On the heels of a big win for Alaska Republicans, the party's senators gathered in political conclave Wednesday hashing out leadership positions as well as an agenda for the upcoming legislative session. At about 4 p.m. the group anointed their leadership not with the white smoke of a papal election, but via press release:
Meet your new Republican-led Alaska Senate leadership:
- Senate President - Senator Charlie Huggins
- Senate Majority - Senator John Coghill
- Rules Chair - Senator Lesil McGuire
- Finance Co-Chair - Senator Kevin Meyer
- Finance Co-Chair - Senator Pete Kelly
The agenda, Senate President Huggins said, was to cut state spending, cut oil taxes to increase production, and spur in-state use of natural gas, of which Alaska has mammoth reserves yet negligible access for its citizen-owners.
Across the state, Alaskans are choosing between groceries and heating fuel. Some in Fairbanks and other parts of the state have resorted to heating their homes with wood. The Republican Senate majority -- the first party-line Alaska Senate majority in nearly a decade -- will attempt to address this inequity. Just like the last bipartisan majority did, along with others before them.
Noticeably absent among the group of 10 were Sens. Bert Stedman and Gary Stevens, moderate rural Republicans who were visible leaders of the now-defunct Senate bipartisan majority. Also absent was Sen. Pete Kelly of Fairbanks, who's in Indonesia on a church mission.
No Democrats were present, including rural Alaska Sens. Lyman Hoffman and Donny Olson, both of whom had in the past joined Republican-led majorities. And it’s unclear how many were invited. At the announcement, Huggins emphasized that the majority was in its formative stage and that leadership was reaching out to others, including Democrats. He vowed that whatever happens, the coalition will represent “all of Alaska.”
Democratic Sen. Hollis French, for one, wasn’t asked to join the majority; or, in his words, "I wasn't invited to the prom." It’s unclear whether he and the six other Democratic senators will form their own group. French remains in campaign purgatory, less than 300 votes ahead of challenger Bob Bell, with many absentee and early votes yet to be counted.
As of Wednesday, the chamber was in the hands of Republicans 13-7. A 14-seat majority would put the Republicans in an overwhelming position.
Huggins, who opted to join the minority last session, is reputed to be a fair-minded legislator. He’s also one of the most decorated veterans in Alaska. He earned a Silver Star and Bronze Star and the Vietnamese Cross of Gallantry in combat.
He might also be the only member of the Legislature who can do “lots” of proper one-armed pushups, and he apparently put to good use both arms in corralling a new leadership organization in the Senate, particularly as some in the majority will fight to get their issues, namely over abortion, addressed.
Abortion issue aborted already?
Depending on where lawmakers sit on the ideological spectrum, various lessons are being taken away from Tuesday night's election results. Some, like Matanuska Valley Sen. Mike Dunleavy, labeled a Tea Party Republican, see the message to be at least partially about social issues like abortion. Social issues have for years taken a backseat to another important state issues, oil taxes.
It’s unclear where Huggins stands on abortion. The anti-abortion group Alaska Right to Life didn’t endorse Huggins, and some members of the group have expressed reservations about his commitment to ending abortion in Alaska, said Matt Johnson, the organization's leader. Huggins has in the past been part of a majority that killed pro-life bills, Johnson said. But he added the view that he personally believes that “Charlie’s with us.”
When asked at the press conference Wednesday how much the chamber would focus on the issue, Huggins said that the goal of the coalition was about “representing all of the people of Alaska.” However, Eagle River Republican Sen. Fred Dyson has said in the past that he would refuse to be part of a majority that declined to address such issues.
Dyson is now part of the majority. Fairbanks Sen. John Coghill has also said that abortion would be on the top of his agenda.
Clover Simon of Planned Parenthood said Wendesday she was worried about the Senate's new structure and leadership. She said that if the new leadership engages in “extreme attacks” on women's health care.
"They're going to see in the next election that Alaskan women aren't interested in having politicians make their health care decisions,” she added.
