Micciche, Wagoner debate economic matters

Join the Redoubt Reporter for a candidate debate forum with candidates for Senate Districts N and O and 7:30 p.m. Thursday, Aug. 23, at Triumvirate Theatre in the Peninsula Center Mall in Soldotna. Or listen live at KDLL 91.9 FM or KBBI 890 AM, or online at http://www.kbbi.org.

By Naomi Klouda

Photo by Naomi Klouda, Homer Tribune. Sen. Tom Wagoner and Peter Micciche.

Homer Tribune

Incumbent Sen. Tom Wagoner and District O hopeful Peter Micciche faced off at Kachemak City Community Hall on Thursday night, this time answering questions put to them by Homer businesses.

Wagoner told the group he came to Kenai in 1969 when he and his wife drove the highway up. The couple have twin daughters, Donna and Denise, who are both teachers.

“I’ve been a strong proponent of education. The best thing we can do is educate our children. That’s been one of the main strengths of representing District Q (now redistricted to District O) these past 10 years,” Wagoner said. “My background includes that I was dean of Kenai Peninsula Community College when I retired. I started a program here in Homer. 1981, that was the start of the college.”

Micciche is serving as mayor of Soldotna. He works as the general manager of ConocoPhillips’ Kenai LNG Plant, which has been his employer for 27 years. In the summer of 1982, at the age of 19, he arrived on the Kenai to work in the canneries.

“That summer has lasted for 30 years. The Kenai Peninsula was ripe with opportunities for someone who wants to work hard,” Micciche said. “I started out to be an engineer and I ended up finishing in business. I’ve worked most of my career for ConocoPhilips. I’ve been a commercial fisherman.”

Q: Are you comfortable with the current ACES scheme (Alaska’s Clear and Equitable Share) or would you change perhaps, to a system based more on investment or production?

Wagoner: “The tax structure works fine. The trouble started with the doubling of progressivity. That is a percentage of the taxes that is put on excess profits tax. After taxes get so high, the state takes progressively more. If that could be reduced from 4 to 2 percent, it would be more beneficial.

“ACES can be changed. The House passed HB 110 — that doubled the credits for in-field drilling. That’s paying another 20 percent to the companies that are already required to do the in-field drilling. There are problems with ACES but they aren’t problems that can’t be worked out. When you ask to go back to the beginning, to start over, you’re asking for real, real hard work. That’s rewriting the whole tax structure.

“I was the senator who came up with one solution. It was my bill, working with AOGA (Alaska Oil and Gas Association) and with most of the producers on the Slope. I worked with them long and hard to come up with a method to reward production in Cook Inlet. Quite simply, increased historical production levels got a credit.”

Micciche: “We can make adjustment to ACES without rewriting the entire system for now and plan for a longer-term, simplified adjustment in the future. It’s stated in the constitution of our ‘owner state’ to ensure that the benefit of our resource development goes to our citizens. I’m not in favor of the $2 billion giveaway (in tax incentives), but I am in favor of understanding the gap. We need to reward productions.

“As it is now, producers are permitted to write off too many costs that I would rather use to ensure sustainable production.

“The second part I’d like to see is a long-term plan, so we don’t send market share to places like North Dakota. What’s needed are long-term adjustments that benefit both the people of Alaska and the companies that do business here. Let’s lay it out there. Right now we have no energy plan. No plan for where we’re going in the future. Instead of the current Legislature taking a stab at piecemeal solutions, we need a well-thought-out energy plan for the future.”

Q: What is your position on state funding for local projects like the extension of a natural gas line to Homer?

Micciche: “It’s the Legislature’s role to invest in the future in Alaska through state-funded infrastructure, whether it’s electricity or natural gas, even though, in most cases, electrical is member-owned and gas is a private company. That’s the system we have. Frankly, I don’t have a problem helping closing the gaps for our communities. I would not have blocked the line for Homer. Public buildings will have lower energy costs and the public will see the savings. I’m not in favor of funding the distribution line that goes to your home but wherever it’s economically feasible, the state should consider funding transmission lines just as we do for electricity infrastructure.”

Wagoner: “First of all, let me say I didn’t block the gas line. The governor is the one who vetoed it twice. When (Rep.) Paul Seaton came and told me he worked out a system where Homer would have skin in the game, I said, ‘Well, I can buy into the plan.’

“But this is corporate welfare. It increases the net value of Enstar’s system. We are taking money out of the treasury and putting it into a private, for-profit corporation that will increase the value of their net worth. When they sell they physical plant, they will be $10 million richer at the time of the sale. Everyone should be on natural gas, but at what price will we pay for it? Does the state of Alaska pay 80 or 90 percent of the pipeline? These are hard decision.

“I think it’s great Homer is getting gas. This will save taxpayers money.”

Q: The Legislature saw fit to take tourism funding away from the industry-led Alaska Travel Industry Association, and gave it to the Department of Commerce, Community and Economic Development. There is no co-op advertising opportunities for local marketing organizations. Since tourism supports 40,000 jobs statewide and contributes $160 million to the state, what ideas do you have about a permanent solution for the tourism industry?

Wagoner: “The bottom line is that the department should have review of the program, but having a state agency determine it isn’t good. I’ll call the governor and ask him to look at what his administration is doing. “Maybe what we need to do is set this up as model, similar to what we’ve done with the Alaska Seafood Marketing Institute.”

Micciche: “Any industries that are appropriate for state funding are more productive when the services are put into the private industry that has more of an incentive to do a good job, and that has a vested interest in that industry.

I would like to see a member-owned driven organization like ASMI (Alaska Seafood Marketing Institute). The state subsidizes part of it. This is where the Legislature needs fresh pairs of eyes. Not a parochial person who happens to be against tourism. How does it happen that the Legislature appropriated $2.5 million for Alaska Shootout attendees, but can’t assist in industries that benefit everyone in the state?”

