Walker names two commissioners and legislative director  

Gov. Bill Walker filled three key positions in his administration on Friday. Heidi Drygas will be the new commissioner of the Department of Labor. Darwin Peterson will be Walker’s legislative director, and Larry Hartig will stay on as commissioner for the Department of Environmental Conservation.

Born and raised in Fairbanks, Drygas went to undergrad at UAF and received her law degree from Willamette University. For the last ten years, she has been a lawyer for the Alaska District Council of Laborers. She also has an awesome food blog and won the Alaska Democratic Party’s annual chili cook-off contest last year.

The new legislative director, Darwin Peterson, was most recently Sen. Bert Stedman’s chief of staff. He’s well liked in the Legislature, particularly among Republicans, which is important given that the make-up of the administration so far appears heavy on Democrats.

Finally, few will likely have a problem with Walker’s decision to keep Larry Hartig on. He’s been the commissioner of DEC since 2007, and by accounts, he’s done a good job.

Here’s the press release announcing the appointments: Continue reading

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What does a downgraded credit rating mean for Alaska?

I realized when I posted Garand Fellow’s piece about Alaska’s credit rating being on the verge of being downgraded by two of the three credit rating services, that although it sounds really bad, I didn’t fully understand what that meant for Alaska.

First a little background: There are three credit ratings services, Standard & Poor’s, Fitch, and Moody’s. Alaska has a AAA rating from all of them, which is the highest rating and means that the state has “extremely strong capacity to meet financial commitments.” In 2013, it was one of 13 states to have that rating. (At an A-, Illinois had the lowest rank among states.)

If the state’s rating is downgraded, it means that we might have to pay a higher interest rate on future state-backed bonds. But given that ratings agencies are cautious, and change ratings in slow increments, it probably wouldn’t have a huge effect on the state if it were downgraded, said Department of Revenue Deputy Commissioner Jerry Burnett, adding that those ratings are very important and DOR is taking it very seriously.

If the state is downgraded, which is a big if, “The sky is not going to fall…We’d have to be downgraded to junk bond ratings for that to happen and that’s not going to happen under any plausible scenario,” Burnett said. Continue reading

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AG’s office announces establishment of fund to help daughters of slain Assistant AG Sullivan

From the Alaska Department of Law:

The Attorney General’s office announced today that a fund for the daughters of Assistant District Attorney Brian Sullivan has been established to allow the public and Brian’s colleagues to donate in his memory. Brian was shot and killed in Barrow, Alaska on Monday, December 8, 2014.

Brian, who was 48 years old at the time of his death, had worked in the district attorney’s office in Barrow since 2012 and formed a strong bond with the small Arctic community. Prior to taking the post in Barrow, Brian had worked as a private attorney in the Mat-Su Borough along with his previous work in the military as a paratrooper and JAG lawyer and his four years of service in the Washington House of Representatives.

Deputy Attorney General Richard Svobodny described Brian Continue reading

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Comment of the day: Walker will have no one but himself to blame if Alaska’s credit rating is downgraded.

In a comment on the story about Standard & Poor’s warning Alaska to get its fiscal house in order or risk a credit-rating downgrade, reader Garand Fellow argues that not only are the credit ratings agencies urging Gov. Bill Walker to make tough choices, Alaskans have given him buy-in to do so also, if he chooses to go that route. If he doesn’t? The agencies, which are watching Walker closely, will take note. “If there is a credit rating downgrade it will come not from lowered oil prices but from lowered expectations of this still new governor,” Garand writes.

He/she drives the point home:  “This is a strong governor state. The governor can take action without having to convince an elected AG and an elected state treasurer. An Alaska governor who would rather not lead has no place to hide; no one else to blame.”

Read on:

The credit rating agencies are not surprised that a credit has challenges, and even a triple-A credit is expected to have them. But there are additional expectations. Cash is king, but the agencies expect to see more leadership, and decisive leadership, out of say a triple-A credit than they might out of a double-A credit. They expect no games; no hide-the-peanut, no razzle-dazzle, no Hail Mary action. They expect quick, organized, decisive action explained very well to Alaskans and to the agencies. I cannot imagine that anything would be a higher priority right now for Governor Walker.

