Inside/Outside morning news roundup for 12.12

  • The Dispatch reports that Gov. Bill Walker says he will keep his campaign promise by asking departments to cut 5 percent from their budgets.
  • Does the Kodiak Launch Complex have any intention of going away? Nope.  It wants to get bigger. The AP is reporting that the Alaska Aerospace Corp. is expected to announce expansion plans. Do those plans include asking the state for the $100 or so million it said it would need in 2012 for such an expansion?
  • Up in Fairbanks, Matt Buxton was on hand to cover the Fairbanks North Star Borough Assembly where two issues that seem to contradict themselves passed. First, they endorsed the state air pollution measure that will tighten air pollution regulations and then they voted for permanent registration for older vehicles and trailers.

  • Many liberals are considering the spending bill a rallying cry to abandon Pres. Obama and join ranks with Sen. Elizabeth Warren. Politico explains how this will affect Pres. Obama’s last two years in office if he cannot woo his party back.
  • A major feature film is expected to be shot in Whittier, and Gov. Bill Walker, along with lobbyist Jim Lottsfeldt and Hollywood producers discussed the project over dinner on Thursday at the Alyeska Resort. Read dishy details here. 
  • The Hill reports that more than 300 former Obama campaign staffers have signed a letter urging Sen. Warrant to run in 2016. The open secret behind Obama’s win was his citizen army. If they as a group want Warren, I’d like to see the other side’s army that could try and stop them.
  • Oil prices are now so low that Norway is cutting down their interest rates, according to CNBC.
  • Hold onto your chocolate milk: Mitt Romney is back. It seems that the 2016 potential GOP candidates just aren’t impressive enough to keep Romney home this election cycle. Politico received word that he is “open to run again.”
  • Juneau City Manager Kim Kiefer spoke at the Juneau Chamber of Commerce to brief them on the FY16 budget, which involves a $9.2 million deficit. The Juneau Empire has the details.
  • President Obama believes that Congress should let the legalized reefer madness that will soon sweep D.C. go on its merry way, according to The Hill.
  • The Kodiak City Council listened to potential changes with the city’s contract with a compost company, according to the Kodiak Daily Mirror.
  • The Frontiersman has all the information about the open house where you can meet the new Alaska State Fair director Jerome Hertel on Sunday.
  • The annual report by the U.S. Conference of Mayors on hunger and homelessness show a continued rise in numbers from last year with Governing looking at Congress’ lack of action as one of the causes.
  • The Cook Political Report has the breakdown of unique ads aired last election cycle by incumbent U.S. Senators. Sen. Mark Begich’s 21 ads looks rather paltry compared to Sen. Mitch McConnell’s 61.
  • Sen. Mark Begich might have chameleon qualities, but he did not decide to turn into FBI agent Ali Sufan after his loss.

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8 thoughts on “Inside/Outside morning news roundup for 12.12

  1. AH HA

    Alex Demarban published a story today in the dispatch that pretty much has the Administration tossing out any plans of a welfare expansion….it appears that Governor “Walk-Back” Walker is reneging on all of his campaign promises as of now. Apparently the Governor is claiming a ‘Paradigm Shift’ in the states financial status and is now clearly signaling that he will not expand Medicare and will probably not be able to balance the budget. It sounds as though somebodies pet pipeline, Alaska Stand Alone Pipeline is still on the cutting block though, making it the only promise he will be keeping. (Sorry about that Rep. Hawker)

  2. AH HA

    @Garand, I think to be truthful, at this point we have an income problem because we no longer have an option. There are some things that could be done to create some real savings but they are politically untenable in Juneau and for the people we currently have seated on the assembly will remain untenable no matter the financial situation.The bills are now due and I think it’s pretty doubtful that any force of nature is going to move our assembly to suddenly become ‘fiscally responsible’.

  3. Garand Fellow

    It appears we agree that Juneau city government doesn’t have an income problem, it has a spending problem. One letter to the Assembly I saw said that city government has one employee for every 17 residents, and I believe that to be true! Juneau will soon be far more worried about its debt as reducing the reimbursement of municipal school debt service is almost certain to come if oil prices remain low. If $60 oil is the new norm then Juneau will before long be mothballing one high school and possibly one middle school.

    I think that taxing lobbying would precipitate moving the capital out of Juneau. Lobbyists have power. Juneau’s lobbyist is Exxon’s lobbyist, etc. etc. Moving the capital would on balance be bad, but it would not be all bad.

    I think it’s auto dealers, outboard dealers and the like that will suffer most from raising the per item ceiling. Barge fees have already gone down in response to lower oil prices, and Seattle dealers are just more competitive.

    Some seniors tell me that they have figured out how to use some Amazon-like firm to ship groceries to Juneau if their tax exemption goes away. I think that in the mid to longer term there will just be fewer seniors choosing to live in Juneau if the senior tax exemption is removed, and like the capital move that would not be all bad. Many seniors believe they have paid the sales tax for 40 years or longer and they deserve to finally be exempt upon reaching 65 years of age. Many seniors say that city government is far, far friendlier to and concerned about downtown homeless, indigent drunks than it is about seniors but it’s all the same to me.

  4. AH HA

    @Garand Fellow; I am one Juneauite who is quite willing to talk about ending the tax break for seniors, raising the per item sales tax limit and forcing lobbyists to pay taxes.