Q: There is much contention between commercial and sportfishing interests. How do you propose we find and strike a balance? Where do you stand on the bycatch issue?

Micciche: “I’m a commercial salmon fisherman in Cook Inlet and I am the mayor of a sportfishing town. Anyone who chooses a side doesn’t understand what makes the peninsula economy tick. If it won’t work at the agency or administrative level, and trust me, it hasn’t, then it needs to work at the user-group level.

“In years like this, both sides are having a hard time. What the feds can help us with is reducing the bycatch issue, but the balance is about bringing folks together. We need to think about what would happen if either one of these industries goes away. Set-netters are starving to death. Charter operators and river guides are struggling as well.”

Wagoner: “There has always been a lot of friction between commercial fishing and sportsmen. It used to be we had two groups: sportsmen in the stream and commercial fishing out in the inlet. Now there’s a third group, guides, then there’s a fourth group, dip-netters. Ninety percent of the dippers come from off the peninsula. They come from Anchorage, Mat Valley, Fairbanks.

“We need to stop that blow to the Kenai. We need to find other places for dip netting, maybe someplace farther up the inlet. Our office can work on that. I think also as far as the bycatch, we should demand mitigation 10 to one or 15 to one to get the return of those 50,000 to 60,000 fish that are killed to bycatch.

“We know what systems are being impacted. I think it is legitimate to request that.

“Enhancement, to me, is one of the only things we have left. We should start immediately bolstering the hatchery fish. At end of five years, we would know if the problem is in the stream or if we got a problem in the ocean. At the urging of Pete Wedin, after it was pointed out to me the governor had eliminated it, I asked the governor to put back in the $2.7 million to study the ocean’s acidification problems. And he did. This may lead to better understanding of the ocean acidification problems.”

Q: Do you think the Department of Fish and Game and Board of Fish are doing a good job managing fisheries on the peninsula? What, if anything, would you change?

Micciche: “ADFG, that’s the toughest issue we’ve got to deal with. There is no separation between politics and fisheries management. The little check you’re going to receive in a few weeks, (the permanent fund dividend) — that is insulated from the political process and they’ve done an excellent job managing the program.

“The key in going forward is doing a better job isolating the Board of Fish. Control was taken away from biologists and handed to political staff who made decisions counter to fishermen and the biologists. Place decisions back into the hands of good biologists. We have burned out more biologists and lost more good biologists on the Kenai Peninsula because of not being permitted to do their jobs as they have been trained.”

Wagoner: “(ADFG) is not capable of doing the job because of the money being used to influence fisheries. It is time to look at a professional board of fish. If you think you’ve got problems now, just wait until the Legislature gets a hold of the problem. Commercial fishermen would take it in the ear. A professional board would involve professional training, biologists with sport and commercial fish experience. Isolate them as far as you can away from politics. We need to set it up so stringently that politics can’t get in. There are 400 (set-netter) families that will be destitute this year.”

Q: There is currently a boom in Cook Inlet gas exploration. What does it mean for the future of the peninsula? What, if anything, would you change?

Wagoner: “What it means right now is we’ve got one jack-up rig in the inlet and we’ve got another one on the way. Most of the draw-works and rigs left in Cook Inlet can’t drill to depths that may hold additional oil deposits. When Buccaneer gets its jack-up rig here, the first thing they’re going to do is drill an oil well. Then, they will go down at the Cosmopolitan Unit and drill another one and maybe a second one — gas wells.

“This renaissance is taking place because of several factors. PPT legislation would have shut down Cook Inlet and I ring-fenced it in Senate Resources so it was kept under the old ELF system. Cook Inlet’s tax structure wasn’t revised under ACES. It’s under the ELF system.

“There are people in the current Legislature, the Senate, who will try to tax Cook Inlet on a different structure. But the reason they’re coming in is because of the tax structure. But the biggest reason new explorers/producers are coming in is because of the tax structure.”

Micciche: “I am a big Cook Inlet fan and this is the third increase since I’ve been in the industry the past 30 years. The senator takes credit for helping a little bit, however, Cook Inlet gas has become valuable from the simple law of supply and demand. Down south, Henry Hub gas prices are a fraction of ours here, where the value of summer gas is up to $6 and winter gas is worth up to $12 to $14, more than a 600 percent increase over Lower 48 prices. People here are looking because Cook Inlet gas is currently worth more than anywhere else in the country.

“Ultimately we have to consider, is gas marketable and is it sustainable?  What we need is sustainable gas, which now energizes most of the dense populations of Alaska. We do need a natural gas pipeline from the North Slope. It’s nice to see increased activity, but the ultimate goal is environmentally friendly natural gas for folks from here to Fairbanks that can’t currently afford to heat their homes.”

Q: Where do you stand on Ballot Measure 2?

Micciche: “What is put together now for Coastal Zone Management is the result of a group of frustrated people that our Legislature is dysfunctional and Prop 2 is the political equivalent of torches and pitchforks. When people feel they aren’t being heard, they’ll pull them out and use them. But the costs of this program are unknown and it doesn’t come with a clear set of expectations that I can understand. But I do believe we need a CZM program that works. It’s just that it is difficult to govern by initiative (petitions). The Legislature should perform so good people don’t have to show up with the pitchforks and torches. I’m willing to carry the CZM issue back to Juneau.”

Wagoner: “Kurt Fredickson, a former commissioner of the DEC, is very environmentally sensitive. He’s against Prop 2, he’s out there speaking against it. That should tell you something about it. It’s a new, untested program that has sweeping powers.

“We should have returned to legislation that had support of the Senate, House and governor.”

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