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CLARION
Showers 38/29 More weather on Page A-2
P E N I N S U L A
TUESDAY, JANUARY 21, 2014 Soldotna-Kenai, Alaska
Vol. 44, Issue 95
50 cents newsstands daily/$1.00 Sunday
City to look at SAD code
Question Which team do you think will win the Super Bowl? n The Denver Broncos n The Seattle Seahawks To place your vote and comment, visit our Web site at www. peninsulaclarion. com. Results and selected comments will be posted each Tuesday in the Clarion, and a new question will be asked. Suggested questions may be submitted online or e-mailed to news@peninsulaclarion.com.
Soldotna council considers changes By KAYLEE OSOWSKI Peninsula Clarion
In the news Body of Anchorage man recovered from Seward harbor
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ANCHORAGE (AP) — The body of a 51-year-old Anchorage man has been recovered from the Seward small boat harbor, and a search for his companion continues. KTUU says the body of Patrick Richard was found Saturday morning after divers were alerted that a man’s body was floating in the harbor. Police Chief Tom Clemons says Richard’s body was found completely submerged in the water near a boat he was staying on. Richard and the unidentified companion were visiting Seward, and were reported overdue for a charter bus back to Anchorage Saturday morning. Police were alerted by a friend who went to the boat searching for Richard and found the body. Clemons says it’s not clear whether drugs, alcohol or foul play were factors in Richard’s death.
Inside ‘It is hoped that a thoughtful, global, creative approach to budget challenges will result in the utilization and maintenance of the resources and facilities with which we have been blest.’ ... See page A-4
Index Opinion.................. A-4 Nation/World.......... A-5 Sports.....................A-6 Classifieds............. A-9 Comics................. A-12 Pet Tails............... A-13
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nies pursuing the liquefied natural gas pipeline project — BP, ConocoPhillips and ExxonMobil Corp. — all lobbied for the tax change. Pruitt said he wants people to recognize “we don’t get gas unless we have oil.” For the companies, the money is in oil, and without a “positive” oil tax structure, the likelihood for them making significant investments in gas is limited, he said. Pruitt said he considers the Legislature taking up tax and royalty terms related to the gas line project something they must do this
Soldotna council member Keith Baxter is introducing an ordinance on the council’s Wednesday consent agenda to amend a section of Soldotna’s code concerning special assessment district projects. The section of the code proposed to be amended deals with the weight of consideration given to property owner objections to SAD projects — projects in which affected property owners pay a portion of the costs. According to the original code 3.18.100 section D, “if written objections are filed by the owners of parcels bearing one-half or more of the estimated cost of the improvement, the city council may not proceed with the improvement.” If the council is able to pass the special assessment district with a three-fourths majority vote or is able to revise the district so that the property owners objecting to the project are responsible for less than 50 percent of the district, then the council may move forward in the process, according to the code. With districts in which the city is funding 75 percent of
See AGENDA, page A-8
See CITY, page A-8
Photo by Dan Balmer/Peninsunla Clarion
Thinning ice
Two blocks of ice placed in front of Sweeney’s in Soldotna slowly melt as the sun shines down Monday. Above average temperatures for Jan. 20 reached up to 45 degrees in Soldotna. Store owner Mike Sweeney said ice sculptor Scott Hanson would not be able to work on the sculpture until the temperatures dropped near freezing. Sweeney said the sculptures will be a leprechaun and penguin. The National Weather Service calls for partly cloudy skies with a chance of rain for Tuesday in Soldotna with temperatures highs in the mid 30s. The forecast remains the same for Kenai the next few days with a chance of snow showers mixed with rain.
Spending, oil and gas on agenda By BECKY BOHRER Associated Press
JUNEAU — State spending, education funding and plans for advancing a major gas line project are among the big issues facing lawmakers when they return to Juneau for the new session. When the Legislature reconvenes Tuesday, it will be the first time in several years that oil taxes aren’t on the docket. The issue, however, figures to loom large in discussions about state spending and the gas line project.
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Voters in August will be asked to decide whether to repeal the oil tax cut passed last year. Critics fear the crash in unrestricted general fund revenue forecast for this year and next is the tip of the iceberg if the new tax stands. Supporters argue the state is better protected at current prices under the tax change, which they also say is helping to spur investment.
