Morning Headlamp – Budget cuts, PFD reductions and an income tax – is everything on the table?

The Senate Energy and Natural Resources Committee will hold a hearing Thursday looking at how energy and mineral production in Alaska can improve infrastructure and create jobs. The panel has convened multiple hearings over the past month on infrastructure reform, a White House priority.

Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) intends for her panel to play a major role in crafting a large-scale legislative package on projects to improve the country’s roads, bridges, airports, water and transit systems. “Everyone else is talking about infrastructure and what they can contribute to the package,” she said during a hearing last week on the topic (E&E Daily, March 22). “I think within this committee we have the most exciting part of that portfolio.”

Alaska’s unemployment rate in February was the second-highest in the nation as the state is wracked by a deepening recession. The federal Bureau of Labor Statistics listed Alaska’s February unemployment rate at 6.4 percent, ahead of only New Mexico’s 6.8 percent among U.S. states and the District of Columbia. The national unemployment rate for February was 4.7 percent.

The Alaska House Finance Committee received a new version of House Bill 115, which proposes to use the investment earnings of the Permanent Fund to generate about $1.9 billion per year for the deficit. In the process, dividends would be cut to $1,250 per person. The new version of HB 115 contains a progressive tax rate that increases as a person earns more money. A single person making $50,000 per year would pay $992.50 in state income tax, or 1.54 percent of the person’s income. A married couple with two children and a combined income of $100,000 per year would pay $1,483, or 1.48 percent of their combined income. Compare HB 115 to the plan proposed by the majority in the Senate. There, lawmakers have proposed a similar Permanent Fund draw with Senate Bill 26, which passed the Senate earlier this month. SB 26 keeps less of the dividend: Alaskans would be limited to a $1,000 dividend for this year and the next two. Instead of an income tax and higher oil tax, the Senate has proposed cutting state spending by $750 million; a reduction spread over three years.

Hilcorp Alaska said Saturday morning it has agreed to temporarily shut down oil production at two platforms in Cook Inlet to fight a leaking natural gas fuel line. Pressure in the line will be reduced to about 65 pounds per square inch, from 145 pounds per square inch. The reduction was made after discussions that included the Alaska Department of Environmental Conservation.

Alaska lawmakers claim to find it more and more difficult to identify services to cut in attempt to close the state’s budget gap. The Senate majority says there’s still enough waste in state government and is proposing to cut $300 million from the $4.4 billion operating budget. But as it nears the end of its budget review, the Senate majority has so far identified actual reductions of roughly $190 million, or a little less than two-thirds of its pledged amount — and that number includes the $120 million in cuts sent to them by Gov. Bill Walker in his initial budget proposal, leaving $70 million as their own.

An Alaska federal judge agreed to hit pause on Pebble Limited Partnership’s lawsuit against the Environmental Protection Agency one more time. On March 20 U.S. District Court of Alaska Judge H. Russel Holland signed an order to stay proceedings in the suit until May 4, the deadline by which he expects Pebble and the EPA to have reached a deal to close the case, the order states.

Anchorage-based company Quintillion will turn on its fiber optic service for the Prudhoe Bay and Deadhorse areas. But for the rest of its Alaska land sites, including Nome, service won’t be available until an undetermined date later this year. With Phase 1 of the three-phase project nearing completion, subsea cable will come to land in six communities — Nome, Kotzebue, Point Hope, Wainwright, Utqiagvik and Prudhoe Bay. Other sites may be added in Alaska as well. Fiber optic cable provides faster service than microwave and satellite connections. Overall, Quintillion says it could provide a 30-terabit-per-second system.


First Reads

Pebble, EPA pushing to settle lawsuit

Alaska Journal of Commerce, Elwood Brehmer, March 22, 2017

Quintillion set to switch on its broadband service in rural Alaska this year

Alaska Dispatch News, Tyler Stup, March 27, 2017

Hilcorp agrees to temporarily shut down oil production to fight Cook Inlet gas leak

Alaska Dispatch News, Alex DeMarban, March 27, 2017

Alaska spends far less on government than it did two years ago. But is it ‘right-sized’ yet?

Alaska Dispatch News, Nathaniel Herz, March 27, 2017

Panel’s next infrastructure hearing focused on Alaska

E&E News, Kellie Lunney, March 27, 2017

House’s proposed income tax would hit rich Alaskans most, but you’ll pay too

Juneau Empire, James Brooks, March 26, 2017

Alaska unemployment second-highest in nation amid statewide recession

Alaska Dispatch News, Chris Klint, March 27, 2017