House guts Knowles' gasline spending proposals

Posted: Sunday, February 18, 2001

JUNEAU (AP) -- The House passed a supplemental budget Friday that drastically scales down urgent spending sought by Gov. Tony Knowles to promote development of a gas pipeline, inserting instead $1.5 million to lobby for oil drilling in the Arctic National Wildlife Refuge.

Budget leaders in the Republican-controlled Legislature questioned whether the money Knowles asked for is necessary in the fiscal year that ends June 30, given that no application to build a gas pipeline from the North Slope to serve energy-hungry markets in the Lower 48 has been filed.

The House approved only $600,000 of nearly $2 million Knowles sought in the ''fast-track'' supplemental, the more urgent of two spending bills designed to cover spending not authorized in the main budget bill passed in the spring.

''What we tried to focus on were efforts that were tangible,'' said House Finance Committee Co-Chairman Eldon Mulder, R-Anchorage.

The money would go to a pipeline coordinator in the Department of Natural Resources, where it could be doled out to other agencies.

Knowles sought money for a variety of reasons, ranging from field work by the Department of Fish and Game to gas tax research by the Department of Revenue. The goal was to have as much information in hand as possible when a pipeline application is filed, so permits could be issued swiftly and the project could go forward quickly.

''I don't know why anyone would want to put the brakes on a project whose time has really come,'' Knowles said. Without the money, permitting agencies could lose the summer field work season and put the project a year behind schedule, Knowles said. ''The urgency of it is the market is ripe right now.''

The portion of Knowles request that irked lawmakers most was more than $400,000 Knowles requested for the activities of the Alaska Highway Gas Policy Council, a panel Knowles appointed to hold public meetings and collect testimony on questions such as whether the state should take an ownership stake in the pipeline and how gas can be used to benefit Alaskans along the pipeline route and elsewhere.

Republican lawmakers dismissed the proposal as unnecessary public relations, suggesting the money could be better spent elsewhere. But Knowles defended it Friday.

''There's a lot of questions that Alaskans, very legitimately, need to talk about and think about,'' Knowles said. ''The public process is important.''

In the House bill, the money is diverted to Arctic Power, a private group that advocates oil development in ANWR. The organization has received a steady stream of money from the state in recent years as it mounted futile campaigns to open the reserve.

However, the election of oil-friendly George W. Bush as president, along with high energy prices and tight supplies in the Lower 48, sparked new hope for development in ANWR and prompted Arctic Power to seek an additional $1.5 million.

''The opportunity for consideration of opening ANWR is greater now than ever,'' Mulder said.

The appropriation drew protest from Democrats in the Legislature, especially a provision that allows Arctic Power to keep the money until 2006 if it isn't spent in an intensive lobbying effort this year.

''This is an enormous amount of money -- money that could be spent on state programs,'' said Rep. Sharon Cissna, D-Anchorage.

The budget passed Friday spends nearly $5 million from the state's general fund and more than $27 million overall. Most of the rest comes from the federal government. Among the items paid for in the bill:

--$608,400 for the Alaska Redistricting Board, which must begin a frantic rush to redraw the state's election districts when it receives population data from the 2000 Census in a few weeks.

--$600,000 for the Department of Revenue for expert analysis of a major oil and gas property tax dispute on the North Slope.

--$500,000 for the Special Olympics to help pay for lodging and other costs at the Special Olympics World Games in March.

--$252,000 for the Division of Elections to offset the cost of the separate Republican primary required by a U.S. Supreme Court decision that invalidated Alaska's blanket primary.

--$195,000 to the Department of Administration to increase pay for nurses in pioneers' homes, where below-market wages were causing staff shortages.

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