Upbeat Walker Sees Legislative Budget Progress, North Slope Uptick, China Gas Deal
Gov. Bill Walker says he’s optimistic Alaska’s economy will begin to rebound in 2018. He says there's a good chance that lawmakers will pass measures this year that’ll set the state’s budget on the path to solvency. And he’s downright excited about three promising economic developments that suggest Alaska finally will be able to open more areas to resource extraction and bring those resources to market.
The governor says he’s confident the Legislature is finally ready to move beyond the impasse of the past three years and to vote for programs that’ll provide another means of paying for state government, instead of spending billions every year out of Permanent Fund earnings.
“I think that there’s an awareness that just sitting back doing nothing is just not going to solve the problem,” Walker said in an interview Friday.
Walker says based on his discussions with lawmakers he’s optimistic they’ll come up with legislation to generate revenue, perhaps through the payroll tax that he’s proposed or some other means that legislators will come up with.
“It may be in a form different than I have proposed,” he said, “and that’s fine. I don’t bang the podium and say ‘It’s got to be this or nothing.’ We just need additional revenue.”
And he’s downright certain that budget cuts will again be needed to hold down costs while lawmakers and administration officials work on ways to prime the state’s economic pump. But he says the end of the tough times is in sight.
“We’re getting to the point now that we’re starting to put back,” he said. “In other words, we’ve cut so far on some things that we’re having to put back in as a result of that. So that’s a sign of how far we have cut. In some areas, I think we cut too far.”
"We've cut so far on some things that we're having to put back in as a result of that. ... In some areas, I think we cut too far."<br>– Gov. Bill Walker
Walker says for example he added $34 million back in to the Department of Public Safety’s budget to help deal with a spike in crime in both cities and outlying communities. And he predicts in the coming years the state will be able to boost funding to municipalities that’s been slashed over the past three years since state revenues tumbled due to a free-fall in oil prices.
“There are some (who) say we are at the bottom. That we have reached that point. And I look at the activity that’s happening on the North Slope.”
The governor said in an interview with reporters from two Fairbanks media outlets that his upbeat assessment of the economy is largely based on recent announcements of increased oil exploration and development in Alaska’s oil patch.
“We’re having more activity from ConocoPhillips than we’ve had since 2005, as far as exploration,” he said. “I look at the interest in the North Slope, as far as on the (oil) lease sales – the highest we’ve had in over 20 years. And obviously the announcement on the 1002 has brought a lot of focus on Alaska.”
The “10-oh-two” refers to the 1.5-million-acre coastal plain of the Arctic National Wildlife Refuge, which Congress opened up to oil and gas exploration this year. Walker says that, and congressional and executive actions and authorize construction of a roadway in the Izembeck National Wildlife Refuge and to loosen the federal Roadless Rule in the Tongass National Forest all signal that the feds are giving Alaska a green light to access, explore and develop resources.
“We’ve never had the opportunity really to have access like we do now,” he said.
The governor says his optimism is further boosted by federal support for a deal with China to build a pipeline to move North Slope natural gas to an export facility on the Kenai Peninsula.
“I try to contain my enthusiasm on that, quite honestly, because I don’t want to overplay and say ‘All our problems are resolved.’ They’re not. But, boy, what an incredible landscape we have ahead of us!”
Walker flew to Fairbanks Friday to meet with municipal leaders and others before returning to Juneau, where he’ll try to share his upbeat assessment with a decidedly less-enthusiastic Legislature.