Federal Budget — Alaska Impacts

By Libby Casey

President Obama’s proposed 3.8 trillion dollar budget for the next fiscal year,  unveiled in Washington yesterday, includes hits for Alaska programs… but there are some benefits as well. 

The White House proposes slashing all 10 million dollars of the Denali Commission’s health care facilities construction program.  It says its one of a handful of local health projects that aren’t subject to a competitive process, and that there are other sources of MERIT-BASED federal funding that can accomplish the same goals.

However, Senator Mark Begich says at least the Commission’s base funding of nearly 12 million dollars remain intact.

I’m disappointed that 10 million reduction in health facilities construction program, which has been very beneficial to Alaska and rural communities, but on the positive side he has maintained the base level that he had last year, which means he hasn’t reduced it any further.  Which is a good sign.  As we said last year we have a couple years stabilization we have to do before we can move forward and growing the Denali Commission again.

President Obama also wants to eliminate the High Energy Cost Grants Program, which sends money to utilities in rural areas where rates are especially high.  Senator Lisa Murkowski’s office says Alaska has gotten a sizeable chunk of it in recent years: 10 to 12 million dollars of a national total of 18 million.

But the White House says the bulk of the money directly supports fossil fuel – and so this is on the chopping block as part of the President’s commitment to phase out fossil fuel subsides.

Murkowski’s spokesman on the Energy Committee Robert Dillon says they’ll argue a case that Alaska’s rural utilities need the money.

The administration zeroed out the funding last year, Senator Murkowski was able to get it put back in, and she will try again this year, to put that money, restore that money for Alaska because it’s real important to the communities.

The President’s budget would cut 13 million dollars from the Alaska land conveyance program… but the delegation plans to fight that too.  Senator Begich says right after the budget came out, he got a call from the Bureau of Land Management’s director, anticipating he would be concerned.  Begich says the money is necessary to survey lands so the federal government can meet its legal responsibility to Alaska Native Corporations, the State, and individual Alaska Natives.

They’re gonna now be several years delayed.  And they’ll argue, 96% are being transferred, that’s correct, but you can’t do the full transfer of ownership until the surveys are done, and there’s over 40% that haven’t been surveyed.  And without the surveys the land’s useless.  They recognize this is going to be important for me and we’ve got to figure it out.

The oil and gas industry – and Alaska’s delegation – are concerned about the President’s plan to end billions of dollars in tax incentives to oil and gas companies.

But Interior Secretary Ken Salazar defends the decision:

All you have to do is to look at the record profits of the oil and gas world over  the last several years, and in my view, you’re going to continue to see a great interest in oil and gas because it’s an essential part of our economy today.  It’s expected that it will be, and I know it will be in the years ahead.  And so I think the oil and gas industry will do just fine.

The White House says Alaska will likely benefit from the budget proposal in education funding, small business loan guarantees, and more than 700 million dollars for construction projects.  It raises military pay, and expands medical care to service members and their families.

Senator Begich says he is pleased with military spending.  His office estimates the budget calls for about 420 million dollars in construction at Alaska’s installations and boosts funding for ground based missile defense.

I was very pleased with clearly the work we did last year is paying off even more.  There’s an increase in the ground missile defense system which of course affects us in Alaska.  We saw a notation of initial and design to Clear Air Force Base Early Warning Radar System which is again very worthwhile to Alaska.

The budget is thousands of pages long – and the delegation’s staffs, the Alaska Governor’s office, and others are pouring over it to decipher what exactly it could mean for the state.

It’s just a proposal – next, Congress will have its say.


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