As the Alaska Legislature prepares to gavel into session on Jan. 17, KCAW and other CoastAlaska public radio stations are conducting interviews with local lawmakers about their priorities and goals. KCAW spoke with state Sen. Bert Stedman, R-Sitka. For reports on other legislators, from other stations, look under the Southeast news section.
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State Sen. Bert Stedman says the upcoming legislative session is “going to be very busy.”
“There will be a lot of smoke going up the chimney of the train on the track, but I don’t think there’s going to be a lot of forward movement.”
Stedman says because of redistricting, almost the whole legislature is running for election this year, which could be reflected in this year’s session.
“You’re going to have all kinds of legislation flying around that’s vote-for-me legislation,” he said. “And hopefully we’re going to weed through that stuff and just concentrate on what’s good policy for the state, and leave a lot of that electioneering stuff behind in the trash can, and let the voters sort that out next fall.”
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Stedman says in his view, good policy for the state includes making sure that Alaska’s finances stay strong. Even though the state operates a budget surplus, Stedman says it would be a mistake to spend freely.
“It’s a ludicrous argument to say the state has enough cash, therefore we should give it back or spend it willy-nilly,” he said. “We have an extremely valuable asset in our state – our hydrocarbon base in the Arctic. And it’s a finite resource. We need to make sure when we monetize that, we put a substantial portion of that away for future use of the Alaskans coming after us.”
Stedman says a failed proposal to cut oil taxes will come up for discussion again this year, and will be, in his words, “full of misinformation.” He says the idea that oil companies will leave Alaska is “laughable.” He said the Senate objected to Gov. Sean Parnell’s proposal to lower the taxes because it needed more information, and that data supplied by the state didn’t paint a complete picture of the situation.
Stedman says at $100 a barrel, Alaska’s available oil is worth about $21 billion. The state takes about 12.5 percent off the top, and he says there’s about $6 billion in costs. That leaves, Stedman says, about $14 billion.
“And the discussion will be, at what price of oil, if it’s $60 oil, $100 oil, $150 oil, who gets what portion of that $14 billion,” he said. “If oil prices go up – say they go up to $120 a barrel – you’d be at $25 billion in value, and you’d have $18 or so billion to cut up instead of $14. So in that scenario, how does that extra $4 billion get split? We’re just arguing over who gets what portion of the apple pie, and when we have a little cream on top, who gets the cream.”
Kind of like figuring out where on the pie one should insert the knife.
“That’s right,” Stedman said. “So in a nutshell, that’s what we’re dealing with. A lot of money.”
As co-chair of the Senate Finance Committee, Stedman will be front-and-center in that statewide conversation. But in his home district, Stedman is known as the go-to guy for the state’s capital budget, which means millions in funding for projects across Alaska.
Big priorities this year in his hometown of Sitka include getting money for additional diesel generators to make electricity, along with funding for mandatory water improvement projects. Stedman also says the state needs to put some more money behind the Alaska class ferry.
“We need to start funding for the next one, because we’re hopefully going to build two or three of these vessels in Ketchikan, in our state-owned shipyard,” he said. “So that’s an important discussion to have. Hopefully the coastal communities will come together and push for the funding of that, a little more than they have in the past.”
The state already has allocated about $120 million for one of the new ships. Other concerns include securing some money for a proposed hydro project at Takatz Lake, which Stedman says will be crucial to relieving Sitka’s mounting energy crisis.
The capital budget is for one-time projects.
“We can turn that on and off like a faucet,” Stedman said. “If we want to stimulate the economy, we can put capital projects on the street, we can catch up on deferred maintenance, build new state buildings, build some roads, build more infrastructure. The operating budget, you have to feed that every year regardless.”
And it’s the operating budget, Stedman says, where the need for fiscal prudence will be felt. Still, he thinks the Senate will give a warm reception to some proposed increases in funding, especially to education.
“I would expect that the Senate will take a favorable view of some incremental increase,” he said. “I would expect the House and the governor to be less favorable, and we’ll come up with a compromise in the end.”
For now, though, Stedman and lawmakers across the state are focused on the beginning. The Alaska Legislature gavels into session on Jan. 17.