The Department of Revenue has cited several factors for the revenue decline, including lower-than-expected oil prices, declining production, residual effects of the outgoing tax system, such as a closeout of credits, and higher-than-expected deductible lease expenditures. Provisions of the new tax kicked in Jan. 1. House Majority Leader Lance Pruitt, R-Anchorage, said he doesn’t believe the state will get a gas line if it reverts to the old tax system, which would happen if the referendum were successful. Oil and gas compa-
Senator speaks out against Pebble Mine By BECKY BOHRER Associated Press
JUNEAU — U.S. Sen. Mark Begich has come out against the proposed Pebble Mine, calling the massive gold-and-copper project “the wrong mine in the wrong place for Alaska.” In a statement released by his office Monday, Begich said he has long supported Alaska’s mining industry and believes continued efforts must be made to support resource-development industries that help keep Alaska’s economy strong. But
he said “years of scientific study (have) proven the proposed Pebble Mine cannot be developed safely in the Bristol Bay watershed.” “Thousands of Alaskans have weighed in on this issue, and I have listened to their concerns,” he said. “Pebble is not worth the risk.” In 2011, the U.S. Environmental Protection Agency initiated a review of large-scale mining in the Bristol Bay region in response to concerns about the impact of the proposed Pebble Mine on fisheries.
‘Thousands of Alaskans have weighed in on this issue, and I have listened to their concerns. Pebble is not worth the risk.’ — U.S. Sen. Mark Begich The agency released its final report last week, concluding that large-scale mining in the Bristol Bay watershed posed significant risks to salmon and Alaska Native cultures that rely on it. The region is home to a world-premier sockeye salmon
fishery. The report did not recommend any policy or regulatory decisions. But EPA regional administrator Dennis McLerran said it would serve as the scientific foundation for the agency’s response to the tribes
and others who petitioned EPA to use its authority under the Clean Water Act to protect Bristol Bay. Mine opponents have been pressing the agency to take steps to block or limit the project. Begich, a Democrat, is the only member of the state’s congressional delegation to outright oppose the project, and his position, first reported by the Anchorage Daily News, won praise from Pebble critics on Monday. Sen. Lisa Murkowski and See PEBBLE, page A-8
Budget analysis lays out weighty deficit impacts By BECKY BOHRER Associated Press
JUNEAU — Fall-back options, such as large cuts in capital budgets, imposing state sales or income taxes or cutting Permanent Fund dividends, may not eliminate future deficits, according to a newly released analysis by the Legislative Finance Division. The division, in an overview of Gov. Sean Parnell’s budget plan, says current spending levels are unsustainable without additional revenue, and simply constraining spending growth is insufficient.
Without reserves, the report says the budget would have to be reduced by $2.5 billion annually for the state to live within its means. The report made assumptions based on the fall revenue forecast, including no growth in agency and statewide operations after next year and capital budgets set at $800 million in unrestricted general funds annually. It says state reserves would last until fiscal year 2024 if the forecast and assumptions held. Legislative Finance Director David Teal said there would be a comparable outcome whether
the state stayed on its current schedule for paying on its unfunded pension liability or went with the governor’s proposal to move $3 billion from savings toward paying down the obligation. “In just a few short years, the bottom-line fiscal question facing Alaska legislators has changed from ‘How much can we save this year?’ to ‘How large is the deficit?’ “ the report states. Alaska relies heavily on oil revenues to fund state government, but production has long been on a downward trend. Higher prices in recent years C
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helped to fatten state coffers and mask the fiscal impact of the decline. The Legislature last year passed an oil tax cut in the hopes it would lead to more production. That tax cut will be the subject of a referendum that voters will decide in August. Parnell has said the state is on strong financial footing and will exercise spending restraint and use savings to get by while oil prices are lower. Parnell’s budget office, in laying out various scenarios of its own, showed funds in the statutory and constitutional budget reserve funds could be gone by fiscal year 2022 — or the state
could still have billions saved up by 2024, depending on factors like oil prices, production and spending. According to the Legislative Finance report, the statutory budget reserve fund, which is the easier of the two funds for lawmakers to access, is projected to close out the current year at about $2.8 billion. That is after a projected draw of about $1.9 billion for this year’s budget to account for lower-thanexpected revenue. There is projected to be about $12.2 billion in the constitutional budget reserve at the See BUDGET, page A-8