Gov. Sean Parnell, in his first State of the State address since being elected governor, assured Alaskans that the state is on solid economic footing and then urged lawmakers to keep it that way by lowering oil taxes, investing in energy projects and bolstering the mining industry.
Perhaps not surprisingly from a governor who has the reputation of a calm, steady leader -- in sharp contrast to his more volatile predecessor, former Gov. Sarah Palin -- Parnell offered no surprises in his address Wednesday night. He used the opportunity to ask legislators to approve the initiatives and budget proposals that he's carefully laid out in the last six weeks since taking the oath of office on Dec. 6.
"Our state is on sound footing," Parnell said. "And while 2011 will present significant challenges, together, we will overcome them."
Those challenges, he said, are primarily what he sees as roadblocks -- environmental and regulatory -- that are being put up by the federal government. Parnell called them "challenges to our liberty" -- in essence, Alaska's freedom to develop its resources.
"When no meaningful development is permitted on federal lands, Alaska's share of 'no development' is nada, nothing -- absolutely no jobs, no revenue, no growth," the governor said. "And that makes no sense."For the last few months, Parnell has touted the need to push back against the federal government when necessary to assure development of Alaska resources, particularly North Slope and offshore oil and gas prospects. He has filed numerous lawsuits and joined other legal actions against the federal government, mainly relating to oil exploration but also to stop President Obama's health care program and other initiatives he believes are not in Alaska's best interests.
Parnell pledges to fight feds, lower taxes, mine minerals
Alaska's oil tax debate
Earlier this week, Parnell introduced legislation he believes will help encourage oil industry investment on the North Slope by restructuring the state oil tax system, known as ACES or Alaska's Clear and Equitable Share. The tax regime was put in place in 2007 by a bipartisan coalition that included Palin, legislative Democrats and some Republicans. It's expected to be the dominant issue of this legislative session and lawmakers are divided over whether to revamp it at all and how far to go if they do tweak it.But Senate leaders are not convinced any revisions to the oil tax system can be accomplished this year.
Speaking to reporters after the governor's speech, Senate Finance Committee co-chair Bert Stedman, a Sitka Republican, outlined the Senate's plans to collect detailed information from more than 100 oil basins around the world so lawmakers can see how competitive Alaska is. He said the final report isn't expected until June so any revisions to the law may have to wait for a special session or even until next year.
Parnell also urged passage of other measures he's introduced in the past few days, including the elimination of the state's 8-cent-per-gallon motor fuel tax.
"The state has almost $12 billion in budget savings accounts," Parnell said. "There is no need to nickel and dime Alaskans every time they pump gas into their truck, snow machine, boat, or even their plane."
He reiterated his request, unveiled in his budget proposal, to build roads to the Umiat mine and the Ambler mining district, and to spend more than $65 million on planning, design and permitting for the Susitna River hydroelectric project. The governor also reminded lawmakers he wants $25 million for renewable energy grants, $10 million for Southeast Energy Grant Funds and $25 million for weatherization projects.
Parnell also called on the Legislature to fund a new study of rare earth elements in Alaska. He noted that Alaska could wrest much of the market for these minerals from China, which now accounts for 97 percent of the world's supply of these minerals, which power tech gadget batteries and hybrid vehicle fuel cell technology, among other things.
Parnell also talked about his key initiatives to combat domestic violence and sexual assault, and to put more money into scholarships for high achieving students.
The 'Un-Palin' governor
Parnell took over as governor in July 2009 when then-Gov. Sarah Palin resigned to pursue national political ambitions. Parnell has been tagged as "the UnPalin" and was welcomed for his calm steady manner after the much more animated and volatile Palin.
The governor's assessment of Alaska is very much in keeping with his views on the campaign trail last summer and fall. He defeated two Republican opponents -- Anchorage attorney Bill Walker and former legislator and business executive Ralph Samuels -- to win the Aug. 24 primary. Parnell went on to easily win the Nov. 2 general election over Democrat Ethan Berkowitz.
Parnell ran a low-key race, sticking to his message that the election was about jobs and families. Jobs would come with a reinvigorated economy centered mainly on encouraging new investment on the North Slope which would keep oil flowing and state coffers filled. Parnell talked a lot during the election about strengthening families through education initiatives such as his merit scholarship program which provides college tuition for all high-achieving students, not just those from low-income families. He also has focused on preventing domestic violence and sexual assault through bolstering law enforcement and some social services programs, particularly in the rural areas.
Since starting his first full term in December, Parnell has moved to implement some of his campaign agenda. He changed out a number of his cabinet members, including replacing top natural resource and revenue department officials. The new cabinet has been viewed as the governor's effort to work more closely with the oil and gas industry on tax issues and the gas line project that is progressing with state assistance.
Contact Patti Epler at patti(at)alaskadispatch.com