Parnell pleased with outcome
While abortion appears as if it could now be moving back into Alaska politics in a very real way, others view the election outcome as a referendum on Alaska’s economy. They believe it shows voters want to give a big tax break to Exxon Mobil Corp., ConocoPhillips and BP, Alaska's major oil producers, and the new Senate intends to deliver.
Gov. Sean Parnell has proposed giving the companies up to $2 billion per year benefit in the hopes of increasing oil production.
Where exactly Dunleavy, and another new senator, Peter Micciche, R-Soldotna, will fit into that large piece of the mosaic of Alaska politics is unclear. Micciche, who works for ConocoPhillips, has taken a harder stance against the oil tax break than former Sen. Tom Wagoner, the Kenai Republican he unseated in the primary. And Dunleavy has not expressed a great desire to give the companies as big a break as Parnell has proposed.
Dunleavy has been called a Tea Partier, but no one should forget that it was former Alaska Gov. Sarah Palin -- possibly the biggest of Tea Party favorites on the national stage -- who pushed through the existing tax plan called Alaska's Clear and Equitable Share (ACES).
Alaska oil industry voters have backbone, too
Whatever the case, the oil industry is clearly in a better position in Alaska today than it was previously. What happens next is hard to say. Oil has had an interesting relationship with the coldest, darkest, northernmost state in the union. A former state Department of Natural Resources commissioner in the state capital of Juneau used to keep an Arab head-dress in his office and joke about Alaskans as the "blue-eyed Arabs in the north." There were some in state government in the 1970s who would have liked to nationalize the companies, if such a thing had been possible in the U.S.
Over the years that followed, oil companies spent tens of millions, possibly more, on image campaigns to try to convince Alaskans they were friends of the state. It worked to some degree until the Exxon Valdez hit a rock in Prince William Sound and smeared the coast with 11 million gallons of crude oil. The costly oil spill bailed Alaska out of a recession, but Exxon got no thanks. The oil companies were for years afterward the enemy.
The industry had appeared on a path back into Alaskans' good graces in the mid-2000s when Bill Allen, the head of an oilfield service company called VECO, tried to help them out by bribing state lawmakers to lower oil taxes. Allen thought that would provide the oil companies an incentive to build a natural gas pipeline to the lower 48 states. His company would have profited hugely from the construction. The FBI got wind of what was going on and started an investigation that put a few lawmakers in jail, put VECO out of business, and led to the rise of a Wasilla mayor named Sarah Palin.
Palin arrived in Juneau as a reformer with plans to clean up state government and stick it to the oil companies. She hit them hard and heavy when she and Alaska House Democrats pushed through ACES, the current oil tax regime, five years ago. ACES dug deep into the pockets of Exxon Mobil, BP and ConocoPhillips.
Because of Palin and the Democrats, the State of Alaska today sits on a $16-billion budget surplus, not counting the $42.3 billion sovereign wealth fund managed by the Alaska Permanent Fund Corp. The latter earns income to pay annual dividends to Alaskans as their share of the oil wealth.
Meanwhile, oil revenues -- royalties and taxes -- pay about 90 percent of the day-to-day costs of government in the state.
Big Oil, and its supporters, have legitimate reasons to feel they pay more than their fair share to support not only the government of Alaska, but also the people of Alaska. And there is a valid argument to be made that they have reduced oil production because of it. It's really simple economics given the way the tax system now works. The higher the price of oil on the global market, the more the state taxes under a scheme called "progressivity." This creates a situation wherein it is easy to see an executive reaching the decision that oil left in the ground is more valuable than oil sent down the pipeline, which is what Gov. Parnell believes is going on.
'I would not give away our oil'
On Tuesday night he called the prevailing oil-tax narrative "a fiction."
"I would not give away our oil," he said. "I would not do that."
Some analysts agree with him. They note that unless oil production is increased state tax revenue are doomed to fall anyway, and they warn revenues could fall low enough within five or 10 years that the state might end up asking the oil companies to name the size of the tax cut they need to get production back up just to support the costs of government. Parnell says that is what he is trying to avoid.
The election, he argued, merely "says that people want new representation, new ideas to work with, and a new group of people to work those ideas."
How well that will all work out remains to be seen.