Recent News

A legislative agency says the state’s credit status will be at risk if the oil tax reductions proposed by the governor become law.

One of the most controversial issues expected during next year’s legislature is a bill introduced by Gov. Sean Parnell that would reduce oil taxes from the current levels by as much a $2-billion a year, depending on oil market prices.

The non-partisan Legislative Research Service reported Wednesday that the substantial decrease in revenue from the tax cut could be seen as a negative factor by credit agencies.

Anchorage Democrat Bill Wielechowski, chairman of the Senate State Affairs Committee, says the governor’s numbers show the state would be losing billions of dollars under his tax proposal.

“The governor’s numbers show that within the next decade the state will be broke. According to this non-partisan legislative research report – the research they’ve done – it is very likely to put downward pressure on our credit rating. The loss of our credit rating will have a severe impact all across Alaska,” Wielechowski says.

As an example, Wielechowski says that by lowering the credit rating by one level – from AAA to AA+ – the price for the Susitna hydroelectric project alone would increase by more than $300 million, due to higher interest on bonds for the project. He says Alaska needs the revenue to build infrastructure projects and protect jobs.

“Two billion dollars into the Alaska economy every year creates thousands and thousands of jobs across the state,” Wielechowski says. “If you take that money out of the capital budget, which is going to have to happen if you pass the governor’s bill, you’re talking about losing probably thousands of jobs all across Alaska.”

Economist Gregg Erickson is Editor at Large for the Alaska Budget Report, which reported in February on the connection between the governor’s tax cut and the state’s credit standing. He is not willing to project the effects of credit ratings on job growth.

But Erickson says the Parnell administration recognized the reason for high Alaska credit ratings was the savings and income from the current oil tax regime. In the Budget Report’s story, however, the administration denied any possible negative effects of a lower income.

“But, of course, their denial, which they issued in an e-mail to me, was totally devoid of any backup at all. They just said it,” Erickson says. “It’s been remarkable how little analysis was done to support the proposed policy. And it’s no surprise, given the lack of analysis, that they haven’t made much progress with it.”

The Parnell administration did not reply to requests for a response to the Legislative Research report, or to Wielechowski’s comments.

When Senator Lisa Murkowski’s fisheries aide pulled out from consideration for an influential job in the Obama Administration two years ago, he said it was because the process was taking too long. It turns out Arne Fuglvog was under investigation by the very agency he would have run. Fuglvog pleaded guilty last month to breaking commercial fishing law before joining Murkowski’s staff, and resigned from his Senate job right before the charges became public. His admission to falsifying catch records shook the commercial fishing industry in Alaska, where Fuglvog had served on influential councils. Now former crew members are coming forward saying they tried to turn Fuglvog in to authorities for illegal fishing for years, and felt like they were ignored. APRN’s Libby Casey reports.

Two House committees are on their way to rural Alaska to see firsthand how education funds are being spent.

The House Community and Regional Affairs and House Education committees will visit Galena and Koyukuk this week for a glimpse into life in rural Alaska.

Galena is a town of about 500 people on the Yukon River and home to a statewide boarding school and distance education program. Known as IDEA, the Interior Distance Education of Alaska supports home school students throughout the state, including Juneau.

Representative Cathy Munoz chairs the Community and Regional Affairs Committee. She says the committees want to see the results of programs they’re funding.

“We altered the foundation formula in the last legislative session to increase funding for vocational education. We also funded the governor’s scholarship program, so we’re very interested in what school districts are doing to encourage and prepare students to take advantage of that opportunity once they graduate. And then we’re also investing in vocational education infrastructure throughout the state,” Munoz said. “We’re trying to get Alaskans prepared for the jobs that are going to be required as we move forward into the future.”

The lawmakers – from Juneau, Anchorage, Fairbanks and Stony River – will also stop in Koyukuk – a village of about 100 on the Yukon River.

Munoz says the committee hopes for a clearer picture of the unique rural subsistence economy, so legislators know better how to support the communities.

Alaska Senator Lisa Murkowski says reducing the high cost of energy is the best way to promote economic growth in the state.

But she says the new focus on spending cuts in Washington, D.C. will mean less federal money to help build Alaska’s energy infrastructure.

“Federal support for R & D will continue,” Murkowski says. “But funding to actually help build out the facilities – like the government did when APA built the Snettisham and built the Eklutna hydroelectric projects – not going to come as easily as it has in the past.”

