Gas, economy, schools top Senate issues

Posted: Wednesday, October 27, 2004


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  Tom Wagoner

Bob Merchant



36260 Wren Avenue

Kenai, AK 99611

Phone: (907) 283-9447

Marital status: Married

Children: 3

Employment-business: Retired from construction, commercial fisher

Education: Bachelor's degree in history from Fresno State University, California


Tom Wagoner


(Republican Incumbent)

4040 Primrose Place

Kenai, AK 99611

Phone: (907) 283-4930

Marital status: Married

Children: 2

Employment-business: Commercial fisher, rental property owner

Age: 62

Education: Bachelor's degree in technical design and bachelor's degree in education from Eastern Washington University; master's degree in public school administration from UAA

1. What do you think are the most important issues facing your constituents and what would you do about them?

BOB MERCHANT: School funding is one. The state is responsible for K through 12th grade. We have the borough's contribution, but it's capped. It's time to look at the cap. Perhaps the borough could take some responsibility off the shoulders of the school district, such as the cost of building maintenance, food service and extra curricular activities.

I believe the central Kenai Peninsula has gone long enough without representation on the Board of Fish. We need to get some resolution to the fish fights where all sides can be happy. We (the peninsula) should have at least a commercial fisherman and a sport fisherman on the board. We are the most heavily sportfished area of the state.

I'm concerned about the supply of natural gas. That is a high priority. The industries on the North Road are looking dim. They need that gas. That's connected to jobs for our residents.

TOM WAGONER: Gas to Cook Inlet; I hear that all the time. There are lots of jobs on the Kenai Peninsula directly tied to commercial quantities of natural gas. One thing I've been working hardest on over the summer is trying to get the pipeline untracked. It looks like it's got a good start.

Education is still a concern. Even with the money put in last year, our local district is not able to hire back laid-off teachers. Any study will demonstrate the direct relationship of achievement to student-teacher ratio, especially in the beginning grades. We have to take a real hard look at those ratios in the first through fourth grade.

I have concerns with commercial fishing. We've just started having a little turnaround there.

Another concern is jobs and what's going to keep people here in future.

2. The fiscal gap facing the state has yet to meet a solution the Legislature couldn't kill. What new suggestions do you offer to the debate that might move lawmakers toward that solution?

MERCHANT: I don't know that they've covered everything possible. The general drift comes down to raising money. But government tends to grow into the higher amount. That seems to be the pattern of government. Inflationary costs are nationwide and every government has to deal with those. What I see wrong, simply put, is that our government is just to big. I want to stress need for discipline.

If the Legislature is going to close the fiscal gap, it will have to have a plan that would reorganize government, by consolidating departments, cutting down on number of personnel. The state Legislature probably causes more workload for employees than anyone else. There's a lot of paperwork. There are too many people in charge; too much middle management.

WAGONER: I don't think the Legislature failed. It was evident when I got there last session that there wasn't going to be a gap. The price of oil was steadily increasing.

It is possible the Legislature will have a $480 million surplus to think about (spending). I don't want us to go into a feeding frenzy. That will be the major hurdle. That money should be used to pay back the debt to the Constitutional Budget Reserve that was incurred by the prior Legislature.

3. What are the prospects for your district with regard to the Pebble mine project and what are you prepared to propose to bring some of that business to the Kenai Peninsula?

MERCHANT: Our ports in Homer, Kenai and Nikiski are ready for barge traffic. I would assume we (the peninsula) would be a portal.

WAGONER: The peninsula stands in a good position to do most of the logistical support for development when it takes place. We have a deep water port in Nikiski capable of barge loading and unloading. The same goes for Homer where they also have a capable private dock.

We are all well in line to get a lot of the business. We have to get local communities together with mine developers. That's the grass-roots of it.

The Legislature can help, not by giving away the farm permit-wise, but by making sure the project is not held up too long in that process. We should keep close watch on that and see how well it's working.

4. Next year it is likely that despite the price of oil there will be calls for cuts in state expenditures. Where would you cut the budget? Explain your understanding of the effects of those cuts on the people dependent on programs losing funding?

MERCHANT: In order to put together a fiscal plan, you have to have a budget. Take the average state income and fit our government into that average. Get rid of the highs and lows of oil price fluctuations. Then, once you decide what size will fit without going into a deficit, then you can start to look at services and effects. If you are going to ask people for more taxes, you have to justify it and say we can't get our government and services to fit into this projection.

We haven't heard a discussion like that. One thing that will have to happen is that the number of personnel will have to be reduced.

We are spending a lot of money and have for the last three years in row, on the University of Alaska. The UA is constitutionally organized as a corporation. It's supposed to be self-funding. The Legislature needs to do what it takes to move the UA toward self-funding. We all know about their land grants.

