Inside/Outside morning news roundup for Jan. 2

  • RIP Mario Cuomo. You’ll have a lot to pick and choose from, but if you only read one piece today about Cuomo, read this great piece (from Yahoo News?) about how the “Tale of Two Cities” speech he gave at the Democratic National Convention in 1984 forever changed the Democratic Party.
  • With Kenai’s bluffs retreating at an Army Corp of Engineers-estimated rate of 3 feet a year, the Peninsula Clarion outlines the hoops (with a spiffy graphic) the city must jump through to get a project funding.
  • APRN’s Liz Ruskin reports on how Arctic shipping might have been over-hyped in the past few years. It turns out that the ice isn’t melting as fast as has been predicted. In 2014, just “31 ships sailed between Europe and Asia across the Northern Sea Route, and 22 did part of the route. That’s down from a total of more than 70 in 2013,” Ruskin reports.
  • Polls from NBC/WSJ and Fox News regarding how Americans viewed 2014 reveal “how depressingly partisan America has become,” according to the Washington Post. If you are a D, you thought 2014 was groovy. If you pitch for the other team, 2014 was a bummer.
  • The Deck Boss’s Wesley Loy writes about an “intriguing proposal” from the Seattle-based Fishing Vessel Owners’ Association to reduce the minimum size requirement for commercially caught halibut from 32 inches to 30 inches.
  • ISER’s Gunner Knapp and Gov. Bill Walker’s Deputy Chief of Staff Marcia Davis explained to KTUU’s Dan Carpenter (sporting a vibrant Trumpesque tie) how Alaska’s $3.4 billion deficit would impact the state.

  • Former Ku Klux Klan leader, David Duke told Fusion that he will expose politicians with ties to white supremacists if criticism over House Majority Whip Steve Scalise (R-LA) doesn’t stop.  To which, I say, “Bring it on.”
  • The Hill is trying to put out a helping hand with New Year’s resolutions for GOP presidential candidates to improve their shot at the Oval. I particularly enjoyed the advice for Gov. Chris Christie: “Hip check Jeb,” they advise, who is going after the same centrist voters as Christie.
  • The Fairbanks Daily News-Miner reports that the airplanes will be full of Alaskan officials flying to Colorado to attend a $325 per person conference on Jan. 14 that will focus on Public Health and Safety for states that have legalized pot.
  • The Dispatch’s Dermott Cole reports that oil production dipped 21,000 barrels a day during the first fiscal year of SB 21, which, depending on how you roll, means a lot, or nothing at all. One thing is for sure: because of low oil prices, the state is in better shape now than it would have been under ACES, he says.
  • The Ketchikan Daily News reports that a financial backer pulled out of a deal that would have reopened the Tulsequah Chief Mine in Canada.
  • South Dakota can breath a little easier now that Kelly Hepler has been cleared of an ethics complaint by APOC for using a “working title” instead of his official state title on his resume for his new gig as SD’s Game and Fish Secretary, per the Juneau Empire.
  • The New York Times thinks the electorate has unrealistic hopes for our presidents.
  • The Mat-Su Borough Mayor wanted the Frontiersman to be clear about the pot meeting he’s called for in two weeks time: It is strictly to gather “input on areas that need regulation or legislative clarification or fix.”
  • Politico has a Millennial’s guide to all things 90’s and Clinton. Remember Gennifer Flowers?

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19 thoughts on “Inside/Outside morning news roundup for Jan. 2

  1. Andy


    There is a lot of gold in Ft. Knox ( we are told), but you can’t get to it.
    Oil is the same way, if we are not allowed to drill for it because of some environmental mandate, it is lost treasure forever.

    Oil, oil everywhere but not a drop to develop. Don’t fault the industry, fault the anti-development zealots and a government that would rather borrow money from China than create capital from opening federal land to the
    benefit of all. It’s bizarre that the ” Move Forward” sticker on the green Subaru I saw today uses gasoline…… evil oil consumer!

