Politics

Parnell: 'Our focus was consistently on opportunity for Alaskans'

With more than 15 years' experience as an elected official, Gov. Sean Parnell has helped steer the state through good times and bad. But after losing his re-election bid to Gov.-elect Bill Walker on Nov. 4, he plans to look for opportunities in the private sector.

As an Anchorage senator in the late 1990s, Parnell helped bring the state through a daunting fiscal challenge when the price of oil cratered and Alaska's savings were vanishing, a situation that has cycled back to the forefront of issues facing the state today.

With dwindling production also a threat, Parnell in 2013 helped lower production taxes in an effort to spark exploration in the North Slope oil fields -- an effort that has encouraged new projects. He also put in motion a critical gas line project involving the state's biggest oil producers that could one day be the state's top source of revenue.

Alaska Dispatch News caught up with Parnell for an interview last week on one of his final days in office. The interview has been edited for brevity.

You had several important accomplishments that many people appreciated. What do you think your legacy will be when people look back on your record?

I think it's going to be all about economic growth and stronger, safer families. Our focus was consistently on opportunity for Alaskans. My hope is Alaskans will remember me for the opportunity created, both in the economy and in education and safe homes. Larger than that is my deep love for the people and for our land and our great state. I think that shined through in everything I tried to do.

What would you say are your top accomplishments?

When I think about economic opportunity, I leave office with job opportunities and development opportunities on the North Slope that are far beyond anything in the last three decades. I leave with a gas line on track and engineering and design work done. I leave with a gas trucking solution for Fairbanks on track to deliver gas to Fairbanks and North Pole by 2016. I leave with Alaska Performance Scholarships in place that thousands of Alaskans have earned already that (have) given them an opportunity for college education or job training.

And one hugely important area I pursued as an administration was eradicating the epidemic of domestic violence and sexual assault. For our communities now, our people to actually be able to speak about those topics with each other, that's a significant change from five years ago, let alone the actual lives that are safer today because they know that other Alaskans are courageously standing up for them. So every time those Choose Respect marches were held, people saw other Alaskans standing up for them, and they got the help they needed because they realized they didn't have to live that way. And that is just one element.

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As I look back, it really was some very significant pieces. But then there's the day-to-day, helping the constituents get their PFD or public benefits of some kind.

With all these accomplishments, why do you think you lost? What was the biggest factor?

I haven't gone back to really look at that. You can say it was one issue or another. When you're talking about how close the election was, any issue or combination of issues could make that happen. So like I told you before, I'm not one to look back and do that analysis.

Will you run for office again?

I'm not even thinking about that at this point. I haven't made those plans.

What was one thing you learned from the race itself that you would do differently, or from your time in office, that could have helped you win?

I'm at a loss, really, to even think about that or describe that, because I haven't deconstructed the race like you're asking me to do here. The race was so close that you could name any of eight or 10 issues that could have resulted in that loss, but ultimately it was close. It was the first time in Alaska history there wasn't a Democratic ticket per se. I think that played into it, certain issues played into it. It's hard to know.

The National Guard scandal was a big thing, too.

Well sure, had I discovered in 2010 what I discovered in 2014, had that been known at the time, we'd be farther down the road addressing this than we are, but I did the right thing and called in the investigation. We're following the road map that OCI laid down. When I spoke with the governor-elect, I made sure to point out that's very important to continue that work along the lines of the roadmap and to get an adjutant general in place soon.

On the National Guard scandal, is there anything you took from that? Some people I have spoken to feel like maybe you were too trusting. Would you have dug deeper, or is there anything you learned?

Again, we've been down this road before with your newspaper and others, and when you go to the FBI with allegations of wrongdoing and they say there's no basis for it -- and you know the list of five times or so when different members of us checked. But ultimately we got to the bottom of it with OCI. And now we need to work with others to restore that trust and confidence.

How did the studies come out so different? One recent study was so different than the others.

That's what Lisa Murkowksi has asked them to tell her. She got the inspector general report, the National Guard report. That said everything was fine. Then she got another that said it wasn't -- the one I called for. So that remains to be seen.

So no guesses there?

I don't engage in speculation. There are too many factors and too many important things to take care of going forward.

Is there anything you regret about your time in office? Anything you wish you would have addressed or addressed more fully?