What does this mean? It means that Governor Walker must bring agreement early in the legislative session to some plan that matches revenues and expenses before the CBR and SBR are exhausted. Counting on higher oil prices coming to the rescue, selling bonds (including pension obligation bonds), and making proposals that the legislature is unlikely to accept would not be appropriate for even a single-A credit (although downgrades are done in small increments over time, otherwise the agencies look like they may not have been paying attention).

The best and arguably the only tool Governor Walker has for the remaining half of FY2015 and for FY2016 is reducing expenditures. Continue reading

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Inside/Outside morning news roundup for 12.19

  • Medicaid released data today that showed that enrollment jumped even in states (including Alaska) that didn’t expand their programs. The New York Times drills down the data into readable bites.
  • Many communities are scrambling to figure out the best policies to govern marijuana possession and sales within their communities. It doesn’t help that Gov. Bill Walker is now talking about imposing some sort of delay. As the Fairbanks Daily News-Miner wrote: “(J)ust what mechanism Walker can use to delay the regulations is unclear” and would likely lead to a court challenge if he tried.
  • NovaCopper admits that they have ‘substantial doubt’ regarding the financial health of Ambler road without financial assistance from the state.
  • The LA Times Editorial Board wrote an extensive op-ed about Pebble Mine. Shocker alert: LA thinks Pebble is a bad idea.

Continue reading

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Loose Lips: The last boy scout. Keep calm and give Eskimo kisses. Solving one fiscal crisis.

Loose LipsOn Monday night at the New Horizon hanger in Palmer, over 100 Valley residents turned out to visit Sen.-elect Dan Sullivan and his wife Julie. Sen. Mike Dunleavy, who showed with his pistol but without his mule, helped organize the event. He and Palmer Mayor DeLana Johnson were the emcees, which they did a rather unique job of. As Sullivan stood on the sidelines waiting to talk, they continually passed the mic back and forth because they kept on forgetting that they had just one other thing to say. But Valley conservatives—many of whom leave their cushy government jobs at the office when they clock out at 4:30 p.m.—tend to be a patient bunch, and a plethora of cookies helped. Sen. Charlie Huggins also spoke before Sullivan had at it. He made some allusion to Dan Sullivan being the “last boy scout,” which may or may not have had something to do with a 1991 Bruce Willis film involving a pro-football team, a politician and a murder. But Huggins, as he always does, spoke with enough confidence and aplomb that everyone seemed convinced that something prophetic was being said. But the crowd—including Sullivan–was sincerely and understandably touched when Tammy Miller, president of the Mat-Su Republican Women’s Club, presented Sullivan with a pair of cuff links that were made by Sen. Ted Stevens that read, “To Hell with Politics. Do What’s Right for Alaska.” But what brought the crowd to their feet was when Sullivan paid tribute to Alaska’s veterans and introduced Wayne Woods, a gold star parent, and Cajun Bob Thoms, a Vietnam vet who is the recipient of a silver star, two bronze stars and six purple hearts. Other legislators spotted: Reps. Bill Stoltze. Shelley Hughes, Wes Keller and Lora Reinbold. Also there: Bethany Marcum, Mike Coons, Ben and Kathleen Rowell, MEA’s Joe Griffith, Sonya Walden, Joe Balash, John Shepherd, Dave and Dana Cruz, Becky Huggins, Rep.-elect Cathy Tilton, John Lee, Noel and Jean Woods, Curtis Thayer, John Harris, Otto and Nancy Feather, Myrna Maynard, Mat-Su Borough Mayor  Larry DeVilbiss and Assemblyman Steve Colligan, former Lt. Gov. Mead Treadwell and his mother Anne, and Wasilla City Council member Gretchen O’Barr.

Speaking of Mead Treadwell: He told me on Monday night that he was “not ruling out” running for Anchorage mayor. Continue reading

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Standard & Poor’s warns that Alaska must reduce deficit to keep credit rating

In an analysis of the fiscal situation in Alaska, Standard & Poor’s wrote that in order to keep its credit rating, Alaska must reduce the budget deficit given the low price of oil.

“Although the rapid decline in oil prices exacerbates Alaska’s existing fiscal budget deficit, whether it will weaken the state’s credit quality will depend on the state’s budgetary response,” the credit rating service wrote. In most other cases, a $3.5 billion, equal to 57 percent of general fund expenditures, would “likely result in immediate negative rating consequences.” However, S&P is not changing its ratings yet because of the state’s large budget reserves, as well as the ability of the state to tap into the Permanent Fund earnings reserve balance, and the constitution budget reserve.

