Morning Headlamp: Federal Budget Reductions Defended; House Majority Budget and a Downgrade

 AK Supreme Court hears case on PFD payouts. The Alaska Supreme Court heard arguments on Tuesday in a lawsuit over whether Gov. Bill Walker had the authority to veto part of the 2016 Alaska Permanent Fund dividend, an action he took last year in the face of a large budget deficit. The veto halved dividends to just over $1,000, causing divisions across the state over whether the governor took the right approach to dealing with Alaska’s fiscal crisis.

Headlamp watched the hearing and noted the justices took issue with Senator Wielechowski’s lack of delineation between “proceeds” and “income” as they related to the dedication clause and with his continued referral to voter and legislative intent. The state’s attorney compared the PFD veto to former Governor Frank Murkowski’s veto of the longevity bonus. 

Downgrade Again? S&P put Alaska’s AA+ credit rating on Credit Watch with Negative Implications. “(W)ithout structural fiscal reform in the 2017 legislative session, we would likely lower the state debt ratings,” S&P said, adding that it expects lawmakers to enact a budget for the 2018 fiscal year in the next 90 days. If the state adopts “a balanced budget with fiscal reforms that does not significantly rely on reserves,” the agency said it may remove the state’s ratings from the credit watch without a downgrade. The ratings agency indicated that the state finances have been essentially running on reserves the last several years.

Note to House Majority: you passed an 89 page amendment at the 11th hour containing a $5 billion draw from the earnings reserve to fund your unicorn budget. THAT would be considered to be “significantly relying on reserves.” 

 Zinke defends budget cuts. Interior Secretary Ryan Zinke on Tuesday defended the $1.6 billion funding cuts President Donald Trump has proposed for his department, telling a Senate hearing that “this is what a balanced budget looks like. I support the president’s budget,” Zinke said, tough decisions and all. “It does not favor oil and gas and coal over any other strategy.” Committee Chairwoman Lisa Murkowski, R-Alaska, supported Trump’s effort to seek revenue from gas exploration in her state, which she said has the nation’s highest unemployment rate. According to Murkowski, developing “one-ten-thousandth” of Arctic refuge would generate tens of millions of dollars and create much needed jobs.

Deep in the heart of Texas. Hydraulic fracturing hasn’t contaminated groundwater in Texas, isn’t an earthquake hazard, and has been a boon for the state’s economy, according to a study released Monday.  The new study’s conclusions on drinking water are in line with multiple other studies of hydraulic fracturing, popularly known as fracking.

The Vikings. Norway offered a record number of blocks for oil and gas exploration in the Arctic Barents Sea on Wednesday, brushing off concerns about the risks of drilling in the remote, icy environment.

The oil ministry proposed 102 blocks, comprising 93 in the Barents Sea and nine in the Norwegian Sea.

The application deadline for Norway’s 24th Arctic licensing round is Nov. 30 and the aim is to announce awards during the first half of 2018, the ministry said.

Alaskan to head Fisheries Management for NOAA. Congratulations to Chris Oliver of Anchorage on his recent appointment to manage fisheries nationally for the National Oceanic and Atmospheric Administration! Oliver has since 2000 led the North Pacific Fisheries Management Council, for which he has worked for 27 years. He gained broad support for the position from fisheries groups and members of Alaska’s congressional delegation. The agency is responsible for managing sustainable U.S. fisheries under the Department of Commerce, as well as recovery and protection of species of whales, sea turtles and corals. “I can’t think of a more qualified or capable individual to manage America’s fisheries than Chris Oliver – the first Alaskan ever to permanently hold this important role,” said Alaska Sen. Dan Sullivan.


First Reads

Did Gov. Walker have veto power over PFD payouts? Alaska Supreme Court hears the case.

Alaska Dispatch News, Jeanette Lee Falsey, June 21, 2017

S&P warns Alaska again of possible credit downgrade, citing need for fiscal reform

Alaska Dispatch News, Annie Zak, June 21, 2017

Alaskan appointed to head U.S. fisheries management for NOAA

Alaska Dispatch News, Erica Martinson, June 21, 2017

Study Finds Fracking Doesn’t Harm Drinking Water in Texas
The Daily Signal, Fred Lucas, June 19, 2017

Norway offers record number of blocks for Arctic oil exploration
Reuters, Nerijus Adomaitis and Alister Doyle, June 21, 2017

Zinke defends Trump’s sharp cuts at Interior. ‘This is what a balanced budget looks like.’
The Washington Post, Darryl Fears, June 20, 2017