  2. AH HA

    Speaking of ‘old school’, does any one besides Lynn and I recall Governor Frank Murkowski calling together fifty Alaskan’s in February 2004 for the express purpose of discussing Alaska’s ‘Fiscal Gap’? The fiscal gap was characterized by several years of the states budget being balanced via spending non current income to balance the gap between recurrent income and recurrent expenditures.

    This problem predated Murkowski and although there was some discussion it was not effectively addressed during his time as governor and has not been addressed since then.

  3. Garand Fellow

    I’m afraid I am compelled to agree with Lynn Willis here. And there was a time in my life when from time to time Roger Cremo would call and speak with me, although I never did meet him. What a fine, intelligent and wise gentleman. He was an important Alaskan.

    I hope elected officials bring state and municipal spending down quickly enough and far enough to satisfy the credit rating agencies and to allow entrepreneurial Alaskans to create a post-petroleum economy. If instead there is an attempt by the 29th Alaska Legislature and Governor Walker to continue this huge legacy government that oil built using new taxes and subterfuge then innovative, hard-working young Alaskans will go elsewhere to take their risks and spend their energies. We need state and municipal government spending to quickly fall below the US average in per capital terms, and only that action will minimize the economic dislocation coming from this unexpected drop in the price of ANS. Don’t expect any help or even constructive suggestions from lobbyists, the media or (especially) municipal officials. No, we now very much need elected officials to be leaders.

  4. Lynn Willis

    I sometimes feel that way also yet the human misery associated with what will be true financial depression in Alaska motivates me to encourage our leaders to now remove their heads from a dark warm space and do what can be done now to avoid that object lesson.
    A depression certainly lowers housing costs; however, aren’t housing costs already artificially inflated by a real estate industry that has convinced people that a home is not only shelter but also an “investment” that allows creation of a revolving credit line, by a banking industry, often using federal backed mortgage funds and a federal “bailout” when necessary, eager to loan to the point of danger (as was recently aptly demonstrated) and by a government that encourages inflated prices by granting tax breaks for interest on home ownership debt?

  5. Jon K


    Once again you are missing a simple point: SB 21 is one of the highest tax regimes that the state has ever put in place. If SB 21 is unconstitutional, then that means every production tax system is since they all bring in less revenue than SB 21 does at different price points. If you want to make an argument that ELF, ACES, the 1 percent gross tax at statehood, or the 2 percent gross tax put in place after the Fairbanks flood were all unconstitutional, you would get laughed out of court.

    Regarding north slope employment, here is a story on how, according to the Dept of Labor, we are currently at records levels:

  6. Lynn Willis

    Sorry, but reality can be very irritating . Nothing is certain Jon; however, based on data and history statisticians project future events with a “high degree of confidence”.
    Oh, if not for those seemingly minor “impediments” of “access and costs” those “staggering amounts” of oil would be flowing down the pipeline and we would be back on a sustainable revenue base. But then again, maybe those impediments aren’t so minor? Also, you might have added the impediment of market forces. I appreciate your observation about reserves of oil in the Arctic yet Alaska doesn’t control but a small portion of the Arctic regions of the world and then there is the Middle East and elsewhere.
    Also, I don’t see us as having 70 billion in the bank, I see our children and their children as having 70 billion in the bank. Are you perhaps in the vanguard of the “me generation” of some Alaskans now prepared to smash our piggy bank by spending the corpus of the Permanent Fund as a viable contingency?

  7. Forecast

    Jon, your arguments fail because they are intellectually dishonest. You continue to offer a false dichotomy. SB-21 could have had whatever rates the legislature wanted. The rates that they opted for give away the oil. Literally.

    The Constitution requires in Article 8 that we get the maximum benefit for the oil (resources) that we own. You ignore this, and this also undermines your position.

    My “side” is the one that respects the Alaska Constitution. My side would stop giving away the oil and invoke a gross system. My side would end the massive, bankrupting deficits that will destroy our state and eliminate the Permanent Fund Dividend program.

