Saturday, September 16, 2006

Answers to KTUU questionnaire

1) Ethics has become a key issue in this campaign. In the Murkowski administration, Attorney General Gregg Renkes resigned because of criticism that he pushed a trade deal in which he had a stock interest. Legislators spoke of establishing a "clear bright line" on investments by state employees that would prevent them from taking official action without divestiture -- e.g., $10,000 or 1 percent of a company's value -- although ultimately nothing was done. Exactly where would you draw the line? Please use numbers.

The “clear bright line” is simple: if you have an investment.

2) The public pension system liabilities continue to grow, despite rhetoric during the 2005 legislative session that PERS and TRS reform would "stop the bleeding." How would you recommend the Legislature pay for the $6.9 billion liability? Please be specific.

There is a huge problem with education dollars making its way into the classroom. The FY 2006-2007 budget for schools in House District 25 shows that less than 50% of the monies earmarked for the schools makes its way into the classroom. The costs include the teachers salaries, PERS/TRS, heating, lighting, phone service, custodians, etc.

Less than 50% of the budget being used in the classroom? The question has to be asked of people like Jake Metcalfe who sits on the school board, ”where is the rest of the money going” and justify the cost differential in the budget.

More of the budget must find its way into the classroom instead of the central administration. An example of inefficiency in the ASD is in the services provided to special education students.

The school district is spending over 19 million dollars to provide 1.5 to 2 million dollars in services as is proven by the ASD's numbers on Medicaid reimbursements. These services alone can be done by outside agencies and save the district millions of dollars.

I would seek to enact legislation that would use a POMV for education, but under the plan that the budgetary process is incorporated in each school and the parents/teachers/principal of each school create the budget. A partnership develops between the parents/teachers and principal. This is being done in Edmonton and the Province of Alberta pays 90-94% of the budget. Result is local residential property taxes in Edmonton are at a mill rate of 9.

The establishment of the POMV to be used for education will then allow the State of Alaska to start paying back the liability.

3) Gov. Murkowski's gas line deal was founded on the state taking its royalty and production tax in-kind and then marketing the gas, a 20 percent equity position in the pipeline itself, a 30-year lock-in of oil taxes and a 45-year lock-in of gas taxes and constraints on the state's ability to litigate or regulate. Please explain which of these fundamental elements of the failed deal, if any, are worth preserving.

The 20 percent equity investment is a good idea. I do not believe it should be done in a manner where the State of Alaska actually owns the pipeline. I favor a partnership as one like between companies like Shell oil and Sempra on the Baja re-gasification terminal.

Sempra owns the terminal, but both invested equally in it. Shell has rights to half of the terminal's capacity and half of any future expansion. I favor an approach in that the State of Alaska would retain a percentage of the gas to sell on the market or a percentage of the profits that is equal to the investment.

The ownership will also give weight to an Alaska hire provision. Without it, the Hicklin vs. Orbeck case will carry weight in striking down any Alaska hire provision.

The oil companies need certainty. I like the idea of an opener but up front; a 20 year 30 year agreement with the opener and the State of Alaska having to prove its best interest to require the opener. It should be clearly defined and understood by all parties.

4) How would you deal with the natural gas reserves tax, if it passes on the November ballot, in attempting to carry forward with negotiations on a gas line? In your answer, please deal directly with the constitutional prohibition against repealing an initiative within two years of its enactment.

If the gas reserves tax passes, there will be litigation and the litigation could go on for years. The Valdez oil spill can be used as an example of how long the litigation could take.

Once in litigation, the constitutional prohibition becomes vulnerable to a court decision. If the court rules in favor of the oil companies, the prohibition is no longer an issue.

5) The Legislature has approved a petroleum profits tax of 22.5 percent, with a progressive element to bring in a higher percentage at windfall oil prices. Are you interested in revisiting that tax in 2007? If so, please indicate whether your concern is with the rate, the methodology (e.g., net vs. gross) or some other part of the legislation.

I support a production tax. I would like to address the comments made by Daniel Johnston, the Legislature's consultant. In an article in the Fairbanks Daily-News Miner, he made the comment that Great Britain had increased their taxes by 10% and it did not have an impact on production.

This is patently false. Production in the U.K. has been in decline for years and is a result in part by the higher taxes. The same can be said here in Alaska. Governor Knowles had to cut a deal with the producers to get Northstar on-line. Overall, production has decreased. However, in places like Alberta, taxes have decreased and this year, Alberta has a budget surplus of 9.5 billion dollars from increased production.

The rate needs to be revisited as well as the PPT versus the production tax.

6) Gang violence has become of increasing concern in Anchorage. This summer, the Legislature approved and the governor signed a bill allowing temporary detention of material witnesses. What more can be done to combat gang violence without infringing upon civil liberties?

In 1998 I answered a question to repeat felons getting paroled. They should not. Back then, it was a problem and has gotten worse. Another program would be to use the Military Youth Academy for truants and those who are headed in the direction.

7) The Supreme Court has ruled that public employers must offer health benefits to same sex partners of their employees. Critics say this goes against a 1998 initiative on the definition of marriage. Supporters of the ruling say it's a matter of equal protection. Do you accept this ruling of the court, and if not, would you support a constitutional amendment to overturn it?

In 1998, I opposed the amendment. I felt if you deny a person a right, you should do it through statutory law. Three court decisions on same sex marriage have validated my argument and position. The decision from the federal court in Nebraska on the subject came after the ruling from the Alaska Supreme Court and in effect their ruling needs to be revisited.

Moreover, one couple had married in British Columbia, but the Alaska Supreme Court never recognized that issue as it should have. Since the federal decision, the Alaska Supreme Court's decision rests on very shaky ground.

I would do a rewrite of the law with the federal decision from Nebraska as the basis of the law. Legislators and Judges are bound by the United States Constitution to follow the federal constitution.

8) Would you support legislation requiring lawmakers to disclose, in detail, the nature of work they do when working as consultants? Would you support a ban on lawmakers accepting new consulting contracts after their election to the Legislature?

Yes, if the consulting contracts are intertwined with legislation.

9) Should the State continue the road and bridge projects initiated by the Murkowski administration? Specifically do you support the $45 million Juneau Access Project, the $330 million Ketchikan Bridge Project and the $600 million to $1.5 billion Knik Arm crossing. If so, how will they be funded?

I support the Knik Arm crossing. It depends on the oil markets and tax structure. We may see a continued decline in production here in Alaska. As such, we will not have the money. So it won't be built. If things are reversed and money is coming into the coffers, then it can be built. I don't think we can depend on the federal government to fund it....

And if the bridge isn't built, then we will not be able to meet the demands of a gas pipeline, we will no longer have a growing tax base for local property taxes, new housing construction will decline so you will see a decrease in trade jobs. The negative impact will be great.

10) In the event of lower oil prices and the absence of natural gas revenue, will you develop a long range fiscal plan within the next two years? Assume a budget deficit of $300 million. What elements will be part of your plan? Be specific about what tools you will use to raise revenue. Be specific on what programs will be cut should you decide not to raise revenue.

As I stated above on the question for PERS and TRS. A POMV for education. And done under the budgetary process as I stated.

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