NOTICE TO CANADIAN READERS (This applies to Americans as well): This may be one of the most important calls to action you will have heard this year.  The clock is ticking and the North American way of life is running out of time.  -dh

Brad Wall speaks during the Saskatchewan Party electoral victory at Palliser Pavilion in Swift Current, Saskatchewan, on Monday, April 4, 2016. THE CANADIAN PRESS/Michael BellCalgary Herald, by James Wood.  Saskatchewan Premier Brad Wall came to the heart of the oilpatch Wednesday to warn that the energy industry is under “existential threat” from environmental activists.  …  In a speech to the Explorers and Producers Association of Canada at the Petroleum Club, Wall slammed the idea of a national carbon tax and took aim at both the United States government for rejecting the Keystone XL pipeline and other Canadian provinces for throwing up obstacles to energy transportation projects.  …  Wall, whose Saskatchewan Party was recently re-elected for a third term, said the energy industry needs defenders against “an ever-growing matrix of activists,” citing proponents of the Leap Manifesto within the NDP and the divestment movement that calls for companies and public bodies to shed their energy holdings.


Please Refer To This Extremely Important Commentary By The Alaska Journal Of Commerce’s Andrew Jensen:
“Only in Alaska could a guaranteed $1,000 to every man, woman and child be considered a rip-off”


Special Alaska Legislative Report

While this is a report from a State Senator to her constituents, we believe it gives important insight to our readers behind the trade-offs contributing to resolving Alaska’s fiscal crisis.  -dh


Juneau Legislative Update
Senator Cathy Giessel 
June 8, 2016

 

Dear Friends and Neighbors,

Many folks have been contacting me in regard to my vote on SB 128

(Percent of Market Value or Protect the Dividend Act).

I want to set a few things straight. I have always been an advocate for no new taxes or tax increases on Alaskans. 

 
I voted my conscience to support SB 128 knowing that it would prevent further taxes from being levied on Alaskans.  SB 128 considers today’s Alaskans and tomorrow’s Alaskans.
SB 128 utilizes savings that were always intended to fund state government and still preserves a dividend payout for the future generations of Alaska. The passage of SB 128 requires that further spending reductions and budget cuts continue to be made in the future. That’s because SB 128 has a spending cap and the spending amount does not fill the full budget shortfall.
Instead of turning to citizens to foot the bill for government services, I remain committed to reducing the size and cost of state government.
Click here to view the above image in a larger format.
Senate Bill 128: Explained 
What is the purpose of the Permanent Fund?
The 1976 state law establishing the Permanent Fund (AS 37.13), states that the Fund was created:
  • to provide a means of conserving a portion of the state’s revenue from mineral resources to benefit all generations of Alaskans
  • to maintain safety of principal while maximizing total return
  • to be a savings device managed to allow maximum use of disposable income for purposes designated by law
SB 128 – Permanent Fund Restructuring
  • We restructured the Permanent Fund to:
    • Ensure the continuation of the annual dividend program
      • $1,000 first three years (this is the average dividend distribution)
      • Reduces volatility of the dividend by blending investment earnings with royalty payments to the state
    • Manage all savings account assets through the Permanent Fund Corporation to increase investment returns
    • Provide additional revenue to fund critical services, stay current on our bills, and meet our expenses
  • The effects of doing nothing (see chart below)
    • Savings accounts are depleted in five years
    • Declining permanent fund dividends, with dividend elimination within five years
    • Significant tax burden on Alaskans
    • Decline in critical state services
    • The stifling of private sector capital investment and jobs; effectively hurting our economy
    • Credit agency downgrade
      • Credit agencies downgraded Alaska earlier this year and have put us on negative watch and have said a plan must be in place to maintain our current credit rating
        • SOA credit rating affects the state and local communities and future borrowing (ie: gas-pipeline)

  • We have cut government – nearly $1 billion over two years
  • We have reformed Medicaid, criminal justice and tax credits
  • We will continue to make cuts, we will continue to find efficiencies and we will make reforms to change business as usual
  • We reduced the oil & gas cashable tax credits by hundreds of millions of dollars
  • It is our job to be good stewards of the people’s money
  • There are many proposals the Governor introduced for consideration:
    • Taxes on industry, individuals, reduce tax credits, restructure PF
  • We chose to pass the option that provides the most revenue, with the least negative impact on individuals, families and businesses.
  • Had we passed a POMV model a decade ago, we would have earned nearly $2 billion more for roads, schools, and public safety
  • In 2015 the state distributed $1.4 billion in dividend payments to Alaskans and approximately $350 million of those dollars were redirected outside of Alaska to the federal government in the form of federal taxes
  • As long as Alaskans are making payments to the federal government, we will leverage as many federal dollars as possible to benefit our state
  • Nothing is perfect – including this legislation – the legislature will review it in three years, which allows us to adjust when and where needed

Click here to view the complete Legislative Finance document on SB 128.

Current Oil and Gas Prices
Price needed to balance this year’s reduced budget – about $105-109 per barrel.
Crude Oil (WTI) $51.06 per barrel
Brent Crude (ICE) $52.32 per barrel
Natural Gas (NYMEX) $2.47
Japan LNG (JLNGIP) $7.00

Click here to view the current prices.

As always, it’s a pleasure to serve and represent the wonderful people of District N!

I look forward to hearing your ideas, suggestions, and comments.