Parnell sets new benchmarks for gas pipeline
JUNEAU — Gov. Sean Parnell on Wednesday set new benchmarks for progress on a major natural gas pipeline project in Alaska and urged lawmakers to act this year on legislation to change the state's oil tax structure.
In his fourth State of the State address, Parnell told a joint session of the Legislature that he wants the companies involved in advancing a long-hoped-for gas line project to settle on a concept by Feb. 15. That is, he wants details, like the project's size, the location of the gas treatment plant, the size and scope of a liquefaction plant, and the number of off-take points where gas can be diverted for use in-state.
By spring, he said he wants the companies to finalize an agreement to move into a stage that would include preliminary engineering and a financing plan. He also wants a full summer of field work to begin this year.
It was in Parnell's State of the State speech last year that he set benchmarks for progress that helped jumpstart the seemingly stalled project. The North Slope's three major players and TransCanada Corp. agreed to pursue a liquefied natural gas project capable of overseas exports that they have said could cost more than $65 billion. But they haven't announced specifics and haven't committed to build. They said last fall that "significant environmental, regulatory, engineering and commercial work remains to reach upcoming decisions to bring North Slope gas to market."
The oil companies have sought greater long-term certainty on Alaska oil and gas taxes, and have made clear that's a key element as they move ahead with any project. Parnell last year said that if companies met his benchmarks, the state could look at gas taxes this year.
Parnell is proposing an overhaul of the state's oil tax structure, which he has said is simpler than the current system and is aimed at encouraging new production and making Alaska more competitive. Oil production is declining, and while there is a shared goal at the Capitol to reverse that trend, there is disagreement over how best to do that. Some Democrats have already blasted Parnell's proposal as a repackaged version of his prior tax-cut bills, and as a giveaway to oil companies.
Senate Minority Leader Johnny Ellis, D-Anchorage, said if Alaska stops getting its "fair share for our oil resource, it will bust our budget and that means politicians will look to sales and income taxes and a potential raid on your PFD," he said in a Democratic response to the speech. PFD stands for Permanent Fund Dividend. Most Alaskans receive the dividend, their yearly share of the state's oil wealth.
"That's not scare tactics, that's what's coming, if this bill passes," he said.
Parnell urged lawmakers to act on making changes to the tax system.
"While Alaskans — and many of us in this room — haven't always seen eye to eye on these issues, we can all see the obvious, that unless we restore balance to our tax system, our oil fields will become obsolete," he said. "We must make reforms and we must make them now. Waiting, it only makes this problem worse."
Parnell said the question at hand was how to keep the state of Alaska strong.
"Make no mistake: Our present prosperity does not guarantee our future security. The choices we make during this short session will have long-lasting consequences. So let us choose wisely. Let us choose well," he said.
The 90-day legislative session opened Tuesday.
The governor also touched on other priorities, including public safety and building on past efforts aimed at curbing domestic violence and sexual assaults. He also said he would like to see Alaska's high school graduation rate hit 90 percent by 2020 — it's currently around 69 percent — and he called for a commitment to childhood literacy.
He also urged lawmakers to act on legislation to help speed progress on a natural gas pipeline to meet the state's demand for the fuel. And he called for lawmakers to come together and work with him to set a spending limit.
Parnell calls for end of federal overreach
Parnell is asking lawmakers to come together to end what he calls the overreach of the federal government.
He told lawmakers during his annual State of the State address in Juneau that when a federal agency tramples on Alaska's rights, the state will not "roll over; we will not lie down. We will stand up for what is right."
Last week, a federal judge overturned a U.S. Fish and Wildlife decision on the amount of critical habitat set aside for polar bears.
He says federal law allows states to regulate activities regarding lands and waters. He says it's "about time Alaskans exercise these rights over our resources."
Parnell is urging lawmakers to pass a law giving the state primacy over dredge and fill operations.
Parnell seeks to cut unemployment tax
Parnell is seeking to reform the unemployment tax law.
He tells lawmakers gathered in Juneau for his annual State of the State address that the tax burden on Alaskans and Alaska employers needs to be reduced.
The state took in an additional $20 million last year in unemployment insurance contributions even though he says the fund was funded.
He wants to create a formula to determine if the fund is solvent. If so, he wants to cut unemployment taxes.
Parnell seeks more troopers, VSPOs
Parnell is asking lawmakers to continue funding increases to law enforcement throughout the state as part of his efforts to curtail domestic violence, sex trafficking and sexual assault.
He has introduced a bill that would increase sentences for child pornography, and ensure sex traffickers serve their entire sentence, among other measures.
Parnell is asking lawmakers to pay for 15 additional Village Public Safety Officers for villages that don't have a law enforcement presence.
He's also asking the Legislature to fund 15 more Alaska State Troopers positions to cover areas where growth has strained resources: in Anchorage, the Kenai Peninsula and Fairbanks.
Financial security leads people to Alaska
Parnell says Alaska's economy is strong, and called the state an "outpost of opportunity."
Parnell told lawmakers during his annual State of the State address in Juneau Wednesday night that people aren't just looking at Alaska, they're moving here, too.
He said between 2009 and 2011, more people moved to Alaska than any other period during the last 20 years.
Parnell says there's a good reason: Alaska is financially sound with billions of dollars in budget reserves.
He told lawmakers the question before them now is how to keep the state of Alaska strong
Parnell wants 90 percent grad rate by 2020
Parnell wants to see Alaska's graduation rate increase by 20 percentage points in the next seven years.
Parnell told lawmakers Wednesday night during his annual State of the State address that the state's graduation rate remains under 70 percent.
He says that's a failing grade.
Parnell wants a new goal, a graduate rate of 90 percent by 2020.
He says reaching that goal will require raising expectations of both students and teachers.
He's also making childhood literacy another priority, and wants to improve reading instruction for kindergarten through third grade.