James Brooks

Feds: State doesn't need to repay Juneau road money

A representative of the Federal Highway Administration confirmed Friday that the State of Alaska will not have to repay federal money spent on planning for the Juneau Access project. “No, the state does not need to reimburse the federal government,” said spokesman Doug Hecox by phone from Washington, D.C. He said it’s not uncommon for a state or agency to cancel a project before a record of decision. “At the end of the day, we want a project that everybody likes, and you don’t always get that,” Hecox said. To date, the state has spent $27.8 million of federal money on the Juneau Access project, according to figures provided by Department of Transportation & Public Facilities spokesman Jeremy Woodrow. Had construction gone forward, the federal government would have shouldered 90 percent of the $574 million cost of the project. The state would have been required to pay about $57 million, but most of that money had already been appropriated in previous sessions of the Alaska Legislature. Since the early 2000s, the state has been working through a process to select the best plan for improving transportation between Juneau and the northern end of Lynn Canal. After creating a list of options, the state selected a road up the east side of Lynn Canal to a ferry terminal north of the Katzehin River. In 2006, a lawsuit forced the state to halt work, and in 2009, a judge ordered the state to restart the planning process and include improved ferry service as a possible alternative. The state again preferred the east-side road, but Walker on Thursday selected the “no-build” option. Walker’s choice effectively ends the Juneau Access project, though the project’s surveys and records will remain on file for use in future discussions of a road out of Juneau. There will certainly be such discussions — since 1905, when the Juneau Chamber of Commerce suggested construction of a road to Atlin, British Columbia, the city of Juneau, territory of Alaska and state of Alaska have repeatedly planned and canceled projects that would connect Juneau to the North American road system. Juneau remains the largest unconnected city on the North American mainland. Contact reporter James Brooks at 523-2258 or [email protected]

Alaska’s job market in worst shape since the 80s recession

In a report released Friday, the analysis branch of the Alaska Department of Labor and Workforce Development determined the state had 5,530 fewer jobs on average during the first six months of 2016 when compared with the same six months in 2015. The statistics run from January 2016 through June 2016. They show the difference between the two years widened as the year progressed. In other words, the job losses accelerated.  Worse for Alaska’s economy, the lost jobs were high-paying ones. Employment fell 1.6 percent, but wages fell 4.5 percent. “No argument: This is the worst state Alaska’s economy has been in since that ’80s recession,” said state economist Caroline Schultz, who helped compile the data. Schultz has specialized in analysis of the 1980s recession. “The only other time we’ve had job losses statewide was in 2009,” she said, and that one-year dip was less than 1 percent. Through the first six months of this year, the decline is almost double that pace. Given the decline in oil prices, “we all knew it was coming,” Schultz said. Friday’s report is especially threatening because it shows that the decay in oil and gas employment spreading into other sectors of the economy. Retail employment was down, and so was transportation and warehousing. Construction employment was down an average of 8.3 percent, and even hotels, restaurants and bars showed job losses overall. In the 1980s, a collapse in oil prices caused state government revenues to plummet. In response, the Alaska Legislature slashed state spending and fired thousands of state employees. The double-barreled job losses in the private and public sectors of the economy led to a surge in foreclosures and bank failures across Alaska. This time around, Alaska’s state government has been able to stagger its job cuts through the use of savings to make ends meet. Those savings are almost exhausted, and the Alaska Legislature this year will be tasked with either cutting jobs, raising taxes or some combination of both approaches to balance the state budget. In Juneau, state government employs 23 percent of the city’s workers. The figures released Friday show the City and Borough of Juneau lost about 2 percent of its jobs when comparing the first half of 2015 and the first half of 2016. Juneau’s private-sector employment declined 0.8 percent (81 jobs), while there was a decline of 7.3 percent in state employment. This was partially countered by a 0.6 percent (4 jobs) increase in federal employment and a 1.1 percent increase (23 jobs) in local government employment. The Juneau School District provides most local government jobs. Figures for the third quarter of 2016 will be available in January, and figures for the last quarter of 2016 will be available in spring. The data released Friday comes from the state’s quarterly census of employment and wages, considered the best available figures. The federal Bureau of Labor Statistics publishes a monthly jobs report, but it has consistently estimated flat or even rising employment in Alaska, something the state figures belie.  

