What do continued low oil prices means for the state budget? It’s not pretty.

The Department of Revenue released a forecast today showing the state will bring in 800 million dollars less in oil revenue this year and next than the department projected in the fall.

Download Audio

Governor Bill Walker says the 17 percent drop in the oil revenue forecast reinforces the importance of his fiscal plan. The plan would draw money from Permanent Fund earnings to pay for state government. It also would introduce an income tax and raise other taxes, while cutting state spending.

“It just underscores that the reason to make the shifts we have, the plan we’ve submitted  — the New Sustainable Alaska Plan, with the Permanent Fund Protection Act – shifts away from, it moves from the dependency on oil from 90 percent down to 21 percent,” said Walker. “And also underscores the urgency of doing it yet this year.”

Walker adds that putting a fiscal plan in place this year would reduce the uncertainty that surrounds the state’s future – as well as its ability to attract investors.

The governor says he’ll call a special session if the Legislature doesn’t pass any revenue measures this session.

Revenue Commissioner Randall Hoffbeck says the lowered forecast doesn’t call into question the basic elements of Walker’s fiscal plan.

“The Permanent Fund Protection Act actually models a range of oil prices through a 25-year period,” Hoffbeck said. “It assumes years of low oil price and years of high oil price. We had the staff go back to look to make sure this oil price environment was within the parameters of the assumptions. It was. And so this would not affect the draw under the Permanent Fund Protection Act.”

Soldotna Republican Senator Peter Micciche acknowledges that the lower forecast will focus legislators’ attention on bills that would raise revenue.

“We have to have those other discussions about revenue. We’ve cut deeply. I mean, over two years, we’ve cut about 17 percent in agency operations. This year alone we cut about 335 million. Um, we’ve cut. We’ve promised Alaskans we were going to do that first. Now we have to have those other conversations.”

So how did the state get the revenue forecast so wrong?

Oil and gas industry expert Larry Persily doesn’t blame the Department of Revenue.

“It’s no one’s fault. It’s not like Alaska got it wrong last fall, with the Revenue Department forecast. Prices dropped further than most analysts expected and stayed lower longer than most analysts expected. Though they have come up a little bit of late.”

Persily says the governor is right to focus on moving state revenue away from volatile oil prices. But he says the state has a larger task as it tries to balance the budget.

“We have to accept we’re not the oil and gas state that we once thought we were, and we’re never going to be the oil and gas state that we once were. Because this isn’t just prices. This is production. We’re down three-quarters from the peak. And no one out there claims to have another Prudhoe Bay in their back pocket. So, it is going to be an adjustment for Alaska.”

Since both legislative houses passed their budgets in the past two weeks, they’ve started to focus on revenue-generating measures. For example, the House Resources Committee introduced its version of oil and gas tax credits over the weekend.

Cuts to Joint Base Elmendorf Richardson’s 4-2-5 infantry brigade combat team in Anchorage have officially been put on hold. Alaska’s congressional delegation is celebrating today’s announcement by the army.

Download Audio

In a combined release, Senator Dan Sullivan said in part “the Army sent a strong message that America remains dedicated to our Re-balance to the Asia-Pacific, and understands our leading role in the Arctic.”

Senator Lisa Murkowski said the reduction plan was shortsighted “and the direction of world events would ultimately prove that.”

Both Senators say they will work to make the hold permanent.

In July, the Army announced plans to reduce the 4-2-5 by 2600 soldiers.

The House Resources Committee unveiled its version of an overhaul of the state’s oil and gas tax credits.

The new version removes one of the key changes proposed by Governor Bill Walker – raising the minimum tax paid by companies from 4 percent to 5 percent.

Download Audio

The bill would trim the amount of tax credits paid to companies operating in the Cook Inlet.

But Homer Republican Representative Paul Seaton says the new version would leave credits for companies operating on the North Slope unscathed.

“You know, it’s a huge budgetary expense and we’re talking about how we need to do budget cuts in here. I see almost no budget cuts.”

But Rena Delbridge, an aide to Anchorage Republican Representative Mike Hawker, says the sponsors of the new version were concerned about cutting credits deeper. Delbridge worked on the changes.

“The potential impacts to industry of immediate and dramatic changes, in order to resolve a short-term – hopefully short-term or intermediate-term – budget problem, could have fairly significant effects to our production in three years and in five years and in 10 years. “

Walker had proposed eliminating credits based on how much companies spend on drilling and exploration. But he would have allowed companies to continue to get tax credits based on their operating losses.

The new version would scale back both types of credits – for spending and for losses — but wouldn’t eliminate either type.

Walker’s state budget proposal included 500 million dollars from the tax changes. Until a fiscal analysis is complete, it’s not clear how much less the state budget would receive from the committee’s changes.

Ken Alper, state Tax Division director, says the changes will affect the state’s ability to balance its budget. He noted that eight other bills designed to raise revenue haven’t passed.

