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Natural gas pipeline and education legislation introduced

By Rhonda McBride 9:21 PM January 24, 2014

Senate Bills 138 and 139 were introduced on the Senate floor Friday morning

JUNEAU – Gov. Sean Parnell introduced two major pieces of legislation Friday. One is a road map for the building of a liquefied natural gas pipeline. The other is a package of education reform bills he promoted during his State of the State address Wednesday.

Both were introduced on the Senate floor Friday morning, marking the end of a hectic first week for lawmakers.

The roll out of the governor’s natural gas pipeline legislation, Senate Bill 138, has been low key, upstaged by his education bills. But what’s outlined in this 49-page, highly technical piece of legislation could have a far-reaching impact on the state treasury and jobs for Alaskans.

The measure sets the stage for the state to partner with natural gas producers to build the pipeline. It would create a state-owned company to work with natural gas producers, as well as change the tax structure for gas by switching from a “net” to a “gross” system of taxation.

It would also authorize the Department of Natural Resources commissioner to negotiate with producers.

The cost of building a pipeline could range from $45 billion to $65 billion. The Parnell administration said the state’s share of the investment should range from 20 to 25 percent, or about $9 to $11 billion dollars.

Some lawmakers want the state to have a bigger share of the ownership, so the state can have more control of the project. Others warn that more investment means more risk.

Hearings on this measure will begin next week. Both Republicans and Democrats were slow to react. They said they needed time to go over the bill to understand its implications.

The governor’s education bill generated more controversy. Senate Bill 139 includes an increase in the Base Student Allocation (BSA) — the amount of money the state sets aside for each Alaska student’s education.

The governor has been resistant to raising this rate, but said he would increase the BSA by about $200, spread out over the next three years.

Democrats reacted angrily and said this would not stem the massive layoffs planned in school districts across the state because the governor is only providing a quarter of what is needed.

A number of Republicans weren’t sure about their support for the BSA increase, but for different reasons. Some believe  the legislature has already done enough by steadily increasing funding for education in other areas.

Earlier the governor said the BSA would be subject to negotiation and tied to some of the other reforms in SB 139, such as more support for vocational and technical education, charter schools and regional boarding schools. It also scraps the high school exit exam and sets money aside for digital innovation.

The governor also wants the legislature to put a constitutional amendment on the ballot that would clear the way for students in private schools to receive public money for their education.

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