Alaska editorials

Here is a sampling of editorial opinions from Alaska newspapers:

April 29, 2017

Ketchikan Daily News: To tax or not to tax

Cut or tax, it’s that simple.

And capping the Alaska Permanent Fund Dividend payouts is essentially a tax; it has the same effect of taking money from Alaskans.

Not that Alaskans worked for the dividend. All it takes for most Alaskans to receive a payout is to live and breathe Alaska’s air during a specific period of time each year.

Alaska is a rich state, both in cash and in natural resources that can be turned into cash. But it is operating with a $2.9 billion budget deficit.

The state Senate has proposed capping the dividend payouts at $1,000 for the next three years and making further budget cuts.

The state House also proposed a dividend cap, but at $1,250 for two years. Instead of cutting further, it voted for a state income tax.

The House plan eliminates the deficit. The Senate plan covers 88 percent of the deficit, with the remainder reminding the state to contain spending, and requires continued spending from state savings accounts.

However, the Senate plan also is believed to begin regrowing one savings account - the Constitutional Budget Reserve - after 2022.

Various studies of the matter come to an array of conclusions. The latest by a liberal Washington, D.C.-based Institute on Taxation and Economic Policy shows that cutting dividend payments would create a worse hardship for middle-income Alaskans than an income tax and raise the same amount of money.

Low-income Alaskans would pay nothing through the income tax. For all else, the tax brackets would range from 2.5 percent to 7 percent for Alaskans with income over $250,000.

No sales tax proposal has been put forth.

The House’s proposal for both an income tax and a reduction in dividend payouts would be a double dip into Alaskans’ pockets. With both being a component of the House proposal, there’s no point to the discussion of which is worse. The Senate proposal goes only half as far into Alaskans’ pockets. Still, with cuts, Alaskans often will be called upon to make up for losses in state services and programs through local communities or with individual contributions.

This week’s glimmer of hope comes with President Trump’s executive order to allow areas of the Beaufort and Chukchi seas off Alaska to be explored and developed for energy. It’s oil energy that has paid Alaska’s bills for 40-plus years. With untapped natural resources remaining, as recent discoveries prove exist, and a change in federal policy, that oil revenue could come to the state. When the price might rise is an uncertainty.

Revenue-generating business must continue to be encouraged to invest in Alaska, whether it’s oil or any other enterprise. That translates into the state doing smart business deals and reducing red tape where applicable.

Given that it appears the Legislature will take every minute it’s allowed and possibly then some ordered by Gov. Bill Walker, it’s probable that at least the permanent fund dividend payouts will be capped somewhere between $1,000 and $1,250 for multiple years.

An income tax is unlikely, especially without an expiration date. Most Alaskans know that, short of another North Slope oil find like that of decades ago, the tax would become eternal. The next legislative conversation would be about how to increase it.

More likely than not, the Legislature will agree on the cap, which Gov. Walker tested for last year when he reduced it for the 2016 payout, and then cut. Cuts aren’t deep enough to change the wide range of public opinion when it comes to an individual income tax - yet.

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April 29, 2017

Peninsula Clarion: Road project has long-term benefits for peninsula

It’s a good thing when a project can kill two birds with one stone - or as is the case with planned improvements to the Sterling Highway between Soldotna and Clam Gulch, make the road safer for motorists while enhancing fish passage on the streams it crosses.

The plan from the Alaska Department of Transportation and Public Facilities is to widen the existing shoulders from 4 to 8 feet, add rumble strips and reflective striping, and install a safety edge, among other improvements.

Where the highway crosses salmon streams, including a tributary of Slikok Creek, Coal Creek, Crooked Creek, and an unmanned creek near Clam Gulch, existing culverts will be replaced with larger structures that will better allow juvenile salmon access to areas upstream of the road crossing.

