Republicans call session a success

JUNEAU — Republican leaders hailed the just-ended legislative session as a success in which they accomplished some of their top priorities: addressing oil taxes and energy concerns and exercising fiscal restraint.

Minority Democrats, meanwhile, were much more somber in their assessment Monday. Senate Minority Leader Johnny Ellis called it the worst session in recent history for its long-term effect on Alaskans and the treasury.

“This was the most successful legislative session in the history of the state — for the oil industry,” said Sen. Hollis French, D-Anchorage.

During the 90-day session, which ended Sunday, the Legislature passed a number of major bills, including a multibillion-dollar tax break to oil companies as a way to increase production.

Legislators also passed a bill meant to get an in-state gas line to a point where it will be known if there is sufficient interest for the project to move forward. They authorized up to $275 million in financing for a liquefied natural gas plant and distribution to bring some energy relief to the
Fairbanks area.

Lawmakers also passed operating and capital budgets that leaders described as responsible, given concerns about the state’s fiscal future.

They failed, however, to come to agreement on a multiyear education funding package, which had been talked about off-and-on throughout the session. Also, a bill that would define medically necessary abortions for the purpose of state Medicaid funding and a water permitting bill were held over until next year.

After the Legislature adjourned late Sunday, Gov. Sean Parnell, who had unsuccessfully pushed oil tax changes of some kind since 2010, came down to the second floor of the Capitol, where the House and Senate meet, to shake hands with majority lawmakers.

The mood was light, even jovial, in the hour or so leading to adjournment as the House and Senate waited for the last bills in play to move — a departure from the last two years, which saw end-of-session meltdowns that led to special sessions. A Senate concurrence vote on oil taxes took place during the afternoon, leaving the evening for the capital budget and a handful of other measures.

During last year’s elections, Republicans wrested control of the Senate from a bipartisan coalition that had been in charge since 2007, putting Republicans in control of the House, Senate and governor’s office. 

Oil taxes were a major issue in several races.

“What you campaign on is what you’ve got to do, and that’s what we’ve done,” Senate Majority Leader John Coghill, R-North Pole, told reporters late Sunday.

Critics fear the oil tax bill, Senate Bill 21, will not lead to the kind of production needed to offset revenues losses. By one estimate, it could cost the state up to $4.7 billion through 2019. 

Rep. Craig Johnson, R-Anchorage, who supported SB 21, said it’s anyone’s guess when the state might recoup its lost revenue given uncertainty in the price of oil, but he said he expected changes from the oil companies “very quickly.”

“I put my political career on the line,” he told reporters early Monday. “I put my children’s future on the line. I believe what we did was the right thing. I think the investment will come.”

About 90 percent of Alaska’s unrestricted general fund revenue comes from oil. Production has been on a downward trend since the late 1980s, through a number of different tax structures, but higher prices in recent years have helped mask the budget impact.

Parnell told reporters Monday that Alaska’s future is more secure than it was before the passage of the bill.

Legislators plan to meet during the interim to dig into parts of the budget, including education. School districts didn’t get the kind of additional funding they’d wanted this session, in part because there wasn’t agreement on how best to provide it.

“I think that the biggest issue that we really have is we want more accountability before more money, but we don’t know what we want them to do. That’s the problem,” House Speaker Mike Chenault said.

He said he hopes interim work will provide greater clarity on this by next session. The capital budget includes $21 million for student safety and security in larger school districts and student safety and security, fixed costs and energy relief in smaller districts.

Rep. Bill Stoltze, co-chair of the House Finance Committee, said he wanted to make a “meaningful contribution” to education and tried to save as much room as he could in the budget to do so.