Wednesday Shout Out: KILL THE GOOSE!

A quick shout about current events and random thoughts...

Kill the Golden Goose, scramble the eggs

At a time when Alaska's unemployment rate is at an eighteen year high. The industry that generates ninety cents out of every dollar state government spends is shedding jobs faster then water off a Mallards back. And Alaskan oil & gas companies are continuing to shift investments to more tax friendy locales, the legislature is apparently going to take a pass.

A bill that would have re-worked the Palin/Parnell ACES plan and hopefully would have stimulated exploration through tax credits, is all but dead after Republican Paul Seaton of Homer and all of the committee Democrats voted to keep the bill in commmittee by a 5-4 tally.

If I were to relate this outcome to a Hollywood classic, just image you're Micheal Corleone coming out of the bathroom, three bullets, drop the gun, walk out calmly. That's basically what they did to the bill's sponsor who just happens to be the committee co-chair.

We regret to infrom you of the death of Rep. Craig Johnson's HB308. No witnesses saw nothing. I said they saw nothing.

So a bill that would have provided tax credits to boost Alaska's economic engine is killed in the committee of first referral.

Why? Politics.   

Some believe that if Republicans don't keep the three rural Democrats within the Republican caucus next year, their majority will be thinner than the ice on the Nenana River in mid May.      

So in order to keep the three rural (and coastal) Democrats, there is hardball being played to pass legislation to rework the state's Coastal Zone Management program. Paul Seaton, the Republican who rolled his own co-chair to kill the tax credit bill, comes from Homer and is a co-sponsor of the legislation.

The Coastal Zone Management program was moved under the Department of Natural Resources during the Murkowski term to be more efficient. Critics have said local control has been lost and supporters say it gives more certainty in the permitting process.

HB74 would take the authority out of DNR and gives a say back to the coastal communities. The push is due to the rush to develop oil and gas field near key harvesting grounds for both subsistence and commerical fisheries.

Opponents of HB74 say the legislation would grant too much power to communities in deciding state development issues from far off shore to far inland.

So the need to cater to the three rural Democrats along with a handful of Republicans who come from coastal communities is effectively holding the economy hostage.

Meanwhile, opponents of the legislation have become one laugh track after another.

There is record employment!

There is record investment! 

But these people are wrong.

According to committee testimony by Paul Laird, General Manager of the Allliance, "Maintenance and repair, inflation and development projects that already were commissioned before ACES accounted for the employment bubble in the oil & gas support sector over the past years. It occurred not because of ACES, but in spite of it."

And today, the state's own Department of Labor says Laird is right and the bubble is bursting.

According to the DOL numbers, 1,500 jobs were lost in Alaska's oil & gas industry in 2009, and economist have predicted that this year will be worst as the work load will be lighter. Even BP announced they were slashing 15% from their capex budget in 2010.

The warning for the future is right in front of us in the form of the employment bubble that is bursting as we speak. 

Tax credits take time to work through the corporate structure and projects are planned out years in advance.

The longer the legislature waits to enact competetive tax terms, the longer those projects sit on the drawing board and oil field workers stay home.

With un-employment at an eighteen year high, you'd think there would be more lawmakers concerned about Alaska's economy.

Even the governor, who has proposed his own tax credits, was so outraged by the lack of urgency to reduce the very taxes he proudly supported raising two years ago, fired off an angry email to a reporter.

Yeah...an email.

"The legislators need to return their focus to Alaskan jobs now. There is no reason these ideas should wait until next year. Alaska families need this work!” Gov. Parnell wrote to Sean Cockerham at the Anchorage Daily News.

The governor's response reminds of the scene in the movie Titanic when a dying DiCaprio threatens to write a strongly worded letter to the cruise lines.

The number of government employees has increased by a thousand positions since ACES was passed in 2007.

And yet not enough lawmakers realize that many of those paychecks come from a golden goose they are slowly strangling.