In fact, fish passage had been identified as a significant issue on the Kenai Peninsula years ago - in a 2001 survey of culverts at road-stream, researchers found that 78 percent of the culverts on the peninsula were not adequate for fish passage.

Since then, an effort, spearheaded by the Kenai Watershed Forum, has been under way to upgrade inadequate culverts. Many have been replaced; others have been altered to slow the current passing through.

Planning road crossings that account for fish passage is now as much a part of road design as planning safe intersections.

Improvements to the Sterling Highway also are long overdue; if you’ve had the opportunity to drive on highways in other parts of the state that have undergone similar improvements, you know how much of a difference they make. Between 2006 and 2010, that stretch of road saw 266 traffic accidents; 93 of them, or 35 percent, could have been less severe or avoided altogether had the proposed improvements been in place.

Construction is planned for the summer of 2018, and we know to expect a long, slow drive for anyone who will be headed that direction, with likely detours around Kalifornsky Beach Road (which, by the way, will be seeing some improvements this summer, including traffic lights to be installed at the Gas Well and Ciechanski intersections; find details here: https://www.kbeachrd.com/).

While there will be some short-term inconvenience, we look forward to the long-term benefits, including a safer road and better salmon habitat, both of which are a boon for the Kenai Peninsula.

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April 30, 2017

Fairbanks Daily News-Miner: Alaska could benefit from executive order seeking to open Beaufort, Chukchi seas

President Donald Trump gave Alaska some good news late last week when he signed an executive order directing Interior Secretary Ryan Zinke to review a plan from President Barack Obama’s administration that banned drilling in parts of the Pacific, Arctic and Atlantic oceans. Though a price slump that began in 2014 has reminded Alaskans to plan for a future in which oil no longer provides the lion’s share of state revenue, the commodity remains a vital part of the Alaska economy and likely will remain so for decades to come. The executive order relating to offshore drilling provides hope that drilling on the outer continental shelf off the state’s northern coast may be allowed again.

Though portions of the Beaufort and Chukchi seas were briefly opened to exploratory drilling on the outer continental shelf, Royal Dutch Shell, the only major producer to drill exploratory wells, exited the area in 2015. The company said it had spent more than $7 billion on the project and cited disappointing results from its test wells, as well as an unpredictable federal regulatory environment, as reasons why it was leaving.

The end of OCS exploration in Alaska and President Obama’s 2016 order placing the area off-limits were cheered by those who felt offshore drilling in the Arctic was unsafe or unnecessary. But it was mourned by those in the oil industry in Alaska as well as many outside it who recognized the decline of other traditional fields and the desirability of keeping petroleum prospects healthy in the state. Although offshore oil might not provide the same royalty and tax revenue benefits as development onshore, particularly on state-owned land, it would nonetheless provide a boost in jobs and economic activity.

For a variety of reasons, however, it would be wise for Alaskans not to put too many eggs in the basket of offshore drilling. Though President Trump said he is modifying the text of the Obama memorandum banning offshore leasing in the Arctic to revert back to earlier designations for how leases could proceed, the move is legally untested, as was President Obama’s order placing those areas off-limits in the first place. With conservation groups spoiling for a fight on executive orders related to resource development, the issue is likely to end up the subject of a lengthy court battle.

It’s important, too, to remember that federal regulations were only part of the reason why companies ceased exploration in Alaska’s offshore areas. The other, high costs, is a factor beyond the control of the state or President Trump. Until oil prices rebound significantly, it’s hard to see major producers being willing to make the kind of investments Shell made in the Beaufort and Chukchi seas again.

The executive order on offshore drilling remains good news for the state. As a resource state, Alaska needs flexibility to develop oil and gas responsibly. The potential for offshore leasing, though it would occur in areas under federal control, would open up significant areas thought to be key to that effort in the long term. And timing is important. The longer the U.S. delays in acknowledging its Arctic resource potential, the more likely it will be that those opportunities will be endangered by other nations - such as Russia - that are moving aggressively to develop.