Alaska Dispatch: Wrestling with the feds

Alaska's relationship with the federal government has been a rocky one since statehood 50 years ago -- the remote state needs federal money, which has grown to a third of the economy, but an independent populace also wants the feds to back off when it comes to rules.

Addressing the state Legislature in Juneau on Thursday, Republican U.S. Sen. Lisa Murkowski spoke of the long-standing tug-of-war for money, on one hand, and for state sovereignty, on the other.

"Alaska has been a sovereign state for 50 years, yet the federal government continues to exert an often oppressive level of influence over our economic choices," Murkowski told state lawmakers during a speech on Thursday in Juneau.

Federal rules restrict resource development and land use in Alaska, while "so-called public interest litigation groups" see Alaska as "fertile ground to push the edges of environmental advocacy, perhaps without regard to the Alaskans who may be hurt by the outcome," she said.

Without federal spending and jobs, Alaska may have foundered in its bid for statehood. But the federal interests grew, now providing one leg of the "three-legged stool" that's often used to describe the state's economy.

Scott Goldsmith, an economist with the Institute of Social and Economic Research in Anchorage, has studied the significant impact of federal spending in Alaska. That spending increased with U.S. Sen. Ted Stevens' rise to power -- he became chairman of the Senate's Appropriation Committee in 1998 -- but Goldsmith is now predicting declines.

In a 2008 paper on Alaska's vulnerability to reduced federal spending, Goldsmith pegs the feds as responsible for about a third of all jobs and personal income in Alaska. Spending has always been fairly high, per capita, but shot up with Stevens' ascension. Federal spending in Alaska grew 118 percent -- or $5 billion -- between 1995 and 2000, Goldsmith found.

But that spending was nearly unchanged through 2006, and has slowed since. Some lawmakers -- Republicans, for the most part -- are left wondering: How can the state fend for itself financially, when the federal government seems to be ever-intrusive in personal lives, resource development permits, and even highway rules?

And just as importantly, what can Alaska really do about it, aside from speeches and press releases blasting federal decisions and demanding recourse?

Those are sound bites and little more, Rep. Les Gara, D-Anchorage, said.

"Nobody wants the federal government to tread on us, but it's just a fake way to get an easy vote for state politicians to do bills and do speeches about how much they dislike the federal government," he said. "They can't do anything about it."

No longer number one

Alaska may be proud to slip from the notorious top spot among states receiving federal earmarks, but it could hit the state's pocketbook hard. Earlier this month, Taxpayers for Common Sense dropped Alaska from first to sixth, with $139.77 in earmarks per capita. Hawaii is now tops, with $318.26 per capita.

To put it in other terms, Alaska enjoyed 80 earmarks totaling $97.6 million for fiscal year 2010, down more than half from a whopping $227.8 million received in the previous fiscal year.

The watchdog group said the lapse was predictable after Stevens narrowly lost a re-election bid to now-Sen. Mark Begich, a Democrat. Shortly before the 2008 race, Stevens was convicted of accepting bribes, although the charge was later dropped and his conviction vacated due to allegations of prosecutorial misconduct.

Murkowski, who has a seat on the Appropriations Committee, said the shift in senators isn't the only reason Alaska is seeing less pork

"As the chairman of appropriations, (Stevens) was clearly in a position to make many things come our way ... but it's not just with the loss of Sen. Stevens," she said. "It is a very dramatically different environment in Washington, D.C. when it comes to earmarks."

She referenced President Barack Obama's campaign pledge -- which echoed that of senators and representatives from other states -- to end the long-standing practice of "pork-barrel" spending, which has long provided fodder for talking heads and political crusaders.

But Murkoswki, charged with speaking for a state with unique needs, said she has a slightly different take.

"At the federal level, we must do more to contain our spending," she acknowledged. "We have got to work to reduce that pie ... but once that pie is determined, I'm going to do my darndest to make sure that Alaska gets its fair share of that pie."

Pinching the federal flow

The downturn in federal dollars isn't only related to earmarks. Alaska's share of more routine federal spending is also on the decline, with the once-wide-open flow being slowly cinched.

Take money for highways, for example. Federal transportation funding hasn't slipped in dollars, but the future is cloudy, said Frank Richards, deputy commissioner of transportation.

