

By BECKY BOHRER
Associated Press
    JUNEAU (AP) — Alaska Gov. Mike Dunleavy said he is approving the roughly $1,600 oil-wealth fund check for residents passed by lawmakers this year but views it as a partial payment and plans to press for additional funding.
    Dunleavy, in a video message released Monday, said majorities in the House and Senate do not share his support for a full dividend, which would equate to checks of about $3,000. Nonetheless, he said he would fight for more funding for the dividend and expected a fall special session.
    Dunleavy spokesman Matt Shuckerow said details of any special session would come later. Some lawmakers have pushed for discussions on changes to the dividend formula.
    Dunleavy campaigned on a Permanent Fund dividend for residents paid in line with a longstanding calculation that has not been followed since 2016 as the state has grappled with a budget deficit.
    Lawmakers instead asked Dunleavy to consider dividends of about $1,600 this year. Last year’s capped payout amounted to $1,600 checks.
    Many lawmakers see the calculation as unsustainable and at odds with a law passed last year seeking to limit withdrawals from permanent fund earnings for dividends and government expenses.
    Traditionally, dividends have been paid using fund earnings according to a formula based on an average of fund income over five years. In 2016, then-Gov. Bill Walker reduced the amount available for checks, an action ultimately upheld by the Alaska Supreme Court, which ruled that, absent a constitutional amendment, the dividend program must compete for annual funding like other programs.
    Last year, lawmakers also began using earnings to help pay for government costs, causing tension with the dividend program that overshadowed lawmakers’ work this year and contributed to drawn-out regular and special sessions.

State Budget Woes Fuel Oil Fund Debate

By BECKY BOHRER
Associated Press
    JUNEAU (AP) — Daniel Bowen came to Alaska in 2011, looking for adventure and opportunity. He and his wife eventually settled on the Kenai Peninsula south of Anchorage, a salmon fishing haven calling itself “Alaska’s Playground.”
    But the Bowens, both teachers, recently returned to their native Michigan. After years of stress over delayed state budgets, their breaking point, he said, was Gov. Mike Dunleavy’s proposed reductions to K-12 spending and health and social service programs.
    “We started to realize that Alaska isn’t turning out to be where we want to raise our kids,” Daniel Bowen said, adding later: “As much as we loved Alaska, we can only take so much, we can only take so much uncertainty.”
    The state has been roiled by a budget dilemma linked to its uneasy reliance on oil, bringing a reckoning that has scrambled traditional political alliances. For decades, Alaska binged on infrastructure and community projects when oil prices were high and cut spending and closed facilities when they weren’t. This time, prices haven’t boomed and after years of drawing down savings and cutting expenses, state leaders face tough decisions.
    The situation has politicians debating changes to the annual dividend paid to residents from Alaska’s nest-egg oil-wealth fund. The checks, seen by many as an entitlement, once were considered almost untouchable. But the budget reality, and differences over taxes and spending, has politicians and residents choosing between the size of the prized checks and public services many expect.
    The anxiety is tied to persistent low-to-middling North Slope oil prices. Prices topping $100 a barrel in 2014 went into a free-fall that worsened a budget deficit now in its eighth year. State revenue officials believe prices in the $60 a barrel range to be realistic long-term.
    This year, an average of about 508,000 barrels of oil a day has coursed through the 800-mile (1,288-kilometer) trans-Alaska pipeline, according to the pipeline operator. On the pipeline’s peak day in 1988, 20 years after oil was discovered at Prudhoe Bay, 2.1 million barrels flowed.
    “Alaska needs to think about the new world we have today,” said Cliff Groh, a longtime political observer, adding later: “The cavalry” of high prices and booming production “does not seem to be coming.”
    Oil has been the economic lifeblood of Alaska, whose population of about 735,000 is less than Seattle’s. A 1969 oil and gas lease sale was a game-changer, said Eric Wohlforth, a state revenue commissioner in the early ‘70s and a former Alaska Permanent Fund Corp. board trustee.
    “Suddenly we were a place that the bankers looked on with envy rather than just the poor supplicant,” he said. The sale reaped $900 million that went toward infrastructure and other needs but was pretty well spent around the time the pipeline came online in 1977, he said.
    In 1976, voters approved creating the Alaska Permanent Fund and dedicating a portion of mineral wealth to it. The fund, grown through investments, was valued as of June at $66 billion, with the earnings reserve portion valued at $18 billion.
    The fund’s principal is constitutionally protected but its earnings are spendable. Lawmakers had long limited use of earnings to such things as fortifying the fund and paying dividends based on an average of fund income over five years.
    But last year, after going through billions of dollars in savings and at odds over taxes and further budget cuts, lawmakers began using earnings to help pay for government and sought to restrict what could be withdrawn for dividends and government.
    Alaska has no state sales or personal income taxes.
    Dunleavy, a Republican, says a longstanding dividend calculation that hasn’t been followed for three years should be followed until it’s changed. That would mean checks of about $3,000 this year. His support on the issue includes conservative Republicans and some Democrats, though other conservative Republicans and Democrats have resisted.
    He has indicated willingness to discuss formula changes but insisted on a public vote. He said Alaskans didn’t mind the size of their checks until politicians began tinkering. Checks in recent years ranged from $878 in 2012 to $2,072 in 2015, the year before they were capped.
    The Legislature, with a bipartisan House majority and GOP-led Senate, wants Dunleavy to consider a roughly $1,600 check this year. Many lawmakers say the formula is unsustainable and have balked at violating the draw rate and setting a precedent of dipping deeper into the reserve.
    Higher-than-expected draws could reduce what’s available in earnings and at some point put pressure on the corporation to change its strategies to churn more money into the earnings reserve account, said Angela Rodell, the corporation’s CEO.
    Carl Davis, research director with the Washington, D.C.-based Institute on Taxation and Economic Policy, said cutting the dividend is regressive, hitting lower-income families particularly hard. He sees no conflict between paying a dividend and taxing residents.
    While some Democrats want to debate oil taxes and whether companies are paying enough, Dunleavy has focused on cutting a budget he considers unsustainable.
    There would not be an “honest discussion” about spending if tax bills also were being introduced, said Dunleavy’s revenue commissioner, Bruce Tangeman.
    Dunleavy vetoed more than $400 million, riling critics who say it’s too much, too fast and prompting public outrage that is fueling a recall attempt. The Board of Regents, facing a potential 40% cut in state support for the university system, has taken initial steps toward consolidating its three accredited campuses into one.
    Lawmakers, unable to reach the higher threshold required to override Dunleavy’s vetoes, passed legislation seeking to reverse many of the cuts. Dunleavy has the option of cutting again.
    Larry Persily, a former deputy revenue commissioner, said the choices are painful.
    “These are a lot of different math problems made worse by the fact that we’ve lived two generations without taxes, two generations with free money and two generations of candidates who won if they could wrap themselves in the biggest dividend flag. As I’ve told some groups the last couple weeks, ‘Guys, we did this to ourselves,’” he said.
   