I certainly regret not having all the information to act sooner on the National Guard. But when it comes to the daily operations of this administration and the office, I think we put together an amazing team of people. And there are literally thousands of dedicated public servants in this administration, and most of them are unsung.

We’re facing a huge deficit, compounded by falling oil prices. Is there a particular path you can recommend based on your experience that as a state we should go down? Tapping the earnings? Or is a sales tax better? Do we need a broad plan?

No, I think, No. 1, there's years of savings left, and No. 2, the focus this year needs to be on spending less, and it has been, and we need to continue to ramp down spending. I'm not going to go down the road of saying "use earnings." I said the Permanent Fund and its earnings were off the table during my term in office and that's how it will remain, but again, these are decisions for the incoming governor and the Legislature.

Do you think we need a fiscal plan so we’ll know what to do in maybe two years or five years?

I think we already have one. It's called an annual budget. There should be discussions, and there always are discussions, on what the future looks like. When a state budget is based upon a commodity price like oil, it's going to vary over time, because prices go up and down and production changes, but in that setting, we historically, just like in '99, when we were in the midst of cutting budgets five consecutive years, just like in '99 and 2000, we used savings to get us through the hard times, and cut spending at the same time. That's the nature of this savings account; they're the shock absorbers for the budget, and they will be as long as we are dependent on commodity price or revenue from commodities like oil and gas.

And the next thing is to make sure the gas line stays on track. There are key deadlines this next year that need to be met to keep it on track. Legislation needs to be completed this year on a structure for PILT, payment in lieu of taxes, not setting the rates, but a structure for it. That needs to happen this legislative session. Next fall, early winter, there needs to be a special session on whether to move from pre-feed to feed once all that work gets done. If all that stays on track, if the gas line keeps progressing, gas revenues will begin to supplant oil revenues. That's a significant economic engine for our state, the gas line.

But (it won’t begin producing) for 10 years, if everything goes as planned.

It could be eight years. But it depends on how committed to this process the parties are and whether they can stay on track.

Bill Walker has made certain appointments of folks who have had perhaps combative relationships with the oil industry. Does that give you any concern or signal the gas line will go off track?

Let me take it to a broader context. Any time there is change there is uncertainty and risk created. So any positive signals the incoming administration can send, that they're committed to keeping the gas line on track, that they're committed to keeping the Interior energy project on track, they're committed to keeping Point Thomson development growing -- those are hugely important to Alaska's economic future.

What’s a good area to cut? How about the operations budget? How would you deal with that, across-the-board trimming?

No, but again I'm going to give the governor a budget that's hundreds of millions of dollars less. I'll give it to him on Dec. 1. I gave him the broad outlines of it, and he got the fiscal year '15 numbers this last week. He'll have an opportunity to make those decisions and I don't want to prejudge him.

You can’t recommend whether salary freezes are a better way to go versus...

I think those are his decisions. I and the legislators dealt with the biggest cost driver in the operating budget. You've already seen how I addressed that. I also dealt with the very real cuts of making agencies absorb salary increases and that sort of thing rather than funding them. We not only saved hundreds of millions of dollars on the unfunded pension liability -- as a strategy I, and our administration, attacked the biggest cost driver -- but we also addressed the individual agencies, making sure they worked more efficiently.

Are you worried some things will get dropped? There’s your effort to open ANWR through legal action, the Medicaid Reform Advisory Board?

The next largest piece of the operating budget is Medicaid. It's now the single biggest cost driver in terms of increases. Part of what that Medicaid advisory group was supposed to do was provide recommendations on how to bend the cost curve, meaning keep it from growing so quickly. Of course I'm concerned that would continue. Because on the federal level, as well as on the state, it's not a sustainable program, the way it's set up now. We'll see what happens.

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What are you planning to do next?

I plan to have Thanksgiving dinner with our new baby and family (laughs).

Professionally?

I don't have any plans other than to be involved in the private sector and in Alaska life. I plan to step up to being an Alaska citizen again.

Not planning to face off against Don Young?

Not a personal ambition, no.

Would you go back to lobbying?

You're talking about something I did for 200 days out of a 27-year career. I've worked as a lawyer for 13 years. I may go back to the practice of law. I may get into my own business opportunities in Alaska. But I really don't have a set course at this point. That's something I'm going to talk over with Sandy and think on it.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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