Associated Press 

Lawmakers grapple with deficits and voter mandates

Gasline, marijuana and energy tax credits expected to dominate legislature


Valdez Star photo

Gov. Bill Walker says Alaska must financially tighten its belt.

The Alaska Legislature begins its first full week of work Monday after an intense start to the new session.

The state has a new governor, Bill Walker. And his State of the State and State of the Budget speeches were highly anticipated by those hoping to get a better sense for the direction he plans to take the state.

While the first speech was brimming with hopefulness, the second, devoted to confronting the state's multibillion-dollar budget deficit, laid out a tougher message: State government will need to downsize, and it's going to hurt.

Falling oil prices have exacerbated the deficit. It is anyone's guess how low prices will go or how long they'll stay low. The North Slope oil price in recent days was about $47 a barrel. It was around $107 when lawmakers ended their last session in late April.

The budget is the main priority at the Capitol, with more details on Walker's spending plan - and the effect on departments - expected to emerge.

Here are three more things to watch for this week:

GAS PIPELINE: The major liquefied natural gas project that the state is pursuing with BP, Exxon Mobil Corp., ConocoPhillips, TransCanada Corp. and the Alaska Gasline Development Corp. remains, in the view of many at the Capitol, as Alaska's best hope for a significant new revenue stream. While there is no pending legislation dealing with the project so far this session, lawmakers are scheduled to receive updates this week on the project's status.

As a candidate, Walker raised questions about the how the project was structured. That has made some lawmakers, who last year approved a framework for the state's participation in the project, nervous about Walker's plans now that he is governor.

Walker said he has no intention of starting over. "I will take the good work that they have done and I will continue it," he told reporters Friday.

Deputy Natural Resources Commissioner Marty Rutherford said the administration is "totally committed to moving this project forward."

Alaskans have talked for many years about a gas line as a way to provide energy to residents, create jobs and to shore up revenues in an oil-dependent state. There have been lots of fits and starts.

The mega-project now being pursued, which as envisioned would be capable of overseas exports, got its start after another proposed effort, a gas line to serve North America markets, faltered amid a gas glut.

The current project is in a phase of preliminary engineering and design. There have been no final decisions on whether to build yet.

Natural Resources Commissioner Mark Myers said the goal is to get a gas line on terms that are acceptable to Alaskans. While there is a sense of urgency with the project, it's important to get it right, Myers said. It's important that negotiations are successful for all parties, he said.

"The governor's impatient for it to happen. But he knows it has to happen in a way that maximizes the benefit for Alaskans, that's his other criteria," he said.

MARIJUANA: Three committees - the Senate and House Judiciary committees and Senate State Affairs - plan hearings this week on the legalization of recreational marijuana use in Alaska. Voters in November approved legalizing the recreational pot use by those 21 and older, and lawmakers are looking at updating criminal laws and otherwise playing a role in how legalization is implemented. Hearings this week start on Monday.

OIL AND GAS TAX CREDITS: The Senate and House Finance committees are set to get separate updates on the credit issue Tuesday. Walker, in an opinion piece earlier this month, said the state is expected to pay more in oil and gas production credits this year and next than it brings in in production taxes. He has not proposed any legislative changes.


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