|
Murkowski budget plan seeks lease sale funding Proposal includes $1.5 million to prepare, promote state lease sales Larry Persily Petroleum News Juneau Correspondent
Alaska Gov. Frank Murkowski is asking the Legislature for almost $1.5 million next year for additional personnel, consultants and travel to prepare and promote state oil and gas leases as part of his plan to boost state revenues.
The governor announced the funding request when he released his proposed Fiscal Year 2005 budget Dec. 15. The Legislature will start work on the budget when it convenes Jan. 12.
The $1.5 million would go to the Division of Oil and Gas at the Department of Natural Resources, with almost half of the money to help meet the governor’s call for an Alaska Peninsula and Bristol Bay oil and gas lease sale in 2005.
“Much promotional work and data gathering need to take place in a very short time,” the department stated in its budget request. “The division must virtually start from scratch in its (best interest) finding process, gathering baseline information.”
The state has not held a lease sale in 20 years in the Bristol Bay area, about 350 miles southwest of Anchorage, and no commercial oil or gas production has ever occurred in the area.
“It is difficult at this time to estimate how much revenue the state will receive from a Bristol Bay lease sale,” the department said. Budget includes 13 new positions The governor’s funding request includes $1.13 million in annual operating funds for 13 new full-time positions, including a petroleum geologist and two cartographers to work on the Bristol Bay lease sale.
Murkowski also wants legislators to appropriate $340,000 in one-time capital budget funding for the division for a third cartographer, geologic field work, surveys and public outreach efforts in the Bristol Bay area.
“A lease sale in this region will be controversial, so it will be important to educate the populace on the steps leading up to a sale and the permitting process afterward,” the department stated in its budget request, referring to the expected debate over oil and gas drilling in the rich fishing area. New staff to work on governor’s priorities The rest of the new employees would work on other initiatives promoted by the governor, including shallow gas permitting and fiscal analysis of North Slope natural gas pipeline proposals. The list also includes oil pipeline tariff analysis and North Slope facility sharing issues that Murkowski has said are important to attracting independent explorers to the state.
The budget also includes $4.1 million for the Alaska Oil and Gas Conservation Commission, a $130,000 drop from this year’s budget. The commission will lose a petroleum inspector, a clerk and a natural resource manager, bringing down its full-time staff to 24 people.
The commission said it can handle the work with fewer staff members as it nears completion of its online permit process.
Another oil and gas-related item in the proposed budget is $150,000 for the Alaska Natural Gas Development Authority, the same amount lawmakers appropriated for the authority’s first year of operations this fiscal year. Administration officials said the $150,000 for next year is a “placeholder,” pending further discussions.
The authority, which was created by voters last year with the job of building a natural gas pipeline to Valdez, is already pushing for a $2 million supplemental appropriation in this year’s budget and says it may need up to $200 million more next year to start designing the project. Budget includes new taxes The governor’s proposed budget includes no changes in state oil and gas taxes but does include:
• Doubling the tax on charitable organization pull-tab proceeds; a $2 million increase.
• Doubling the cigarette tax to $2 a pack and a one-third increase in the tax on all other tobacco products; $30 million a year in additional revenue.
• A 5 percent tax on hotel and bed-and-breakfast rooms, along with a $5-per-night-per-passenger cruise ship tax; $32 million in new revenue.
• A $1-per-passenger-per-day cruise ship gambling tax; $3 million a year. The large, foreign-flagged vessels operate their casinos while cruising through Alaska, though not while the ships are in port.
• A 5 percent statewide tax on tour-guide operations, including bus tours, walking tours, horse-drawn carriage rides, snowmachine rides and charter boat trips; $5 million. Bonds would help close budget gap In addition to the new taxes, the governor proposed using the Alaska Housing Finance Corp. and the Alaska Student Loan Corp. to help reduce the state’s budget gap, estimated in Murkowski’s Fiscal 2005 budget at $400 million.
The governor proposed that the state sell some of its buildings to AHFC for $40 million, which the corporation would raise by issuing bonds. The state would then lease back the properties from AHFC, making lease payments for as long as it took to repay the bond issue. It’s similar to homeowner refinancing their mortgage to take out cash and then repaying the new, higher mortgage balance in future years.
The student loan corporation would issue $75 million in bonds and give the money to the state as a one-time bump to help close the budget gap. The corporation would repay the bonds with proceeds from student loans not committed to previous bond issues. However, those future loan proceeds could otherwise go to the state in the form of the corporation’s annual dividend if they are not pledged to the bond issue.
| 