I'd also work to cut down on intergovernmental costs.

WAGONER: I'd try to cut where the people aren't dependent on programs.

One area we could cut without hurting fisheries is the regional fisheries offices that Fish and Game has established. All they are is an impediment to local fisheries offices in coordinating and communicating with the commissioner's office.

I'd look at the Department of Transportation. I have never seen so many surveys done on highways in my life as this state does. There is no reason we couldn't cut back on engineering and design work done by state and contract that out. We have an abundance of engineers who work for DOT.

5. Where do you stand with regard to state involvement in a future gas pipeline? Royalties? Percent ownership?

MERCHANT: I've heard the governor on this. He literally said the line couldn't be built without some ownership by the state and a share of the risk.

Last winter, I guessed that was what they were looking at to be heavily involved in the risk part.

I'm in favor of an all-Alaska line. Alaska could take its royalty share in reduced-cost gas to be used in the state. We should get something tangible for the investment rather than just a line and jobs. Investment money should come from bonding. To use the permanent fund (for financing), it would have to be a pretty safe risk.

WAGONER: Do we want to take our royalty gas in-kind and dedicate it to use first by the state of Alaska? Absolutely. To the point we can, we should take the gas in-kind. There is a need for gas at Agrium and ConocoPhillips and it is critical we get a steady gas supply for those plants. ConocoPhillips' export license is up for renewal before 2009. The feds won't renew it if there is a domestic need for the available gas. Agrium can't wait even that long.

There is another issue whether the state should hold an equity position in pipeline. Some people say they wonder why not invest more of the permanent fund in Alaska? But if we put it into a pipeline it might not earn as much as it does in the market. We might be better off leaving the permanent fund invested where it is and sell pipeline low-interest revenue bonds instead.

Another idea I've heard from constituents is to allow the public to invest their permanent fund dividends in the pipeline. People could buy shares of the state's portion of pipeline.

6. What would you propose for protecting the environment of Alaska?

MERCHANT: We have done a pretty good job of it in the past. But some protections are starting to get eroded and I don't like that. I would support stricter environmental protections than even the federal government requires.

I objected to moving the habitat division of Fish and Game into the Department of Natural Resources. The Department of Fish and Game had been so successful. I saw no reason to take that risk. It is an irony that the governor would lower protection standards to develop a nonrenewable industry and risk a renewable resource.

WAGONER:One thing is to watch the Murkowski administration. It is talking about being more lax on mixing zones. I don't' think we need to be more lax at all. You don't take a chance on affecting streams that have wild stocks. I don't think it is necessary to loosen the restrictions on mixing zones. It's a critical issue statewide.

The environmental community was upset by the changes we made in the coastal zone management program. But I've heard of no problems from that. No one has contacted me about that. I think we are pretty environmentally conscious today. We could open ANWR tomorrow and take care of the environmental concerns.

7. What would you propose to expand business opportunities and jobs in Alaska?

MERCHANT: We have to attract new commerce, industry and business. I can't think of sweeter carrot than cheap energy. That's a good reason to risk some money in building that gas line.

We need to make sure there is a huge supply of gas for industry. That will bring jobs to Alaska.

The Legislature could actively compete with other states to attract new industry by marketing the state. Not a give away, just business-friendly tax laws.

WAGONER: One thing is build the pipeline. Sometime around 2012 to 2014 we could bring gas to market. To do that will take a lot of things up front, and that will involve businesses. A lot of people on the peninsula have a lot of expertise in those businesses.

We need to continue to take care of our infrastructure. The amount of money it will cost to build a bridge across Knik Arm could do a lot for our infrastructure. We have to make some rational judgments about what's overall good for the people of Alaska.

I would like to see a road down the west side of Cook Inlet or into Bristol Bay. Open the country up. A road to Bristol Bay would be very instrumental in keying development in those areas. We have mineral deposits there and no roads to get to it.

8. Other concerns.

MERCHANT: I'm disappointed in the Legislature's track record. I'm disappointed there is no fiscal plan and no evidence that they're working on one. It's been a succession of stopgap measures. I want to get in there and do it. It seems to be easier for the Legislature to raise taxes and pay bills than to get at the root problems. I don't want to call them a do-nothing Legislature, but we have problems in this state that aren't going away.

WAGONER: There is a lot do, but education is the most important. I always say that we can spend it in the front end or we can spend it on prisons. Our education system was the envy of everybody in the country. We once had no trouble recruiting teachers. I've seen a report that put Alaska as number eight, but if you put in the cost of living factor we're 42nd.

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