Alaska Legislature

Alaska Senate proposes $288 million for oil company subsidies, plus cash for King Cove road

JUNEAU — Oil companies would get $288 million in cash subsidy payments under a new capital and supplemental budget bill released Monday by the Alaska Senate's Republican-led majority.

The subsidy payments were contained in the supplemental part of the bill, Senate Bill 23. The supplemental appropriations bill is usually designed to fix overruns in the previous year's budget — but it can also serve as a vehicle for expenses lawmakers don't want on the books in the regular budget for the next fiscal year.

New capital items in the bill include a $4 million renovation of the Permanent Fund's Juneau headquarters, plus $10 million for the proposed road from King Cove to Cold Bay through Izembek National Wildlife Refuge on the Alaska Peninsula.

Proponents are hoping the road project — sidelined under President Barack Obama over environmental considerations associated with the refuge — can proceed under the Trump administration.

The Senate Finance Committee, which wrote the substitute version of SB 23 originally proposed by Gov. Bill Walker, inserted cash for the road at the request of Walker's administration, according to an aide to Eagle River Republican Sen. Anna MacKinnon, co-chair of the committee.

[New interior secretary brings new hope for a road out of King Cove]

The committee also added $25 million for deferred maintenance — $5 million of which would go to the state University of Alaska system.


But the committee rejected a move by Walker to take $35 million from the proposed road leading out of Juneau — a project he shut down in December.

Walker's capital budget proposed to redistribute the money from the project for "transportation and infrastructure" in the area that would have been served by the road. But those sections were removed from the Senate's substitute proposal.

The Senate also rejected a request by Walker's administration to pay a $1 million legal settlement to a group of plaintiffs led by Planned Parenthood, which won a lawsuit in which the courts declared an anti-abortion parental notification provision was unconstitutional.

Alaska law requires the payment of full attorneys fees to the winners of a constitutional claim, and the settlement was approved by Superior Court Judge John Suddock in October.

"Our caucus doesn't support it," MacKinnon said in a brief interview Tuesday. She added that she thought the House would consider putting the money back in.

The capital and supplemental budget bill still must be approved by the Senate Finance Committee and the full Senate before moving to the House, where the largely Democratic majority coalition has generally opposed paying out the subsidies to oil companies.

Both chambers have advanced legislation this year that would phase out the state's system of oil company subsidies. But Walker has vetoed hundreds of millions of dollars in payments in the past two years, leaving a big backlog that the Senate wants to reduce.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at