Anchorage Daily News

WASILLA -- Balancing budgets, paying off public employee retirement accounts, finding new energy sources and reducing the number of high school dropouts. All those items and more top Valley legislators' lists for the upcoming session in Juneau.

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Trumping all issues, however, will likely be the state of the state's budget come January.

"I bet the big issue is going to be called $60 oil," said Rep. Carl Gatto, R-Palmer.

For the past few years, the state has profited from skyrocketing oil prices. But prices have dropped precipitously in the past few months to below $60 a barrel. The current state budget is predicated on oil averaging $83 a barrel so if prices stay low it could leave the state short of funding for this fiscal year, and mean tighter wallets for the next budget, Gatto said.

While oil prices have jumped around considerably in the past few months, Gatto said he thinks it's unlikely to spiral upward again given the current economic slump.

Along with the budget, Mat-Su legislators marked as a priority finding new low-cost energy sources for the Railbelt and the rest of Alaska.

Rep. Bill Stoltze, R-Chugiak, said a host of possibilities are on the table. They range from multi-million dollar regional projects like building a hydropower dam on the Susitna River and tapping geothermal power under Mount Spurr to localized efforts to add wind and solar power in villages.

Stoltze and Mark Neuman, R-Big Lake, said they will be watching closely a report by state energy coordinator Steve Haagenson due out in December. Haagenson and his staff visited more than two dozen communities around the state this year to solicit, compile and analyze ideas for potential energy sources from wind to solar to burning biomass as fuel.

Haagenson said Monday the report is on track to be delivered by the end of the year. He said to expect recommendations -- but not dictates --for potential alternative and renewable energy options for individual communities and regions.

Whether to give rural Alaskans more help with energy costs is also likely to come up in Juneau this year.

Rural Alaskans, along with urban residents, got some help this year with the $1,200 state energy rebate. But the Bush has been particularly hard hit by rising prices with heating fuel costs topping $8 a gallon in some remote villages.

Rep. Wes Keller, R-Wasilla, said he could support more financial aid to offset the high costs, but it would have to be tied to incentives for finding long-term energy solutions.

"I think there will be a resistance to a straight subsidy," he said.

Locally, legislators said they will be focusing on a number of initiatives, including finding more money for Mat-Su area roads and improving schools.

Keller said he's been talking with Mat-Su School District, state education and University of Alaska officials about a merit-based scholarship program for the university. The program would let high school students from their sophomore year on turn high grades into credit for tuition at the University of Alaska.

Keller said such incentives could reduce the state's overall dropout rate, and that of the Mat-Su School District. According to School District spokeswoman Catherine Esary, 413 Mat-Su students were classified last year as high school dropouts.

On an individual note, the Valley delegation will be without long-time Wasilla senator Lyda Green this year. Green, who was first elected in 1994, decided to withdraw from the race earlier this year. In her place, legislative newcomer Linda Menard was elected to the seat.

As Senate president, Green held considerable clout and seniority that helped get Valley projects through the Legislature.

Still, even without Green, Gatto noted Mat-Su will be boosted this year by Stoltze's appointment to co-chair of the powerful House Finance committee. Stoltze had previously served as vice chair, a position that allowed him to step in when then the previous co-chairs were absent.

Stoltze said among his financial priorities, he'd like to see the state fill in more of the gap in funding for the public employees' and teachers' retirement systems. Both programs have been underfunded by billions of dollars, and while the Legislature has been working to catch up, Stoltze said he'd like to see more progress.

"I think we should have put a bigger chunk in there (last session)," he said. "It's like paying off credit card debt. There's no glamour in it, but you got to do it, and if you don't, it will eat you alive.

Newly elected Sen. Menard and Sen. Charlie Huggins, R-Wasilla, did not returns calls for comment for this story.

Find S.J. Komarnitsky at adn.com/contact/skomarnitsky or 352-6714.

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