Walker’s expected to announce today that state revenue hasn’t been meeting forecasts, further deepening the budget problem.

The bill also would establish a legislative working group that would make recommendations on broader changes to the tax system for companies in the Cook Inlet and the area south of the North Slope known as “Middle Earth.”

These recommendations would be due in time for next legislative session.

Stories are posted on the APRN news page. You can subscribe to APRN’s newsfeeds via email, podcast and RSS. Follow us on Facebook at alaskapublic.org and on Twitter @aprn

Download Audio

JBER cuts put on hold

Lori Townsend, APRN – Anchorage

Cuts to Joint Base Elmendorf Richardson’s 4-2-5 infantry brigade combat team in Anchorage have officially been put on hold. Alaska’s congressional delegation is celebrating today’s announcement by the army.

Low oil prices not ideal for state budget

Andrew Kitchenman, KTOO – Juneau

The Department of Revenue released a forecast today showing the state will bring in 800 million dollars less in oil revenue this year and next than the department projected in the fall.

Tax credits reduced for oil and gas companies

Andrew Kitchenman, KTOO – Juneau

The House Resources Committee unveiled its version of an overhaul of the state’s oil and gas tax credits.

Irreversibility of climate change discussed at Arctic Science Summit

Matt Miller, KTOO – Juenau

Government leaders and policymakers from circumpolar nations say they rely on the very best and latest science to make decisions about how to adapt to climate change and a rapidly warming Arctic. They converged in Fairbanks last week at the same time as one of the largest groups of Arctic scientists met to brainstorm on the next round of new research.

New mariculture initiative to help boost shellfish farming

Ed Schoenfeld, CoastAlaska – Juneau

Alaska shellfish farmers hope a new state mariculture initiative will help boost their businesses. But they warn it’s not an easy industry to expand.

Zita Air adds passenger service to Bristol Bay communities

Molly Dischner, KDLG – Dillingham

Last week, Anchorage-based Zita Air made its first charter run with a Piper Cherokee Lance, delivering folks to Kokhanok for the winter carnival. The flight was months, and even years, molly dismollymn the making.

Emmonak fire destroys five buildings

Emily Russell, KNOM – Nome

A fire in the village of Emmonak destroyed five commercial buildings and caused an estimated $3 million in damages over the weekend.\

Some of the fastest teams ever among top ten Iditarod finishers

Emily Schwing, KNOM – Nome

Never in Iditarod history have as many teams finished the 1000 mile race in under nine days, but this year, eight of the top ten teams did just that. Some of the mushers who crossed the finish line faced enormous adversity on their way to Nome. But without any major weather events most of the mushing that took place was simply the fastest in the race’s history.

Never in Iditarod history have as many teams finished the 1000 mile race in under nine days, but this year, eight of the top ten teams did just that. Some of the mushers who crossed the finish line faced enormous adversity on their way to Nome. But without any major weather events most of the mushing that took place was simply the fastest in the race’s history.

Download Audio

Download Audio

In a decision released this morning [Tuesday], the U.S. Supreme Court issued a partial victory to Alaska moose hunter John Sturgeon in his case against the
National Park Service. The high court voted 8-0 to reject a 9th Circuit Court of Appeals decision against Sturgeon.

The case stems from a 2007 incident, when rangers in the Yukon-Charley
Rivers National Preserve told Sturgeon he couldn’t operate his hovercraft
there.

The Supreme Court decision, written by Chief Justice John Roberts, says the
Ninth Circuit’s interpretation of a section of the Alaska National
Interests Lands Conservation Act is inconsistent with both the text and context of ANILCA. The section, 103-C, concerns which federal laws apply on non-federal inholdings within park boundaries.

The court heard arguments in the case in January.

The Army’s decision this week not to proceed with a planned troop cut at Joint Base Elmendorf Richardson is unusual. For at least the next year, Anchorage won’t have to face the economic hit it’s been expecting since the Army announced it would be part of a 40,000-soldier troop reduction last year. But there’s no relief for communities in the Lower 48 who were told they’d lose troops in the same decision.

Download Audio

Michael O’Hanlon is a national security expert at the Brookings Institution and a former defense analyst at the Congressional Budget Office.

”To actually overturn a decision like this is fairly remarkable,” O’Hanlon said. “This is a pretty good job by the Alaska delegation, I have to say. I mean, I think they had a good argument on their side.”

O’Hanlon says the cut of 2,600 JBER troops , dismantling the 425 airborne brigade, never made much sense, in light of the Obama Administration’s plan to focus more on the Asia Pacific.

“I think it’s probably true that a lot of people had some input in this,” said O’Hanlon. “Not least, the senators from Alaska. But I think once the debate began, logic was on their side. And they did a good job of pointing out this apparent disconnect between the Asia-Pacific rebalance priority of the Obama administration with the proposed cut in the brigade in Alaska.”