    Jobs: We had almost 13, 000 jobs in oil and gas before SB-21 was imposed. Those 13,000 jobs were an ALL TIME RECORD.

  8. Jon K


    At $100 oil, SB 21 was the second highest tax rate in the state’s history. At today’s prices it brings in more revenue than ACES. This is a fact.

    If SB 21 is unconstitutional, then so is the Cook Inlet tax regime that Les and Hollis voted for, which has zero production tax on oil and so was ACES at today’s prices since it brings in less revenue than SB 21. I also would love to know how you determined that SB 21 was unconstitutional – at statehood the severance tax was 1 percent. Was that also unconstitutional? What tax rate is constitutional?

    I’m not lying about anything related to employment. Capital spending is way up and so is employment. Yes BP has laid off people, but employment across the slope is at record levels according to the Dept of Labor.

    Let me make this very simple: if your side won and repealed SB 21, ACES would be on the books and we would have larger deficits and possibly $500 million less revenue – according to Tim Brander.

  9. CPG49

    Amanda –
    You forgot a category in your best and worst column of 2014. You should have made one for Forecast for being the most consistently uninformed commenter on your site. Can’t you block his stupidity ? I don’t object to differing opoinions. I just find outright stupidity very annoying.

  10. Forecast

    The facts:

    SB-21 violates the Alaska Constitution.

    Exxon and Conoco have testified under oath that they will not increase production.

    Alaska may see NO severance revenue. Worse than free oil.

    Corp and property taxes are a fraction of total revenue.

    ACES triggered record employment on the North Slope. Why are you lying about this? Did you recall the recent BP layoffs of hundreds of employees?

    Have you paid attention to what the oversupply of oil on the world markets has done to price? Exxon is not going to ramp up production from Alaska to add to this problem.

    So. We are giving away our oil. We are losing millions of dollars a day while we pull $11 million per day from savings to avoid bankruptcy.

    Tell, us Jon, are you advocating an income tax, the loss of dividends, and a sales tax to make up for revenue we lose by unconstitutionally giving away our finite resource?

  11. Shattered

    Jon, you should get packing for Texas then. I can’t understand why you’re sticking around here. Now that the only capable governor we ever had has been voted out of office, it would be a good idea to abandon this sinking ship.

    They know how to run a state. There’d be a lot of opportunity for a smart guy like you. I have yet to see you be wrong about anything. They would appreciate someone like you in Texas.

  12. Shattered

    Ya know Lynn, I keep thinking that a good crash would be beneficial to the state. It would force the legislators to live within our means. It would also result in a lot of the carpetbaggers going back to where they came from. This would make a home affordable to those of us that aren’t making six figures a year.

    It would be painful for awhile, but would be beneficial in the long run.

  13. Jon K

    Lynn, the arctic still has staggering amounts of oil. The impediments relate to access and costs. The North Slope is also woefully underexplored – about 500 exploration wells have been drilled in an area the size of Wyoming, which has drilled about 20,000 exploration wells. Texas has had over 120,000 exploration wells. Talk to any geologist and they will tell you the North Slope remains a world class hydrocarbon basin with immense untapped potential.

    I don’t know where you get your certainty from but I find it irritating.

    Finally, we do have $70 billion in the bank.