Group Launches Bid To Recall Governor

By BECKY BOHRER
Associated Press
    JUNEAU (AP) — A group that includes a coal company chairman and a framer of Alaska’s constitution is launching an effort aimed at recalling Republican Gov. Mike Dunleavy.
    The move comes eight months into Dunleavy’s term and weeks after his budget vetoes of more than $400 million — affecting the university system, environmental, health and social service and other programs — prompted public outrage. Lawmakers, unable to muster sufficient votes to override the vetoes amid a dispute over the current special session’s proper meeting location, this week passed legislation that would restore many of the cuts, including adding back $110 million of the $130 million veto involving the university.
    Dunleavy retains authority to cut any spending with which he doesn’t agree.
    In Sitka a signature gathering event is planned 4-7 p.m. Thursday at the Unitarian Universalist fellowship hall.    Registered voters can sign the recall application.
    “People from all regions of Alaska have had enough,” Joseph Usibelli and Peggy Shumaker, his wife, said in an opinion piece published by Alaska newspapers.
    The so-called Recall Dunleavy group lists Usibelli, Arliss Sturgulewski, who is a former Republican lawmaker, and Vic Fischer, the last-living surviving delegate to the Alaska Constitutional Convention, as co-chairs. Scott Kendall, who was a chief of staff to Dunleavy’s predecessor, independent Bill Walker, said he provided legal counsel and other advice to the group.
    Usibelli is chairman of the board of Usibelli Coal Mine and a prominent supporter of the University of Alaska Fairbanks. He told the Anchorage Daily News he voted for Dunleavy but doesn’t support the vetoes and the effect they would have on state services.
    Efforts to reach Usibelli weren’t immediately successful Wednesday.
    Grounds for recall in Alaska, according to the state elections office, are lack of fitness, incompetence, neglect of duties or corruption.
    The recall group cites Dunleavy’s failure to appoint a judge within a statutory time frame, misuse of state funds for online ads and mailers to promote Dunleavy’s agenda. It also cites use of Dunleavy’s veto authority to cut money for the courts following an abortion decision with which he didn’t agree.
    Dunleavy spokesman Matt Shuckerow said the governor’s office has spent about $35,000 on printed and Facebook communications, with the bulk of that money used for messaging on the social media site. He said the office has received guidance from the Department of Law that such communications are permitted.
    He did not immediately respond to a request for comment on the recall effort.
    The group will need to gather 28,501 signatures, Division of Elections Director Gail Fenumiai said by email. If the application is certified, supporters would then need to gather 71,252 more in a bid to try to put the issue to voters.
    The National Conference of State Legislatures says there have been many attempts to recall governors across the country but few have triggered recall elections. Wisconsin Gov. Scot Walker survived a recall vote in 2012.

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