Sen. Dan Sullivan used his position on the Senate Armed Services Committee to repeatedly raise that argument. Sen. Lisa Murkowski is also in an influential position with a seat on the defense subcommittee of the Appropriations panel. The senators often discussed the cuts in the context of Russia’s Arctic build-up. O’Hanlon says he thinks those arguments were less persuasive than the 425’s ability to respond on the Korean Peninsula and elsewhere in Asia.

While commercial fishermen were on the water anxiously awaiting the next herring opening in Sitka, some residents gathered on land for a traditional Tlingit ceremony. The Blessing of Herring Rock happens every year to get the fish to come back to the Sound to spawn.

Download Audio

For centuries, the Kiks.adi clan has honored the beginning of herring season in the spring by blessing Herring Rock, which originally stood on the waterfront of the Indian Village. It was at this rock where herring traditionally began their spawn. Nels Lawson is a Tlingit elder.

“This time of year was very significant to our people because with the arrival of the herring on our shores, meant the arrival of new food, new food for our homes,” Lawson said.

In that respect, little has changed. The small group of residents and tribal citizens are waiting for the fish to spawn to collect their tasty eggs.

But spawning patterns have changed and the large Herring Rock has been relocated on shore. It now sits outside the Sheet’ka Kwan Nakahidi.

Rachel Moreno, Sitka Tribe of Alaska Tribal Council member, says poor returns in recent years and fewer spawning areas make the blessing especially meaningful.

“We bless it so we won’t have such a hard time getting them to come back,” said Moreno. “This is one of the last places herring spawn so it’s a very important anchor for that species and for our traditions for our people to enjoy the harvest of the herring eggs.”

She says likes to enjoy her roe with seal oil and soy sauce, something she’s looking forward to after the herring spawn and the subsistence roe-on-hemlock harvest.

Roby Littlefield did the honors of the blessing this year. She poured salt water from the channel over the rock in memory of her husband John Littlefield, a subsistence activist. She says she’s fueling up her boat in preparation for the harvest.

“It’s not time to put branches in the water yet,” Littlefield said. “But it’s time to start looking because you never know for sure where they’re going to spawn especially with commercial harvesters pounding on them they’re running away and sometimes they scatter for a week at a time.”

Competition over the herring resource has created tension between the commercial and subsistence interests. Littlefield, along with other traditional harvesters, feels that commercial fishing has a greater impact on herring than the Alaska Department of Fish & Game’s data suggests. She’s concerned about the future of the ecosystem.

“They’re at the base of the pyramid,” said Littlefield. “Everything depends on herring and so when you cut off the bottom of the pyramid you’ve got a problem.”

Patty Dick teaches sixth-grade science at Blatchley Middle School. She sees the blessing of the Herring Rock as an important tradition, one she always teaches her students about.

“There are a lot of changes that are occurring right now in our ocean,” Dick said. and we are in the process of living through these changes and so every year that these herring return is really special.”

And that’s a blessing in itself.

A proposal to allow state government to dip into Permanent Fund earnings is advancing in the Legislature.

Download Audio

The Senate Finance Committee heard details Tuesday from Anchorage Republican Senator Lesil McGuire.

Similar to a plan from Governor Bill Walker, McGuire’s bill would pay for much of state government using fund earnings.

“In my opinion, we have to continue strategic cuts to the budget, but we can’t cut our way out of it. And that’s why you need a fundamental restructure to the Permanent Fund.”

McGuire’s bill has been revised over the past month. One amendment would change the basis for Alaskans’ annual dividend payments. They’re currently based on fund earnings. McGuire wanted to base them on oil and gas royalties. Under the amendment, dividends would be based on a combination of fund earnings, royalties, and the Constitutional Budget Reserve.

And another amendment would prevent a cut to dividends this year. In future years, dividends would be as low as one thousand dollars.

McGuire says Alaskans don’t want to see dividend cuts, but they’ve gone through the first two stages of grief over the budget: denial and anger.

“What we’re hearing, again, is people in that stages of grief model, are in the bargaining phase. In my opinion, most Alaskans are there. They understand that both because the private sector is interrelated to the health of the public sector. They also understand that without basic government services, they wouldn’t really want to live in Alaska, so why would other young people come here and want to grow it?”

A key difference with Walker’s plan is that McGuire’s would bring in less money to the state. McGuire estimates that the state would draw roughly 2 billion dollars annually from the Permanent Fund earnings.

Walker would draw 3.3 billion dollars annually. Unlike McGuire’s bill, Walker would draw money from oil production taxes and the state’s Constitutional Budget Reserve into the Permanent Fund Earnings Reserve Account.

Neither plan would entire close the state’s budget gap this year.

The Senate Finance Committee will hear public testimony on Walker’s and McGuire’s Permanent Fund bills Wednesday and Thursday.

State and federal officials are meeting in Anchorage this week on a study plan for the proposed Susitna Dam. Emily Ford, a spokesperson for the Alaska Energy Authority, says the Federal Energy Regulatory Commission, FERC must approve every aspect of the study plan before further action can be taken.