A decline in Alaska’s credit rating could cost the state hundreds of millions of dollars.

Here’s S&P’s analysis in full:

Alaska has built up layers of budgetary reserves that allow it to absorb one or two years of large operating  deficits — just outside of our outlook time horizon –at its current rating level. But in order for it to avert credit quality deterioration, we believe the state must make material progress in reducing the deficit in its fiscal 2016 budget.  Continue reading

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Quote of the day: Bauer takes Demboski to task over pot ordinance  

The opinionated Anchorage mayoral candidate Paul Bauer Jr. took a side-swipe on Facebook at fellow candidate for mayor Assemblywoman Amy Demboski over her proposed ordinance to ban pot in Anchorage, which failed.

My position: Marijuana. I did not vote for Ballot Measure #2, the legislation to legalize the drug marijuana in our community. I could not support legalizing inhaling a drug substance as I view it as a toxin to my body and to others around me.

However, contrary to the oppositions statements of a slim margin win; the people of Alaska spoke with a 53-47 percentage approval to tax and regulate the production, sale, and use of marijuana for adults 21 and over.

The ordinance by a mayoral candidate on the Assembly to “opt out” of the discussion Continue reading

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Inside/Outside morning news roundup for 12.18

  • The Fairbanks Daily News-Miner covered the final day of hearings on the proposed Amber road project. Opposition is building and was vocal at yesterday’s meeting.
  • KTOO has an in-depth feature on how whistle-blowers and victims in the Alaska National Guard sex abuse scandal went unheard.
  • The Department of Health and Social Services has created and filled a new position to help the state reach its goal of expanding Medicaid. APRN announced the “lucky” person to steer this behemoth challenge is Chris Ashenbrenner.
  • RealityCheck.org wonders if Gov. Walker can overcome GOP opposition to successfully expand Medicaid.
  • The story-breaking machine Becky Bohrer broke the story about how the federal natural gas pipeline coordinator’s office is scheduled to close due to budget redistribution.
  • Austin Baird of KTUU compiled Facebook and Twitter posts on post-November 4th lives of Gov. Walker and former Gov. Parnell and wonders who really won that day.

Continue reading

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Meet First Lady Donna Walker

Last Friday, I sat down with Alaska’s new First Lady for about an hour and a half in the family’s beautiful Turnagain home, a home with a view of the inlet that her husband, Gov. Bill Walker built. He’s handy like that, she said. Building things, moving things around, pounding nails is his therapy, she said, which she admitted can be a mixed blessing. If she’s the steady one, the homebody, the one who pays the bills and keeps the family on schedule, he’s always on the move, always fixing things, often enlisting the help of those around him. His children’s friends used to call the new governor, “the animal” because he had so much energy.

“Don’t get around Mr. Walker unless you’re ready to knock down a wall,” the kids said.

donna walker.jpg II.jpg III

The home has some Alaska art on the walls. But the dominant decorations are the pictures of the four Walker children, and now a few of their children, with more little ones on the way.

We’ve heard a lot about Bill Walker, but I wanted to hear more about his wife Donna. I wanted to meet her. I hardly knew anything about her. And if I didn’t, chances are I’m not alone. Most who have seen her on television, say, or on the campaign trail, would likely describe her as a strong, independent woman. And she is. She’s the first First Lady of Alaska with a law degree. Ask anybody who was involved in the campaign and they’ll tell you how involved she was, how keenly smart she is and how she kept everything organized and kept the wheels running. Continue reading

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Quote of the day: Should we cut Alaska’s space program?

From Democratic Rep. Les Gara’s newsletter:

At a time of $3 billion budget deficits, continuing the spending of $58 million in state funds over the past five years, on a nearly idle Kodiak Rocket Launch facility which has LAUNCHED ONLY 2 successful rockets since 2010, is not fiscally prudent. Three days of successful and failed launches in nearly 2,000 days is not a model of success. I’ve listened to five years of promises by proponents telling the Legislature they are about to turn the corner, sign big contracts, and stop losing money. The “we’re about to sign a big contract” line is getting old, and expensive.  I hope this facility has value.  If it does, the private sector can measure that, and, in my personal view, purchase it and run it more successfully.

Read more about the state’s space program here. Also read about the new plans for the facility here. 

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Comment of the day: Why not use coal to power Fairbanks?

