Senate redirects $50 million from gas line to cops, roads, schools; House says it will reinstate

Imagine our surprise when we learned the House Finance co-chairman said that chamber’s Democrat-led coalition would redirect $50 million earmarked by the Senate for cops, prosecutors, roads – and schools.
“We are committed not to interrupt the FERC process and the solicitation of investors” in Alaska LNG, Rep. Paul Seaton told the Alaska Dispatch News. Seaton, a Homer Republican, is a member of the Democrat-led House coalition pushing for an income tax and changes in the oil production tax.

Republican Sen. Mike Dunleavy of Wasilla earlier offered an amendment to the capital budget to strip $50 million from the Alaska Gasoline Development Corp. The amendment passed “without objection” and would give $5 million of the money to the Department of Law for prosecutors; $10 million to Department of Transportation for road maintenance and plowing; $10 million to the Department of Public Safety for more troopers, and $25 million to the Public School Trust Fund.

The pipeline corporation has more than $100 million stashed away as it proceeds with its Federal Energy Regulatory Commission permit application for the Alaska LNG Project to move gas from the North Slope south to Nikiski for shipment overseas.

The Walker administration has no firm commitment from gas buyers or any contracts for gas. The line’s financing has been, and is, questionable. There are also questions about how the state could be partner in the line and remain a taxing and regulatory authority.

AGDC, the state-owned corporation leading the Alaska LNG Project, has about $102 million in previously appropriated funding and is seeking a Federal Energy Regulatory Commission pipeline permit for the $45-$65 billion effort.

The state took control of the project after its partners, ExxonMobile, BP and ConocoPhillips, withdrew, saying it did not pencil out.

With the state’s $2.5 billion deficit and lawmakers considering taxes and using the Permanent Fund to fund government, we are left to wonder whether using the $50 million in question for cops, prosecutors, roads and schools is not better than pouring another $50 million into an iffy project.

The answer apparently is not all that clear to some in Juneau.

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