Download Audio

Ford says the study plan is based on information gathered in 2013 and 2014. The Susitna Dam project was put on hold shortly after Governor Walker was elected, but last summer the hold was lifted. Ford says the information was filed with FERC a year and a half ago, and now FERC will review it. The federal agency must give the go ahead for the study program as part of the pre-licensing process for the dam.

But some groups opposed to the dam plan say the study process is flawed. Sam Snyder, with Trout Unlimited, says the state has spent over 193 million dollars on studies for the dam, at a time when the state’s budget crisis is unresolved.

The outcome of the meetings will determine if AEA can proceed with the pre-license proceedings necessary for moving ahead on the project.

Extreme skiers and snowboarders sped down Haines mountains Monday in the fourth stop of the Freeride World Tour. The international alpine sports tournament made the long trek back to Haines after its Alaska debut last year. It hasn’t been totally smooth sailing – Haines poses challenges athletically and logistically.

Download Audio

“Hello and welcome to the fourth stop of the Freeride World Tour,” commentator Ed Leigh introduced the competition.

“Back in Haines, Alaska. Dream coming true for all of us,” said co-commentator Martin Winkler.

On Monday morning, athletes in bright pink and yellow snow gear got ready to tackle a steep, mountain face near Little Jarvis Glacier. Videographers circled in helicopters. But fans were left in the dark. The Freeride’s livestream, which broadcasts the competition around the world, wasn’t working because of a satellite problem.

“It’s painful to have this happen,” said Freeride spokesman Tom Winter. “But it’s a learning process, working in an environment like Haines.”

Despite the livestream troubles, organizers decided to go ahead with the competition.

Men’s snowboarders were the first to start. Frenchman Armond was followed by American and first-time Freeride competitor Jonathan Penfield.

“I crashed at the top of my of run,” Penfield said after the competition. “But I had a really enjoyable ride the rest of the way down.”

Penfield says Alaska presents unique challenges for the riders. It’s all backcountry here, there are no ski resorts with lifts to help athletes practice. That requires a helicopter.

“Normally you’re able to warm up riding a few days before, but for me today was the first time I snowboarded in a week,” he said.

Penfield was up against Austrian Flo Orley, who is in his 16^th and last year competing.

“I did a pretty fast top part, at the lower base I took a little bit too much speed and flew 25 meters plus…and landed it,” Orley said.

He took the bronze medal for his run in Haines. Orley was happy with that, but disappointed his friends and fans in Europe were left without a livestream. He says the livestream is more than just a play-by-play video. It’s helped people understand and take the sport more seriously.

“I became a pro in 2000 and then we were considered crazy idiots, extreme people who would throw ourselves off cliffs hoping to survive,” Orley said. “And the funny thing is, now 16 years later I do exactly the same thing, but we’re regarded as proper sportsmen. So the whole society, there was a big change. And the livestream has helped to make this change obvious to everyone.”

An Alaskan guest athlete, also known as a wild card, took the gold in the men’s snowboarding. Ryland Bell showed his familiarity with Haines terrain by racking up a score of 95 out of 100. But since he won’t be competing in the finals in Verbier, American Sammy Luebke is going into that event with the top spot.

Rookie Logan Pehota of Canada took the top score in the men’s ski category. He was joined by French Loic Collomb-Patton and American Drew Tabke in the top three.

As for the female snowboarders, Swiss Anne-Flore Marxer made what commentator Leigh said was the most impressive line he’s seen in a long time from snowboard women.

“And she’s going big! That was a winning line,” exclaimed Leigh.

Marxer took first place in her category. Her friend, Austrian Eva Walkner, took the gold in women’s skiing. Marxer told KHNS before the competition that she doesn’t strategize her runs, she just goes out and has fun.

“Me, I’m just so glad to be here,” Marxer said. “I want to make sure to have a good time so that at the end of my one day of competing, I’ll remember the amazing, exciting, speed and make the most out of it for my own memories.”

Italian skier Arianna Tricomi created her first Alaska skiing memories this week. The rookie skier put up a fight against the more experienced Walkner. She earned third place in her category.

“The way the mountains are, it’s different,” Tricomi said. “They’re big, they’re powerful. And just being in this place, it’s far away, in the middle of nature. It’s been a powerful competition.”

Tricomi says the power and beauty that comes from the remote mountains is enough to make the challenges they present worth it. Apparently, Freeride organizers agree. Haines Tourism Director Leslie Ross says it’s likely that they’ll come back next year.

The athletes who scored the best here will go on to compete in the finals in Verbier, Switzerland, April 2.

The Haines tourism department is hoping to set up a viewing of the Freeride competition this week at the library and a local bar.

Opponents of the Knik Arm Bridge project are claiming a victory. Federal transportation officials have turned down the state’s request for a loan for the seventh time.

