Legislator proposes saving gas line revenues

Larry Persily

Petroleum News Juneau correspondent

The chairman of the legislative committee charged with helping to map out Alaska’s long-term financial future wants to amend the state constitution to put aside all royalty and production tax revenue from any North Slope natural gas development. Only the investment earnings on those funds would be available for spending.

Anchorage Rep. Mike Hawker introduced House Joint Resolution 37 on Feb. 16 to establish a Gas Revenue Endowment Fund as a separate account in the state treasury.

If approved by a two-thirds vote in both the House and Senate, and then by a majority of Alaskans, the new fund would grow with royalty and tax deposits. Annual withdrawals from the investment earnings, however, would be limited to no more than 5 percent of the fund’s average market value over a five-year period.

Hawker, a freshman Republican, said his intent is to convert Alaska’s non-renewable, natural gas resource wealth into a renewable account fueled by stock and bond investment earnings.

He acknowledged the state is operating at a deficit and could use the immediate revenue from a natural gas pipeline — if one is built — but he favors putting the cash off-limits and using only the investment earnings to stretch out the benefits to the state and its residents. Rather than grow dependent on the one-time infusion of tax and royalty money from a natural gas project, much as Alaskans did with the opening of the oil pipeline 27 years ago, the state would be better off thinking long term, Hawker said.

In the short term, the proposed constitutional amendment will have a lot of competition for lawmakers’ attention in the remaining 11 weeks of the legislative session, and passage is not expected.