‘This is your lifeline’: Murkowski urges Legislature to address shrinking population

U.S. Sen. Lisa Murkowski urged Alaska lawmakers to stem the tide of outmigration by investing in transportation, resource development and child care, among other areas, in a fiery speech to the Legislature on Wednesday.

“I maybe didn’t stay in my lane,” the 20-year Republican senator said after spending much of her hourlong address instructing lawmakers on state policy proposals, in what she called “the tough love part” of her comments.

Her top priority, she said, was ensuring that the Legislature includes in its budget funds needed to secure federal dollars for the Alaska Marine Highway System. Murkowski was instrumental in bringing nearly $300 million from the U.S. Department of Transportation to the Alaska ferry system through the federal infrastructure bill. But to qualify, the state must promise to provide millions of dollars in its own budget. Republican Gov. Mike Dunleavy is proposing using a novel and untested approach to apply federal credits toward the state matching requirement, rather than using money from the state’s own accounts.

“I’m doing something that I don’t typically do,” Murkowski told reporters after her speech. “Usually, you send the federal resources and you step away. I want to make sure that these dollars that are on the table in a five-year infrastructure bill, are going to be there to help support the Marine Highway System. This is our opportunity, this is our shot. Let’s not screw it up.”

In her address to lawmakers, Murkowski, who grew up in Southeast Alaska and once served in the state Legislature, took on a tone that was at times pleading, and at other moments admonishing.

“We have an unprecedented opportunity to refloat our ferry system. This is our shot. This is your lifeline. Please grab it,” she said to lawmakers. “This is where I may be stepping over because I almost never call on the Legislature to do anything specific here, but I am asking you — approve the matching funds for our ferry system. This is the Alaska Marine Highway System. It is not the Federal Marine Highway System.”

Reactions to the speech from lawmakers ranged from enthusiasm to tepid acceptance. Rep. Louise Stutes, a Kodiak Republican who belongs to the House minority and has long championed the state’s ferry service, called the speech “fabulous.” But more conservative members of the chamber were slow to clap at Murkowski’s pronouncements.

“She didn’t say, ‘You must do this.’ I heard the conditional voice,” said House Majority Leader Dan Saddler, an Eagle River Republican. “I didn’t hear any directives. She’s smart enough to know she can’t make us do anything.”

‘49th in anything but statehood’

Murkowski, the senior member of Alaska’s three-member congressional delegation, cited out-migration, and Alaska’s poor economic performance — at or near the bottom among U.S. states — as major problems that demand “big visions.”

“Alaska cannot settle for being 49th in anything but statehood,” she said in her first speech to the Legislature since winning reelection last year.

The solution, she said, requires lawmakers to look past the size of the Permanent Fund dividend, which has preoccupied legislators for years and sometimes prevented them from taking on more ambitious policy ideas.

“If this Legislature spends the whole 33rd legislative agenda focusing on how much Alaskans are going to be getting for a Permanent Fund dividend, we miss everything,” Murkowski told reporters after her speech.

Dunleavy, the conservative governor who has in the past championed cuts to state spending, proposed this year paying out a full statutory $3,900 dividend — which would make it the largest in state history and cost over $2 billion — while including a $400 million deficit in his proposed budget and adding no new funding to the state’s ailing public education system. Leaders of the bipartisan majority in the state Senate have already said that such a large dividend was unlikely, but they have not yet proposed an alternative dividend size, and neither has the more conservative House majority.

Those “big visions” that Murkowski alluded to for solving the state’s ailing economy and shrinking population could include an extension of Alaska’s railway to Canada, a plan first promoted by her father, Frank Murkowski, who served in the U.S. Senate and as governor. A 2006 study of such a project found it would cost $11 billion.

“We’ve got good projects at risk of not being able to get off the ground because we still can’t move our stuff. We need to be thinking big about how we move our people, our resources, our freight, our trash. Let’s not lower our sights here,” Murkowski told lawmakers.

She acknowledged that such grand plans have largely stalled amid an onslaught of litigation and environmental objections that have halted several proposed projects in recent years. Another factor has been dwindling state revenue amid falling oil prices and dropping demand for Alaska crude, leaving the state in an ongoing budget crisis with more needs than state revenue can meet.

“If we give up, if we stop dreaming, if we stop pushing the big things just because we know somebody is going to object or litigate, we’re going to dry up and blow away. That’s not the Alaskan spirit,” said Murkowski. “Maybe I overstepped a little bit with the Legislature today. I generally do not try to tell them how to do their job, but I challenged them. We have stalled out on our big dreams, on our big visions.”

‘Aiming low’

Among actions Murkowski urged the Legislature to take was to avoid importing natural gas from Canada to fill a looming shortfall in Cook Inlet production.

“As an Alaskan, I just cringe at that,” Murkowski said at the prospect of importing natural gas from British Columbia rather than developing new natural gas projects in the state. “If we don’t own our own future, why would anybody invest in us?”

Lawmakers have considered importing gas as a temporary solution to meet demand while new projects — which take years to develop — come online. But Murkowski said that what is now seen as a temporary solution could morph into a long term plan once the state transitions its export terminal to an import terminal, and once contracts are signed with Canadian providers.

“And then, what happens? We get comfortable. We get comfortable getting it from somebody else, instead of taking care of ourselves with our own resources. In my view, it’s the definition of aiming low,” Murkowski said.

Saddler said he was troubled by the prospect of Alaska — long a resource exporter — reverting to importing liquid natural gas. “But on the same token our utilities have to keep our citizens warm at a reasonable price,” he said. “If that is the solution we have to implement, then that may be it.”

Murkowski also expressed outrage at an expanded design of the Port of Alaska supported by Anchorage Mayor Dave Bronson, which could substantially increase the cost of the project. Murkowski worked to ensure federal funding for the port project would be available, and state matching funds were secured as part of last year’s budget process, but the new design could scramble the process.

“When I read in the Anchorage Daily News that the proposed design modifications may cost $200 million more with no understanding how to pay for it besides applying to additional federal grants — I mean, really?”

Murkowski urged lawmakers to focus on workforce development, housing and child care amid statewide shortages that are hampering the state’s economy. The senator said the lack of affordable child care is also impacting the military’s willingness to increase its presence in the state.

“We cannot be a place where people spend part of their lives only to pack it up and leave because they don’t see a future for them and their family, or watch as the kids that we raised leave here and never come back. Alaska needs to be the place where people want to move to and want to stay because they have good jobs that support their families, they have a good place to live, they have good schools where their kids can excel, they have a quality of life that cannot be matched anywhere else,” Murkowski said.

That’s going to take “a recognition that while a lot of supplemental federal support has come our way between the COVID package, the infrastructure bill, we can’t count on that forever. It’s not open-ended.”

Rather than accepting the cry for bolstering state investments, Saddler questioned Murkowski’s efforts to bring large federal sums to the state — even for projects broadly seen as critical — amid concern from congressional Republicans over the federal debt limit.

“How does this end for the federal government to continue spending money?” Saddler said. “She said the federal government has some hard decisions to make as well … She may have been speaking somewhat to herself when she was telling us that we have hard truths to face.”

Anchorage Daily News reporter Sean Maguire contributed to this story from Juneau.