Download Audio

A February letter from the US Department of Transportation explains the federal government is putting on hold its consideration of the state’s current bridge plan.

The letter also indicates that the state needs to reduce it’s estimates of traffic and revenue concerning the bridge.

Jeremy Woodrow, a state department of transportation spokesperson, says the denial of the loan does not kill the bridge project. He says DOT is in the negotiating process for a loan from federal transportation officials

“And what you expect with any negotiation there is a lot of back and forth between the two parties before we can reach an agreement. So the letter we received was them saying that they aren’t ready to process the loan and that they need more information from Alaska before we can keep moving along this process. It was expected, it did not come as a shock to the department, it was expected as a part of that negotiation process.”

The state is seeking a $375 million TIFIA [Transportation Infrastructure Finance and Innovation Act] loan to finance construction of the bridge. But the letter to Alaska DOT indicates the state’s proposal poses too many risks. The state is prohibited from issuing bonds to pay for construction of the bridge without the federal loan, according to state legislation passed in 2014. Last year, Governor Walker approved continuing with the bridge project under a restructured financing plan.

Jaime Kenworthy, author of the blog Knik Bridge Facts, opposes the bridge. He says the state has spent upwards of two million dollars on consultants to revise estimates of toll revenues that would pay for the first phase of bridge construction. Kenworthy says the traffic estimates are exaggerated to show a traffic projection that ensures enough tolls to pay for the project

‘”Let me tell you how exaggerated and aggressive they are. The state demographer thinks there will be 162 thousand people living in the Mat Su in 2042. The KABATA number is sixty percent more growth than everybody else. Sixty percent.”

Kenworthy says that both houses of the legislature have passed their operating budgets for the next year, budgeting $1.6 million dollars for the bridge. Those budgets sit in conference committee. Kenworthy says there is $168 million dollars in federal funds now available for the bridge project, but the state does not have the matching funds necessary to use it.

“The whole structure of House Bill 23 which was the last KABATA bill was, you need to get the TIFIA loan to trigger the state financial commitment. There is no reason why legislators can’t recommit that money in the capital budget in the operating budget this year, and put more money on the street this summer.”

Kenworthy also says the letter from federal transportation officials indicates that the state has not made it to the negotiation stage regarding a TIFIA loan.

That’s not true,  according to Judy Dougherty, DOT’s director for the Knik bridge project. Dougherty says the TIFIA loan is only dependent on projected tolls from the bridge, and that  DOT will respond to federal highway officials with new information.

“We’re preparing our response for TIFIA that will show them the break-even case, that would be how low the tolls and revenues can be in order to still cover the TIFIA loan. And we are finding that it can be even lower than our extreme downside case as much as 30 percent lower than our extreme downside.”

Dougherty says that data has just been completed and will be sent to federal authorities at month’s end.

Alyeska Pipeline Service Co., which operates the Trans-Alaska Pipeline, is splitting with its longtime provider of oil spill prevention and response services in Prince William Sound.

Crowley Marine Services announced last week that its bid to continue the work has not been accepted. And in a region where the memory of the 1989 Exxon Valdez oil spill remains fresh, that decision is raising concerns.

Download Audio

Right now, Crowley provides the escort tugboats that accompany oil tankers out of Prince William Sound; it also manages the oil spill response barges that would be first on the scene were there ever an accident. The company has held at least part of that contract for more than 25 years and has provided all the ship escort and response vessel services for the last decade.

“It’s a key oil spill prevention and response measure for Prince William Sound,” said Donna Schantz, who heads up the Prince William Sound Regional Citizens’ Advisory Council, a watchdog group set up by Congress after the Exxon Valdez oil spill. What’s at stake is more than just a contract, she said. “It’s a very, very important role.”

But Crowley’s contract is up for renewal — and last week, they announced their bid has been rejected. It’s not yet clear who might take their place. The bidding process isn’t complete.

Schantz said she and many others in Valdez were taken by surprise. The current system, she said, is working pretty well.

“The fact that we haven’t had a major oil tanker incident is a pretty good indicator,” she said. “I think Crowley’s done a really good job.”

Crowley has made it clear the break-up isn’t its choice. Representatives wouldn’t speak by phone, citing the sensitivity of the issue. But in a press release, CEO Tom Crowley said his company “bid this contract very aggressively and [is] extremely disappointed.”

Crowley also couldn’t offer any details as to why their bid was rejected. Alyeska spokesperson Kate Dugan said she can’t comment while the bidding process is still underway.

“It’s a competitive landscape, and that’s all I can really say about that,” Dugan said. “The details of the contract, not just the contract itself, but the whole process of how and why we make decisions like this, is to protect the privacy of the bidders and to get the most competitive deal we can get.”

Alyeska operates the Trans-Alaska Pipeline and its Valdez terminal, and is controlled by the pipeline owners, primarily ExxonMobil, BP and ConocoPhillips.