Murkowski was speaking this morning (Tuesday) at the Alaska Rural Energy Conference in Juneau.

She suggested the State of Alaska, which currently enjoys a budget surplus thanks to oil tax revenues, could make up for some of the decline in federal spending. She also urged private industry to invest in Alaska energy projects.

“The private sector is working on a lot of new technologies that will need to be demonstrated on a smaller scale before expanding into larger markets. So we can be viewed as an opportunity for them,” says Murkowski. “I’ve always said, let us be the pilot projects up here in Alaska. If we can make it pencil out here where our energy costs are higher than anywhere in the country, think about what that demonstrates for the success of the project.”

The seventh annual Rural Energy Conference is going on through Thursday at Juneau’s Centennial Hall.

The number of senior citizens in Alaska is increasing at a rate of more than four times the national average.

The oldest Alaskans reside in the Panhandle, according to the 2011 Juneau and Southeast Economic Indicators.

The annual one-stop guide to Juneau’s economy for the previous year is published by the Juneau Economic Development Council. It shows senior citizens – defined as age 65 and over — were 8 percent of Juneau’s population in 2010.

JEDC Program Officer Meilani Schijvens says that’s nearly double from ten years ago.

“An increase of about 1400 residents in their 60s. By the year 2024, one in five Juneau residents, or 18 percent of the town’s population, will be senior citizens, compared to one in 20 in 1990” Schijvens says.

Baby boomers are choosing to stay in Alaska after retirement. With sales and property tax exemptions still in place in the capital city, it’s seen as one of the best places to retire.

“U.S. News and World Report has ranked us one of the communities to retire in, in terms of tax breaks and also in terms of having access to an active lifestyle,” Schijvens says.

One-quarter of Juneau employees work for the state of Alaska. Most of those recently retired or approaching retirement age have been in the state system long enough to be part of the defined benefit plan, which provides medical insurance into retirement as well as a set monthly pension check. For many, that makes it affordable to continue living in Juneau.

JEDC Executive Director Brian Holst says Juneau also offers an expanding health care industry.

“We have a disproportionately good health care system for the size of our community, in part because this is a hub for the region, but also because we have a lot of ensured workers in Juneau, which allows us to have a robust health care,” Holst says. But as the Juneau and Southeast region age, more senior support services will be needed, he says.

Schijvens says another group of Juneau’s population is expanding: the “20-somethings.”

“Between 2000 and 2010 the number of people in Juneau age 20 to 29 grew by 17 percent, so that’s 629 (additional) people.”

In the year 2000, the annual Economic Indicators report showed a lack of people in their 20s in Juneau. Schijvens says the age group was the only category under 50 to grow over the last ten years.

The 35 to 39 age group has declined 27 percent in the last decade.

“We have in Juneau a large baby boomer population. Those baby boomers had kids and that population shift is now moving into their 20s and there are not as many people in their 30s,” Schijvens says. “So it’s simply a matter of following the local demographics.”

Juneau’s median age increased from 35 in the year 2000 to 38 last year. Statewide, the median age is younger, while it’s slightly older in the Southeast region. It’s notably older in Haines and Wrangell, where the median age is 46. Nationally, the median age is 37.

A link to the Juneau and Southeast Economic Indicators 2011 can be found at www.jedc.org.

The Tlingit and Haida Central Council hopes to get federal funds to plan Southeast Alaska’s future.

The council is applying for a 1.4 million dollar grant from the U.S. Department of Housing and Urban Development to form a regional consortium aimed at developing a 20-year plan for the region. Details will come if the grant is approved, but Tlingit and Haida Business and Economic Development Manager Carrie Sykes says the plan could address a number of regional issues.

“There are needs for housing, there are needs for transportation, and of course we know that affordable energy is a definite need in our region,” says Sykes. “But basically the way this HUD funding works is they want you to get buy in from the community and have a lot of input at the grassroots level.”

Sykes says Southeast Conference and the Juneau Economic Development Council have offered to partner with Tlingit and Haida on the plan.

The Juneau Assembly last night (Monday) adopted a resolution of support for the grant application, and agreed to take part in the regional consortium. Sykes says other communities as well as tribes, businesses and nonprofits will also be asked to participate.

“I’ve been trying to pull in as many partners as we can find who have different types of interests in the region,” Sykes says.

HUD invited the Central Council to submit a full grant application earlier this month, after reviewing a pre-application in August.

If the agency approves a grant to the council, Sykes says it will take three years for the plan to be developed.