A jolt for electric cars in Juneau

Juneau’s electric company is planning a pair of programs to encourage electric-car use. In a filing this week with the Regulatory Commission of Alaska, Alaska Electric Light and Power said it wants to lease car-charging equipment to customers and will offer cheaper power to electric-car users who charge their cars at night. “I want people to be able to adopt this new technology in a manner that has the lowest negative impacts on the electric system,” explained Alec Mesdag, AEL&P’s energy services specialist. The latest figures from the Department of Motor Vehicles and the Alaska Department of Transportation and Public Facilities indicate about 100 of Juneau’s 20,000 vehicles are fully electric and their numbers are rising. This month, Chevrolet will roll out a $30,000 vehicle with a 230-mile range, and other companies are expected to quickly follow suit. At that price point and vehicle range, analysts expect electric cars to move from a niche product into the mainstream. “We know this is a technology that is in favor in Juneau ... and we will see growth,” Mesdag said. For AEL&P and electric companies across the country, electric cars are a double-edged sword. They consume electricity, which boosts sales, but they also threaten to increase peak demand. That’s a problem for AEL&P, which isn’t connected to a larger electrical grid and can’t buy electricity when it needs it. It has to produce every kilowatt, and if it doesn’t produce enough, residents across the city could see their lights dim. Mesdag says he’s worried about what would happen if 1,000 electric-car users started charging their vehicles right when they got home from work — the peak of Juneau’s daily demand. AEL&P would have to build new power plants to meet that higher peak, and the cost of those plants would be passed on to everyone who pays a power bill. That’s why AEL&P is planning its double-barreled approach. If Juneauites charge their cars between 10 p.m. and 5 a.m. — when usage is less — the city might not need new power plants and AEL&P won’t have to pass the cost along. According to the documents filed with state regulators, AEL&P will offer electric-car owners the little-known “demand metered energy charge” if they charge at night. That rate is 6.02 cents per kilowatt/hour during the winter (November through May) and 5.26 cents per kilowatt/hour during the summer. That compares to 12.4 cents and 10.2 cents for ordinary residential electrical service. The lower rate won’t be applied to the car owner’s entire bill, only the electricity used on the car will receive the lower rate. Customers must agree to install a separate electrical circuit for their car charger and have a second electrical meter installed on that circuit. AEL&P will check that meter and subtract its reading from the main house meter. Homeowners can set up much of that system, or they could have AEL&P do it for them. AEL&P is offering to rent a charger and second meter for $11.28 per month. Electric-car charging equipment — unless included in the price of a new car — can cost several hundred dollars. Whether AEL&P provides the charger or not, the homeowner likely will need an electrician to install an electrical circuit specifically for the car charger, something that could cost a few hundred to a thousand dollars, Mesdag said. AEL&P’s plan must be approved by the Regulatory Commission before becoming effective, but the company has asked regulators to speed the process along. They’d like to have the new program up and running by the second week of January, the endpoint of a prototype program the company already offers to 10 select electric-car owners.