Dugan said Alyeska is committed to protecting Prince William Sound, which is why it started the bidding process well before the current contract expires in 2018.

“We were deliberate in that so that we could make sure that any transition, if there was going to be a transition, would be thoughtful and honor the commitment we have to Prince William Sound,” she said.

Dugan couldn’t confirm what company – or companies – are still in the running. But Louisiana-based Edison Chouest Offshore told the Alaska Dispatch News that they are competing for the contract.

Edison Chouest has operations worldwide, but they are perhaps best known in Alaska for the Aviq tugboat, which was pulling Shell’s arctic drill rig, the Kulluk, across the Gulf of Alaska in 2012 when the rig broke loose and grounded off Kodiak.

Meanwhile, Crowley employs about 250 people in Valdez. In its statement, the company said it would “look for opportunities to redeploy” employees. But Alan Cote, national president of the Inlandboatmen’s Union of the Pacific, which represents about 150 deckhands, engineers and cooks working for Crowley, said it would be hard for any company to absorb that many people.

His members are worried, he said, “especially now, with the reduction in oil exploration and production in Alaska. It’s really a catch-22 for these workers, the union and the company.”

Schantz, of the Citizens’ Council, said her group will work with whatever company wins the contract. But, she said, whoever it is will face a steep learning curve.

“We don’t know yet, but we are assuming we’re going to have new tugs coming in, new barges, new people,” she said. “And just pulling all those pieces together, and making sure that the prevention and response in place isn’t compromised during that transition process is going to be significant.”

Crowley will continue providing services through June 2018. Alyeska expects to announce its new contractor by early summer.

Stories are posted on the APRN news page. You can subscribe to APRN’s newsfeeds via email, podcast and RSS. Follow us on Facebook at alaskapublic.org and on Twitter @aprn

Download Audio

Supreme Court sides with Sturgeon in case challenging NPS authority

Dan Bross, KUAC – Fairbanks

In a decision released Tuesday morning, the U.S. Supreme Court sided unanimously with moose hunter John Sturgeon in his case against the National Park Service, overturning a 9th Circuit Court of Appeals decision.

Cancelled troop cut at JBER contrary to cuts in Lower 48

Liz Ruskin, APRN – Anchorage

The Army’s decision this week not to proceed with a planned troop cut at Joint Base Elmendorf Richardson is unusual. For at least the next year, Anchorage won’t have to face the economic hit it’s been expecting since the Army announced it would be part of a 40,000-soldier troop reduction last year. But there’s no relief for communities in the Lower 48 who were told they’d lose troops in the same decision.

Plan to replace tanker escort in Prince William Sound raises concerns in Valdez

Rachel Waldholz, APRN -Anchorage

Alyeska Pipeline Service Company, which runs the Trans-Alaska Pipeline, is splitting with its longtime provider of oil spill prevention and response services in Prince William Sound.

Legislature proposes dipping into PFD

Andrew Kitchenman, KTOO – Juneau

A proposal to allow state government to dip into Permanent Fund earnings is advancing in the Legislature. The Senate Finance Committee heard details Tuesday from Anchorage Republican Senator Lesil McGuire.

Knik Crossing loan denied

Ellen Lockyer, KSKA – Anchorage

Opponents of the Knik Arm Crossing plan say denial of a loan for the project will kill the bridge, but promoters of the project say it’s just a bump in the road.

Officials meet in Anchorage to discuss Susitna Dam

Ellen Lockyer, KSKA – Anchorage

State and federal officials are meeting in Anchorage this week on a study plan for the proposed Susitna Dam. Emily Ford, a spokesperson for the Alaska Energy Authority, says the Federal Energy Regulatory Commission, FERC must approve every aspect of the study plan before further action can be taken.

Haines Freeride 2016: ‘It’s been a powerful competition’

Emily Files, KHNS – Haines

Extreme skiers and snowboarders sped down Haines mountains Monday in the fourth stop of the Freeride World Tour. The international alpine sports tournament made the long trek back to Haines after its Alaska debut last year. It hasn’t been totally smooth sailing – Haines poses challenges athletically and logistically.

Blessing of Herring Rock: A yearly ceremony to bring fish to Sitka

Brielle Schaeffer, KCAW – Sitka

While commercial fishermen were on the water anxiously awaiting the next herring opening in Sitka, some residents gathered on land for a traditional Tlingit ceremony. The Blessing of Herring Rock happens every year to get the fish to come back to the Sound to spawn.

A budget to fund the Anchorage School District passed Tuesday, but not without serious criticisms raised by liberals and conservatives alike.

The preliminary budget passed by the Anchorage Assembly totals $768,401,726, a decline of $4,935,000 from what was approved last year.

Funding at that level means a reduction of 49 positions from the district, which Superintendent Ed Graff told the Assembly could happen through attrition rather than layoffs. Unlike earlier years though, losses will be felt in classrooms rather than among support staff.

