Mike Doogan is an Alaska State House Representative, author and former newspaper columist. This column appeared in his legislative e-newsletter on March 25.
I've been spending time with my colleagues in the powerful House Finance Committee.
Lots of time.
We are closing in on two weeks of hearings on Gov. Sean Parnell's bill to give another $2 billion a year to the oil companies – HB 110.
What we've learned so far is this: the oil companies really, really, really, really – I mean, really – want the money. And Parnell wants to give it to them.
Every other "fact" is in dispute. Parnell and his allies in the House are attempting to manufacture a crisis by saying that: 1) The oil companies aren't putting oil in the pipeline. 2) If the amount of oil in the pipeline falls low enough the pipeline will have to be shut down. 3) If we don't give the oil companies another $2 billion a year the oil companies won't put more oil in the pipeline and it's sayonara to the oil era. 4) That is going to happen next week.
Okay. Okay. That's an exaggeration. But it's not an exaggeration to say that the only method Parnell has offered for putting more oil in the pipeline is to "incentivize" the companies. (For those of you who don't speak bureaucratese, "incentivize" means bribe.)
There are other ways to do it. One is forcing them to live up to the terms of their leases or give them up. But, when it comes to oil policy, Sean Parnell seems to be all carrot and no stick.
What is going to happen?
Don't know. The committee is at the end of two weeks of hearings on Parnell's bill and we have not talked about what we think of the bill and/or what changes we think ought to be made.
Finally, we are asking the public what you think. There's still a chance to weigh in. There's a public hearing from 3:00 p.m. to 7:00 p.m. Friday. See you there.
Shedding Government Girth
House Speaker Mike Chenault thinks state government should take a long look in the mirror and get honest about how "curvy" it's gotten over the years. I think that's a good idea. So I joined a majority of my House counterparts to pass his HB 166 (.pdf). It will require performance evaluations for each state agency, on a rolling 10-year cycle. The idea is to get the government up on the scale and look for places to trim, just in case something happens – like the governor succeeds in giving the oil companies $2 billion a year.
I doubt you'll ever want to see your government in a bathing suit, but tightening the belt a bit is always a good idea. I thought the legislature and the governor's office should set a good example, and the speaker agreed, adding both to the list, and putting them right near the top. Again, don't expect too much, but even Jared started with one six-inch tuna sub, right?
What Shoes Go With a Shrinking Federal Purse?
Sen. Mark Begich escaped the tag-team professional wrestling ring we call our nation's capital this week, and stopped by Juneau to chat with us semi-professionals in the state legislature.
Now, I can't claim that I was hanging on every word—addresses to the legislature usually resemble laundry lists more than they do the high rhetoric of the Roman Senate—but one thing Begich said certainly caught my ear.
Budget cutting is the new spring fashion in Washington. Generous surpluses are out and trim bottom lines are in. Getting the nation's budget out of the red is the new black, as they say (though I don't pay attention to the world of fashion myself—anyone who has seen me on Gavel to Gavel can vouch for that.)
As you might expect, the consensus on budget cutting has come with a heavy dose of partisan bickering in the Beltway. Even with the war of talking heads on cable news about how much we should cut and where, though, Begich said he has already agreed to $51 billion in budget cuts for the current fiscal year.
That's billion with a B. To put that number in perspective, the state's total budget for the fiscal year is about $11 billion.
Naturally, the first thing I think when I hear a number that large is, how does this affect me? (And how does it affect you, the hard-working citizen, of course.)
The State of Alaska has grown accustomed to receiving healthy helpings of federal largesse over the years. A significant amount of federal funds, somewhere in the neighborhood of $3 billion, makes up a chunk of the annual state budget. I'm not the first one to raise the alarm, but I'll say it again anyway: we seem to be nearing the last stop of the federal gravy train.
This year's state budget already has a federal funding hole in it, since we've written into the Health and Social Services budget $129 million of extra federal funding we know Congress has no intention of providing. If Congress doesn't act to give us the $129 million, there's language in the budget saying that the state will fill the hole. Call it a budgeting IOU that'll come due when the federal money runs out.
While $129 million is a large piece of fiscal pie, there are plenty of smaller slices of state money replacing federal funding in the budget. Federal stimulus money is disappearing, federal reimbursement rates are going down and the days of all-you-can-eat pork barrel earmarks are in the past.
When the governor is already talking about giving away $2 billion of state revenue a year in the form of tax breaks to oil companies (impoverished corporate titans that they are), the prospect of filling in billions of dollars worth of federal funding with state money in the not-too-distant future is certainly something that keeps me up at night. And it should probably keep anyone else who gets a PFD check up, too.
Now, if you'll excuse me, I need to go find out what color belt goes with the spring lineup of capital appropriations.
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