    To start with, I am personally against any tax at first blush but I am also a realist.. things cost money to build or buy and generally cost more money to operate and maintain. In Juneau our problem is that we have had a very bad habit of building and buy a lot of stuff that we ‘wanted’ but did not ‘need’ and were quite disingenuous in how the true cost to the tax payers was explained. We were able to do this through a clever device called a Bond. Bonds allow the municipality to pay later for things that it builds or buys today. The problem with these bonds is that they do not pay for future costs of ownership… operations, maintenance and staffing. Because of this, bonds are something that can be a little to convenient if not used very carefully. Juneau as not been as careful as we should have been and our debt service for 2015 year exceeds $25,000,000. Having a debt load this high is bad enough but what was never explained clearly enough to the voters who approved these general obligation bonds is that the true cost of each of these projects also represented a vast increase in the operations and maintenance budget and also in many cases caused a significant increase in personnel costs for the city as well.

    A lot of our fiscal problems are the result of poor fiscal responsibility in years past now coming home to roost. Giving Seniors a break on this amounts to allowing the folks who spent the money too avoid the bill when it comes due. These folks were all voters who allowed a New Skating Rink, New Pool, New Schools, New Parking structures and a giant new police department building. All bought on tax dollars to be paid in the future. All were items that were ‘wanted’ but not ‘needed’.

    The sales tax cap on individual items is a boon to shops who sell very high end items in that it allows a marketing strategy where the Jewelry salesman can offer the customer a perceived ‘discount’ of five percent on any single item purchase of $7500.00 or more. There is no benefit to the city in this exemption since nearly all sales of this type are conducted by non local owned business that operate in downtown Juneau on a seasonal basis and who primarily employ non local labor on a seasonal part time basis.

    The Sales Tax exemption for lobbyists is ridiculous on it’s face and was only created through the efforts of lobbyists and has since been defended by them whenever threatened. It’s my thought that three might be some real money involved here and there is no reason that the city should not have it’s cut.

  5. Garand Fellow

    Great accumulation of information as always on I very much agree with Lynn Willis’s view of banks, Obama’s Federal Reserve, and Obama’s stimulus (below). However, I still expect the Keystone Pipeline to be built, and I think that royalty incentives to keep TAPS operating can be worthwhile on a case by case basis.

    If Governor Walker only cuts 5% in the face of a 35% or greater reduction in revenues then the state liquidity other than the Permanent Fund cannot last this 4 year term without a doubling of oil prices within 12 to 18 months. There are lots of variables of course, including the court ruling on the Ketchikan and Fairbanks case over state funding of urban vs. rural schools. But 5% is only withing the rounding error of the needed reductions in general fund spending. And leaving it entirely up to the legislature is a big mistake.

    The Juneau city manager carefully avoided mentioning that the city seemingly intends to do away with sales tax exemptions for seniors, raise the per item sales tax cap, and tax lobbying to balance its budget. No one is going to talk much about it until it’s a done deal.

    If OPEC is dead then lower oil prices far into the future are more likely. Alaskans should plan accordingly.

    Everything Obama does is bad for America, and everything he touches turns to mud. So if the Taxachusetts senator thwarts his lame duck agenda and pushes aside Hillary Clinton in the bargain it cannot be bad news for Alaska. Alaskans are so thankful for the November 4 turnover of the US Senate.

  6. DB

    Lynn, well said re the banks and the QE1,2,and 3. Only one comment: I believe all Alaskans have been rubbing noses with the Feds for many years. Guess it’s time for payback.

  7. Lynn Willis

    Thanks again Amanda for all your work.
    I would hope our legislators upon return from their latest junkets (including those trips necessary to establish critical reflations with the federal government by rubbing noses with Joe Bidden) would ponder the chart printed in the Telegraph article showing production costs of some of the prominent oil shale prospects. They might notice that as oil prices decline more, these oil shale prospects become untenable to produce and the report in the article that the Canadian Oil Sands are now a marginal prospect (kiss the XL pipeline goodbye).
    Also included in that article is the lament by Bank Of America regarding the demise of Quantitative Easing – a program that “allowed” the taxpayers to purchase the useless legacy of the toxic investments of these banks that almost crashed the world economy. What a deal; junk for cash, and that cash was created by the US Treasury from thin air simply to purchase that worthless paper junk. Therefore with cash flowing to the banks from Quantitative Easing they don’t need my money and my savings are worth nothing to the Bank of America. They pay me tenths of a percent interest on savings thereby forcing me into the stock market where now they want even more federal protection for themselves in the latest budget bill (yet certainly not me). That said, this flow of cash from the taxpayers also allows these banks to loan money (except apparently for home mortgages) for low interest rates which again, is great for business, but not for those who would save. The telling line in the Telegraph article is: “What is clear is that the world has become addicted to central bank stimulus.”
    How interesting that this week’s stock market downturn is blamed on falling oil prices when earlier I was told that a “reliable and affordable” source of energy would solve all my problems. The Alaska Permanent fund is reported to be bracing for a significant downturn in the markets so what does that tell you about the solvency of most people’s retirement plans?
    These legislators might further reflect on the wisdom of their deficit state spending of the last few years then further ponder the wisdom of now granting royalty reductions and other inducements to help develop Alaska’s marginal fields. Regarding this subject, there is more good news in the ADN this morning in Pat Forgey’s article “Fund earnings top oil revenue” which contained this gem regarding the benefit of the highly touted “Cook Inlet Renaissance” to the state: ” In Cook Inlet, meanwhile , production has increased to almost 16,000 barrels a day, and may increase “modestly” but productions (sic) taxes to the state are “negligible” because of incentives in state law. How smart are we to now induce “negligible” taxes.
    I suppose in a few years all Alaskans will be wanting to rub noses with the Feds.

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