Federal transportation funding in the pipe, but not yet decided by Congress, isn't looking particularly good for Alaska. Significant funds could be directed soon to urban areas with more than 500,000 people. Less could go to highways, but more to public transportation, for instance.

"That means we are cut out, right off the top," Richards said. "The bill also shifted funding focus to other modes of transportation -- rail, for instance. So you're taking revenues that are coming in from drivers of the highway system, through the federal fuel taxes, and shifting them to other modes of transportation."

State agencies like the Department of Transportation and Public facilities make annual treks to the Capitol's fifth floor, making their cases for more money to the House Finance Committee. This year, every agency has expressed concern about the future of federal funding, committee chairman Rep. Mike Hawker, R-Anchorage, said.

"There is a universal realization that what Ted Stevens was telling us is true," Hawker said. "And that is the significant decline in federal funding."

The anticipated declines are for program funding, not earmarks. They're talking highways and law enforcement grants, money for fisheries management groups, grants to the Department of Environmental Conservation.

Some of those grants pay for programs that have developed their own constituencies in Alaska, and people may not be too pleased to see them go. The alternative is more state money, but some lawmakers aren't sure that is a good idea.

"The federal funds are plummeting, and in some areas it is clearly blackmail -- do this or we'll take the funds away," Rep. Mike Kelly, R-Fairbanks, said. "I think quite a few of us are at the point of saying if what you're demanding is egregious, keep your money."

Rep. Les Gara, D-Anchorage, also sits on Finance. He acknowledged the difficult relationship with the feds.

"This state loves to hate the fed government, and loves to take federal money," Gara said.

Without federal help, Alaska wouldn't have much transportation money -- federal dollars make up about 86 percent -- and last year, the stimulus money prevented potential teacher layoffs. Big Brother also pays for Head Start, Alaska's only real spending on early childhood education.

"Many of the things that create opportunity in the state are thing that politicians rail against, but keep their hand out for at the same time," Gara noted.

Making it known

For some lawmakers, the tipping point comes when federal rules and requirements cost the state not only dollars, but time and even permission in attempts to develop its own resources as a revenue stream.
Rep. Bill Stoltze, R-Chugiak, lamented the burden of the Endangered Species Act when it comes to developing state resources, and praised Gov. Sean Parnell's tact as he has lodged significant state resources -- both funds and lawyers -- in fighting for Alaska's interests in ESA and other matters in Washington, D.C.

Lawmakers on both sides of the political aisle are concerned that federal processes are boxing Alaska in.

"There are places where the federal government is too far away from Alaska to understand our needs," Gara said.

He pointed to a recent Army Corps of Engineers refusal to grant a bridge construction permit to Conoco Phillips, which needed the access to its oil leases in the National Petroleum Reserve.

"It was the kind of academic decision that ignores the state's interests," Gara said. "I know you can build a bridge across a river without destroying it."

Kelly is among lawmakers in Juneau who feel the pull between federal spending and the ensuing jobs, and the desire to be free of federal rules and restraints.

That's evidenced by frequent speeches on the House and Senate floors crying for freedom so Alaska can make full use of its natural resources -- especially oil and natural gas -- and for individual liberties.

Kelly's name shows up often as a sponsor of resolutions in the state House that speak out against federal rules and control. The resolutions don't carry any weight of law, but are seen as a forum for expressing the will of the state's legislators. Typically, they are statements supporting or opposing federal action -- denouncing a federal move making the Arctic National Wildlife Refuge a wilderness area, blasting federal health care reform measures, advocating state sovereignty and condemning tighter flight security restrictions or gun laws.

House Joint Resolution 27, which passed the House last session, "reasserts Alaska's rights as a sovereign. The resolution reminds the federal government that the 10th Amendment limits the scope of federal power to that specifically granted by the Constitution of the United States and no more."

Also passed last session, with bipartisan support, was House Resolution 8, which opposed federal security measures that would affect certain aircraft and that Kelly said didn't make sense in Alaska.

"I've introduced probably more legislation than anyone on point with the federal overreach and our state," Kelly said. "It is my hope that by Alaska weighing in ... is to send a message on a broad front that we've about had enough."

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Source: By Rena Delbridge. Originally published by the Alaska Dispatch on February 19, 2010.