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Seeking Champions for Alaska's Economic Future

2014 Alaska Business Report Card Grade Descriptions

Governor: B (preliminary grade)
Governor Parnell had substantial success in the 28th Alaska Legislature on issues of business and economic development. His grade of B+ reflects that success, as well as an area of shortfall. His grade is preliminary and subject to change. Should he use his veto pen before July 1st to impose measurably stronger fiscal discipline, his grade will improve. Nonetheless, a solid B+ should be viewed as a very good grade, especially given the broad range of economic challenges facing the state. Among Governor’s numerous highlights were:

  1. Success at long last in enacting oil tax reform. His persistence and steady support on this issue paid off with a bill, SB21, that makes Alaska a significantly friendlier place for new oilfield investment and new production. Also, the Governor’s team were better prepared and better organized on this issue than in past years.
  2. Enactment of cruise ship wastewater discharge legislation (HB80). Governor Parnell has provided consistent leadership on this issue since assuming office. The new law sets achievable yet high water quality standards.
  3. Enactment of legislation that promises to make energy more affordable throughout the Railbelt, especially in Interior Alaska (HB4).
  4. Enactment of legislation allowing the State to take an ownership interest in a natural gas pipeline project from the North Slope to tidewater (SB138).
  5. Numerous smaller pro-business bills that passed the Legislature with the Governor’s support in the 2013 and 2014 sessions.
  6. Solid efforts to challenge the federal government’s aggressive, anti-development overreach in Alaska. Governor Parnell’s Department of Law has filed appropriate challenges, in appropriate venues. It is important to use all means possible to inhibit federal overreach, and the success in restoring the roadless rule exemption on the Tongass demonstrates these efforts are important and worthwhile.

On the other side of the coin, the Governor Parnell has been far less successful in trimming the size of state government and reducing its unsustainable unrestricted general fund spending. The positive trend in reversing the growth of spending is acknowledged, as is the difficulty of reducing spending, however the State’s fiscal cliff looms large. Alaska needs more leadership from the Governor on this very important strategic issue. We hope he will step up to that need with some significant vetoes in the FY2015 operating and capital budgets, together with a clear message explaining the need for them. Last year, the Governor allowed a bloated FY 2014 budget to go into effect with no vetoes.

Overall, Governor Parnell continues to exhibit solid policy instincts on issues of critical importance to the Alaska economy.

Senate Majority: B+
This grade represents a heartening improvement over the past several Senate majority organizations. Much like Governor Parnell (see above), the Senate Majority performed well on oil tax reform (SB21), authorization of state ownership in a natural gas pipeline project (SB138), cruise ship wastewater discharge legislation (HB80), and a large number of other pro-business bills.

However, as with the House Majority and the Governor, the Senate Majority allowed unsustainable unrestricted general fund spending. The positive trend in reversing the growth of spending is acknowledged, as is the difficulty of reducing spending, however the State’s fiscal cliff looms large. As a result, the grades of the members of the Senate leadership team (President, Majority Leader, and the co-chairs of Finance and Rules chair) were downgraded.

The Senate also let a few important pro-business bills die in committee. DNR permitting efficiencies (HB77) died in the Senate Resources Committee after passing the House. It is unclear why an important insurance bill (SB55) for responsible consumers and the insurance industry never made it to the floor for a vote.

Overall the Senate Majority delivered a refreshingly solid performance. Following several years of internal gridlock and virtually no accomplishments of note on important economic issues this organization was one of the most productive and constructive in many, many years.

House Majority: A-
Like the Senate Majority, the House Majority performed quite well overall. The organization is populated with a solid core of dependable, pro-business legislators.

As a result, the House Majority was able to pass a large number of important bills. These included cruise ship wastewater discharge standards (HB80), authorization of energy projects for the Railbelt (HB4), authorization for the state to take an ownership interest in a natural gas pipeline project (SB138), oil tax reform (SB21), accountability for groups filing project-stopping lawsuits (HB47), and DNR permitting reform (HB77). Another 30+ bills and resolutions of importance to business and economic health passed the House.

The only blemish on 28th Legislature’s House Majority was unsustainable unrestricted general fund spending. The positive trend in reversing the growth of spending is acknowledged, as is the difficulty of reducing spending, however the State’s fiscal cliff looms large. As a result, the House Majority leadership’s grades (Speaker, Majority Leader, co-chairs of Finance and Rules chair) were downgraded.

Overall, on most of the important business and economic issues, the House Majority organization put up yet another outstanding performance, as it has each of the past several years.

Senate and House Minorities: F
With most moderate Alaska legislators having joined the majorities in their respective bodies, only the most persistently anti-business and anti-development lawmakers populated the House and Senate minority organizations.

This can be found in the minority voting records on virtually every important business and economic issue before the two bodies. The minority organizations ignored the findings of the wastewater discharge science panel and chose instead to demagogue on the issue, pandering to special interest environmental organizations. They were and remain virulently opposed to making Alaska friendlier for new oilfield investment and production. A solid core of the minority members even voted against SB138, a bill allowing the state to work with the private sector to advance and invest in a natural gas pipeline project.

Minority members do cast pro-business votes from time to time. For example, many minority members supported accountability for groups filing project-stopping lawsuits (HB47), and supported authorizing AIDEA to finance mining projects in Southeast (SB99). Aside from these bright spots, in general the House and Senate minority organizations reliably come down on the side of a difficult tax and regulatory climate for the private sector.

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