During public testimony, Mike Bronson with the Anchorage branch of the NAACP asked for the budget to be reexamined, saying spending has outpaced achievement among district students.

Four conservative members of the 11-person body voted against the budget for similar reasons. South Anchorage Assembly Member Bill Evans said during comments that he believes the current spending was going toward “institutionalized mediocrity.”

ASD maintains that in recent years it has improved student achievement in several critical areas like graduation rates and attendance.

A bill to revise oil and gas tax credits from the House Resources Committee includes only a fraction of the savings Governor Bill Walker proposed.

Download Audio

The Department of Revenue estimates the bill would save the state roughly 160 million dollars over the next three years. That compares with more than a billion dollars in savings under Walker’s proposal.

The committee rejected a series of amendments Tuesday that would have raised costs for oil and gas companies.

For example, Homer Republican Representative Paul Seaton proposed cutting the share of losses that North Shore producers can receive. The Net Operating Loss tax credits would have fallen from 35 to 25 percent.

Anchorage Democratic Representative Andy Josephson supported the amendment, which was defeated three to six.

“The credit system we’ve devised is not sustainable in this economic climate and this would be a way to rein it in,” said Josephson.

But Rena Delbridge said the credits help smaller and newer companies operate on the North Slope. She’s an aide to Anchorage Republican Representative Mike Hawker who worked on the bill.

“The Net Operating Loss credit is also, can also be thought of as a part of the fundamental tax calculation, in the sense that the state wants you to keep spending money, even if you are losing money,” Delbridge said. “Because that spend is potentially that future production.”

Walker’s plan would have prevented companies from using past losses to reduce their taxes below the minimum, like they can now. And it would have raised that minimum tax from 4 to 5 percent.

The House Resources bill drops those provisions, and also scales back Walker’s proposal to cut tax credits.

The debate over the bill is happening the same week the state forecast that it will pay out more in oil and gas tax credits next year than it will receive in royalty revenue – for the first time.

Despite the gulf between Walker’s proposal and the committee bill, Tax Division Director Ken Alper credited thAndrew Kitchenmane Resources Committee with its work over more than 20 hearings on the bill.

“It was a respectful process. It was informative,” Alper said. “They fixed a number of the technical issues that were in our original bill, and that makes things easier going forward. And even if we disagree with where they went on some of the larger dollar-value changes, we’re going to continue the conversation.”

The bill must go through more steps before it reaches Walker’s desk. Next up is the House Finance Committee.

And it will face scrutiny in the Senate Finance Committee. Last year, Soldotna Republican Senator Peter Micciche was a member of a working group that recommended the state prevent companies from paying less than the 4 percent minimum.

A Canadian company is looking into the feasibility of building a railroad to Alaska to link with the Trans-Alaska Pipeline. The rail line would ferry Canadian oil sands to markets in Asia. The company has been pursuing the project for years.

Download Audio

Matt Vickers admits he’s touted the idea of shipping oil sands from Alberta to Alaska by rail for a long time.

Vickers is CEO of G Seven Generations, Ltd., a Canadian company. He hopes to load more than a million barrels a day from Fort McMurray, Alberta onto a specially built rail line to Delta Junction. From there it would be treated to enter the trans-Alaska pipeline to Valdez.

Vickers said the $35 million project got new life when the Alberta government funded a preliminary study for almost $2 million.

“A.E. Can, our engineering firm, were able to look at allowing our rail to be a class A rail along the 2,400 km — or 1,600 mile — route,” Vickers said.

He said he’s spent much of the last six years getting buy-in from Canadian First Peoples and Alaska Natives impacted by the proposal.  If all goes according to plan, Vickers said, crude from Canadian oil sands could be moving down to Valdez by 2020.

In Sitka, a Citizen’s Task Force has been meeting for several months to come up with a strategy for keeping the community’s basic services, while adjusting the tax structure. The Task Force is ready to reveal their plan called “The Grand Bargain.”

Download Audio

With a budget gap to close and state funding growing ever more unlikely, how will Sitka make due? The Task Force says, ‘By striking a deal with its citizens.’

This is their idea: If citizens approve a ballot initiative to raise cap on property taxes by two mills, the city will eliminate the sales tax on groceries.

At their March 7 meeting, Cyndi Gibson crunched the numbers and lit by the glow of a projector, presented her findings.

“The idea is that people that have homes that are more valuable can have the resources to absorb those expenses a little bit easier than people who maybe have fixed income or maybe have bigger families and these other expenses,” Gibson said.

Her example compares two families. Let’s call them Family A and Family B. Each one has a mom, dad, and two kids and spends the same amount on groceries. Repealing the sales tax on groceries (which would apply only to food, not toiletries) would save each family $825 a year.

Now, if family A’s home is valued at $350,000, then the Grand Bargain would save them a bit of money. But what about family B? If the have a second home, Gibson said they would pay more.

“Maybe you own a second house that you rent,” she said. “I own a house that’s $350,000 and I live in a house that’s $400,000. So you will pay $675 more per year.