Here’s a comment from Andy, who’s wondering why Fairbanks is so intent on LNG when there’s a gargantuan coal deposit right down the road. I know next to nothing about this, and don’t have time today to dig into it. Anybody have thoughts?

Energy is energy, it comes in all sorts of forms. The easiest and cheapest is low cost electricity, which can run everything, including vehicles…The most economical electrical power is obtained from nuclear, which we all know is a no starter. The next in line is coal. We have clean coal technology that produces EPA-approved emissions. Given the fact that Alaska is blessed with a gargantuan amount of low sulfur, high BTU coal, it is a shame that the interior cannot benefit from this. The Healy plant, capable of 175 megawatts ( I think), would produce electricity to power 175,000 homes. That’s a big chunk of Fairbanks.

Take the big bucks going to LNG, and you could get Healy up and running, and build another plant as well. Tie these two plants to a common statewide grid and voila, problem solved. Alaskan coal would be a stable, predictable fuel cost, and provide cheap electricity for generations. Why we continue to pump money into oddball energy schemes is bizarre.

Walker et al need to get serious about an energy plan and stop pussyfooting around with these fantasies. Clean coal technology for those on the grid, and LNG for the bush via barges, makes sense. The plethora of electrical fiefdoms needs to be addressed as well. An energy policy may help that problem as well, and don’t forget to drop the crazy renewable mandate.

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Inside/Outside morning news roundup for 12.17

  • Gov. Bill Walker told the Greater Fairbanks Chamber of Commerce yesterday that he isn’t expecting oil to rebound and that fact will be reflected in budgets going forward, according to the Fairbanks Daily News-Miner.
  • In really bad news, Bloomberg announced that Moody’s Investor Service has downgraded Alaska’s outlook credit rating to negative since the price of crude is so strongly attached to Alaska’s revenue.
  • The Fairbanks Daily News-Miner reports that the AIDEA board is considering an extension for the challenged LNG trucking project, which has people wondering if it’s going to happen at all.
  • The Anchorage Assembly finished the coup that it began last week! Alaska Commons reports that Patrick Flynn was voted out as chair and was replaced by Dick Traini with the ever-enviable Elvi Gray-Jackson as vice chair.
  • In other Anchorage Assembly news, Suzanna Caldwell covered last night’s meeting where Assemblywoman Amy Demboski’s proposed ban on commercial marijuana was killed 9-2, which likely really bummed the Mat-Su Valley out.
  • The end of the 113th Congress is official. While many people have remarked on this event with rather-err- colorful words, the Washington Post gathered quotes from senators who were on their way out the door. One of them, Democratic Sen. Tim Kaine from Virginia, even quoted Wittgenstein.

Continue reading

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Tweets of the day: Walker talks energy in Fairbanks as LNG trucking project stumbles

Gov. Bill Walker spoke to the Fairbanks Chamber of Commerce on Tuesday, where according to Fairbanks Daily News-Miner reporter Matt Buxton, he said this:

If there is one bright spot in the tumbling price of oil, it’s that low oil prices will bring down the cost of heating fuel in Fairbanks. So, in this area at least, Walker doesn’t really have to do much.

However, he will have to do a lot if he’s serious about this: Continue reading

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AIDEA announces $17 million dividend to the state

Speaking of AIDEA, the board on Tuesday approved a $17.65 million dividend to the state, which will go into the general fund. Since its inception, the state agency, charged with providing project financing, has returned $373.5 million to the state in dividends. Also, according to an AIDEA board member, the agency plans to reduce its budget by 10 percent this coming year.

Here’s the press release:

The Alaska Industrial Development and Export Authority (AIDEA) Board on Tuesday approved a dividend of $17,650,000 to the state general fund for Fiscal Year 2016. The dividend represents 50% of AIDEA’s FY2014 Revolving Fund net income for dividend computation purposes of $35.3 million.

“We are pleased to announce this dividend to the State of Alaska,” said AIDEA Board Chairman Dana Pruhs. “Our dividend is another great example of AIDEA’s valuable contribution to Alaska’s economy.”

Since the dividend program’s inception, AIDEA has declared more than $373.5 million to the state, including the $17.6 million approved Tuesday.

The Alaska Industrial Development and Export Authority is a public corporation of the state. AIDEA’s purpose is to promote, develop and advance the general prosperity and economic welfare of the people of Alaska.

 

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