  14. Lynn Willis

    Regarding the ISER article; some of us from the “old school” see a 3.4 billion per year revenue shortfall, which was covered by savings, as a 6.8 billion dollar future revenue requirement in the second year. How else can you both prevent another years’ 3.4 billion drain on savings and replenish what we took from those savings in the first year?
    The sad fact is that we are paying for the sin of our elected officials for not paying attention to the likes of Roger Cremo who, decades ago, warned us not to directly spend the revenue from the sale of our non-renewable resources. We could have and should have invested every dime of direct revenue and spent only the income from those investments. We might have elected only those who understood that simple and powerful lesson and who would have had the courage and foresight to continue to tax individual Alaskans for the difference between our income from non-renewable resources and the budget amount deemed necessary to support this state and to force the issue of creating local taxing authorities..
    Sadly we didn’t and we apparently didn’t learn a thing from our last brush with falling oil prices in the 80s’. Back then we had the production to glean the income when prices rose and we returned to our habits of spending as if nothing had happened. That can’t happen this time around because we simply don’t have the easily accessible oil to sell even if there was a resurgent demand. I notice now that when the topic of US domestic oil production is being discussed Alaska is hardly ever mentioned. That wasn’t the case twenty years ago. Yet, we have elected officials and others who still believe we are every bit as important on the international/domestic stage regarding oil production as we once were.
    I would ask Alaskans to attend constituent meetings with their legislators before they leave for Juneau and voice your concerns before they enter their “comfort zone” in far away Juneau soothed by the words of those who claim this isn’t really a crisis (yet) and with visions of gas sales dancing in their heads.

  15. Jon K

    Forecast – you should read the Revenue Source Book put out by the Walker Administration – they’ve come to a different conclusion re SB 21. Investment will continue to rise, we are seeing more competition, and production will stabilize for the next couple of years – they even conclude that it will exceed what they were expecting to see under ACES. Every possible metric shows the SB 21 is working. We had the most successful lease sale in decades, employment is at an all time high, we are seeing a record amount of drilling, and more companies are coming to the Slope.

    Regarding the state’ take, I don’t understand why you don’t look at the total revenue – why exclude our royalty share, income tax, and property tax? I’m not sure what our total take is at $55 oil, but at $100 oil, the state gets the largest piece of the pie. I do know that we are getting a larger share of revenue than we would have gotten if AcES was on the books.

    So what does the optimal tax system look like to you?

  16. Forecast

    Once again we are reminded that SB-21 is a absolute disaster. We have a $3.5 billion dollar deficit. Production still declines as Exxon and Conoco have said under oath that it would.

    The legislators/saboteurs that are giving away our finite wealth should be investigated for corruption.

    The severance revenue on $12 billion dollars worth of oil will be less than $500 million. Worse, with the credits put in place we could be paying Exxon to take our oil.

    Most important to give away the oil. We don’t need schools, or troopers, right Chenault, Hawker and the rest of you who lie every time you take an oath to uphold our Constitution.

  17. Forecast

    Better than sending anyone on a junket, ask if Alaska really needs more regulations. Send no one.

    People have been selling pot in Alaska for decades without government regulations.

    The mantra of Republicans seems to be “I’m from the government, and I’m here to help. We need to regulate you, fine you, and tax you.” Ahh, how far the Republicans have drifted away from the ideals of Ronald Reagan.

  18. Garand Fellow

    All the state and municipal public officials heading to CO for a junket of major proportions indicates to me that no one gets it yet, at least in government. We are spending our savings to meet daily expenses, and a recovery in state petroleum revenues is not on the horizon. Send one Alaskan and have him/her speak on a statewide teleconference upon returning to Alaska. Or better yet, buy a transcription of the presentations. Would the public officials kick in half of the cost from personal funds? Would these junketeers at least donate their airline miles to save government costs for subsequent travel?

    If state and municipal government can afford to send more than one official then we have too many officials, which is good news so long as we have elected leaders who can recognize and act upon that. I really thought that Governor Walker would quickly respond to the fiscal situation. I am disappointed and discouraged. Remember, deficit spending means that for this trip these people are drawing down one-time savings accumulated when oil prices were about twice what they are today. Someone needs to evaluate whether we can do without these people at their jobs for the next few years given that apparently we can get along without them for a week. Let’s furlough them until oil prices come back!

  19. JPMc

    Great roundup, Amanda. I found the ’90s for Millennials’ article fascinating, even though I lived through all of it. Should have been paying better attention, I guess.
    And FYI, Gunnar Knapp’s group is ISER (Institute of Socio-economic Research).

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