By Gibson’s calculations, this pattern also holds true for senior citizens and renters. Those who have more properties (or more highly valued properties) will pay more under this new paradigm.

Task Force member Dyan Bessette worried that the burden shift would negatively impact seniors, who may have second properties but are on fixed income.

Bessette: You’re assuming seniors are a lot better off financially than other people.

Gibson: No, I never meant to imply that.

Bevan: There’s two groups of seniors.

Task force members have also been divided on whether to assign these mill rates to a specific purpose. Hugh Bevan suggested dedicating the revenue from one of the mill rates towards bond payments on the expansion of the Blue Lake hydro dam.

“I’m in favor of splitting it in half and dedicating one (mill) to debt reduction in the electric fund. The other I’m ambivalent about,” Bevan told the Task Force.

Vice Chair Max Rule worried that would put Sitka in a bind. He said, “If we get in to dedicating 1 mill of property tax for debt reduction of the utility, then we’re committed out there for 35 years.”

Other task force members wondered whether dedicating the mill rate to road maintenance would be a better sell to the public. But in the end, the Task Force decided to get more public input and leave the 2 mill bump undesignated for any one fund.

And speaking of the Blue Lake dam, the Task Force is also recommending a $1.9 million subsidy from the general fund to the electric fund. This is important because mild winters and low oil prices have put Sitka out of pace with bond payments for the dam. Rates will likely increase again this year and the subsidy is meant to keep that rate hike below 5%. Last year, rates increased by 6%.

On the cuts side, the Task Force is proposing a $1.7 million cut to the General Fund and $600,000 to the school district over the course of three years. They did not propose a cut to Sitka Community Hospital, which concerned Gibson at last Monday’s (03-14-16) meeting.

“I kind of feel like if we’re expecting our school to cut back and our city to cut back, then the hospital is pretty big,” she said.

Hospital CEO Rob Allen is Chair of the Task Force, though he was not present at the March 14 meeting. Right now, the city has budgeted $157,000 for the Hospital, which goes towards capital projects and equipment. Rule felt this cost was too small to cut into.

Rule: That was my reason for leaving it as zero.

Gibson: That’s fine, but we need to be able to tell that to people.

Just that – “being able to tell that to people” – kind of captures the challenge before the Task Force now. They need to figure out how to tell the story of the decisions they’ve made and why they made them, seeking public input while also defending their choices.

Speaking to her fellow Task Force members, Gibson said, “If we think this is the solution, it’s our job to communicate effectively enough that everybody else can understand what it’s important and why they would want to do it.”

And citizen’s aren’t their only critics. The Task Force will present their recommendations to the Assembly at a work session on Tuesday, April 12 at 5 p.m.

Listen to a half-hour “Grand Bargain” special with Task Force members Rob Allen, Hugh Bevan, and Cindy Gibson to hear about their plan in further detail.

The Task Force will gather public input on the Grand Bargain at a town hall meeting at 6 p.m. tonight (03-21-16) in room 229 at the University of Alaska Southeast.

Kodiak’s Alutiiq Museum recently acquired a quiver that is a rare example of Alutiiq craftsmanship. Sven Haakanson is Curator of Native American Anthropology at the Burke Museum and recently passed the quiver – and the arrow that comes with it – along to the Alutiiq Museum. Haakanson is from Old Harbor and served as the Alutiiq Museum executive director before moving to Seattle to work at the Burke Museum and teach at the University of Washington. Haakanson said the King family from Kodiak brought the quiver and arrow to the Burke Museum, and he recognized the quiver as a rare find.

Download Audio

“Most of the quiver’s I’ve seen are circular,” said Haakanson. “This one was square, beautifully made and tied and you guys check it out here in Kodiak. But it should go home ‘cause it’s so rare, and it would be a nice addition to the kayak they’re getting from the Peabody museum, the warrior’s kayak, ‘cause those quivers were used when they were kayaking. They were originally made to hold sea otter darts, so that the sea otter darts – so they don’t get damaged on the kayak. You’d be able to pull them out, shoot the sea otter, and keep going.”]

Haakansan said the arrow would have been used for target practice. The museum may put the quiver and arrow on display this summer.

Fishermen, Alaska Native tribal members and clean water advocates are criticizing Gov. Bill Walker’s administration over its handling of fisheries and water issues.

Download Audio

Chief among their criticisms is a bill Walker proposed to give the state Legislature deciding power over which waters in the state could be classified as outstanding natural resource waters and offered special protections.

Yakutat Tlingit Tribal Council member Raymond Sensemeier says funneling applications through the Legislature could politicize the process.

The group also criticized the governor’s 2015 decision to lift a moratorium on work on a major dam project and the state’s denial of certain water rights for a group fighting to stop coal mining development near a salmon stream in south-central Alaska.

A Walker spokeswoman said Walker’s office planned to respond to the group’s concerns.