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Alaska Legislature

House panel holds back cash subsidies for oil companies to fund other projects

  • Author: Nathaniel Herz
  • Updated: June 12, 2017
  • Published June 12, 2017

JUNEAU — A Democratic Alaska House leader is reporting a rare sighting in Juneau: a potential bipartisan deal on a significant piece of legislation, the capital and supplemental spending bill.

The House Finance Committee approved a modified version of the legislation, Senate Bill 23, at a Sunday hearing, with changes that include $7 million to replace a school in the village of Kivalina, preserving money for the state-sponsored natural gas pipeline project and far less cash to pay subsidies to oil companies.

The largely Democratic House majority was working with a draft of the bill already approved by the Republican-controlled Senate, and it made its modifications in close consultation with Senate leaders, said Rep. Neal Foster, D-Nome, the co-chair of the House Finance Committee.

The goal, Foster said, is for the House to pass an updated version of the bill that the Senate will also approve, avoiding the need for a conference committee to resolve their differences. If that happens, it would be a rare show of cooperation between the two chambers, which have clashed for months over the best way to fix Alaska's $2.5 billion deficit and other policies.

"I never want to make promises. But we're trying to avoid going to conference, and as far as I know, I think this gets us there," Foster said.

Senate Finance Committee co-chair Anna MacKinnon, R-Eagle River — who Foster said was his counterpart in recent discussions about the bill — didn't respond to a request for comment Sunday.

Asked if the apparent agreement signals progress on the larger fiscal issues still facing lawmakers, including the state operating budget, Foster sounded cautiously optimistic, describing it as "another piece that's mostly done."

Among the House Finance Committee's major changes to the Senate's version of the proposal:

— Setting aside $40 million for cash subsidies claimed by oil companies, a sharp reduction from the $288 million proposed by the Senate. The cash subsidies, even though unpaid, would still be owed to the companies.

— Rejecting a Senate plan to send $50 million from a natural gas pipeline project account to pay for more troopers, prosecutors, road maintenance and snowplowing.

— Setting aside $7 million to replace Kivalina's school, which Foster said would uphold the terms of a state legal settlement over rural schools.

— Taking away half of the money lawmakers had set aside in previous years for two megaprojects that have since stalled amid the state's budget crisis — the road out of Juneau and the bridge from Anchorage that would span Knik Arm.

— Adding $1 million that would pay Planned Parenthood's legal fees in an abortion-related lawsuit that the state lost — a request from Gov. Bill Walker's administration that the Senate had refused to include in its version of the capital budget, even though the two sides agreed to a settlement over legal fees and the deal had been approved by a judge. The new version of the budget doesn't name Planned Parenthood but makes clear that the state can pay out the settlement.

SB 23 goes next to the House floor for a vote.

If it passes, it would return to the Senate for a concurrence vote and then, if approved, head to Walker for a potential signature.

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