Most state employees can use marijuana off the job

Tera Ollila was smiling when she became one of the first people to legally buy marijuana in Juneau. When it came time to talk to a reporter, her smile faded. “Do you have to use my name?” she asked before granting permission. Ollila, like some of those waiting in line Wednesday and Friday at Rainforest Farms, is a state employee, and while she believed state regulations allowed her to buy marijuana without threatening her job, she wasn’t 100 percent sure. The state of Alaska’s official drug-free workplace policy, last updated in 2012 (two years before voters legalized marijuana), states: “Classified employees and appointed officials are prohibited from engaging in the improper or unlawful use manufacture, distribution, dispensing, possession, or use of alcohol or a controlled substance on state property, in the workplace or while in performance of official duties.” In other words, no using marijuana on the job and don’t be high on the job, including on a work-related trip. Otherwise, as long as you’re not intoxicated at work, what happens at home stays at home. There are a few exceptions are for what the state calls “safety-sensitive positions” regulated by the federal government. Those include (but are not limited to) many ferry system workers and people with commercial driver’s licenses. “Some state employees in safety sensitive positions are prohibited from having THC in their system,” said Division of Personnel and Labor Relations’ Nancy Sutch in a statement provided by a Department of Administration spokeswoman. “Employees should contact their HR representative if they’re unsure of their status.” Many state departments require pre-employment drug testing, and if someone is suspected of being intoxicated on the job, the state can ask an employee to take a drug test. The exact procedures for that, and the chances of random drug screening, vary by position. Under the regulations approved by the Alaska Police Standards Council, corrections officers, parole officers, police officers and probation officers can’t use marijuana. If they do, they risk having their police certificate revoked by the council. The same standard doesn’t apply for Village Public Safety Officers — their regulations contain no restriction against using marijuana in off-hours, but they have to refrain from using marijuana in the year immediately before they are hired. Rainforest Farms last week became the first marijuana store to open in Juneau, and a second will come before the Juneau Planning Commission on Wednesday. A third is awaiting approval by the state licensing board, and entrepreneurs have announced plans to open five more in the capital city. For these businesses and prospective businesses, state rules affecting marijuana use aren’t an abstract problem. In 2015, according to figures from the Juneau Economic Development Council and Rain Coast Data, 4,097 Juneauites were employed by the state. Another 2,042 were employed by local and tribal governments (including the hospital, school system, airport and harbors), and 693 were employed by the federal government. That’s a substantial fraction of the 17,930 people who have jobs here. The federal government figures do not include uniformed Coast Guardsmen and women, but uniformed or not, federal workers are prohibited from using marijuana, even in their off hours. That’s not the case for employees of the City and Borough of Juneau, who operate under rules more like those of the state. The CBJ’s drug-free workplace policy was last updated on Aug. 13, 1990, and states that anyone using, intoxicated by or possessing “controlled substances in the work environment or during working hours is subject to immediate disciplinary action up to and including dismissal.” It doesn’t include any notice barring employees from home use. Dallas Hargrave, the city’s human resources director, said the city’s policies on marijuana are roughly the same as they are with alcohol. If someone had a few drinks at lunch and came back to work intoxicated, they’d get in trouble. If someone used marijuana before work or during work and was high, they’d get in trouble. As for the rest of it? “As long as they’re not impaired at work, what they do on their off time is not relevant to us,” Hargrave said.

Covering the cost of cannabis

The State of Alaska will collect its first marijuana taxes this month, but records from the Alaska Alcohol and Marijuana Control Office show the nascent industry has already paid more than three quarters of a million dollars in fees since the first license requests were filed in 2015. According to the results of a public records request filed by the Juneau Empire, marijuana retailers, testing labs, manufacturers and growers paid $341,512.50 in fees between July 1, 2015 and June 30, 2016. From July 1 through Nov. 1 this year, they paid another $428,144. “We’re really happy to be able to be above-board and contributing to the state at a time where we’re absolutely strapped for cash,” said Cary Carrigan, executive director of the Alaska Marijuana Industry Association, which represents businesses across the state. Those figures only tell part of the story, however. The Alaska Department of Commerce and Community Development, which oversees AMCO, has stated that it wants to make the department completely self-funded with fees by fiscal year 2020, which starts in July 1, 2019. “I think we’re on track,” said Cynthia Franklin, director of AMCO. In Fiscal Year 2017, which started July 1, the state provided $1.5 million in startup funds to pay for marijuana regulation. That came atop $700,000 in the previous fiscal year. Even if fee applications continue at the present pace, AMCO won’t make enough in fees to cover that bill. Furthermore, the state splits permit fees with municipalities. If a marijuana farm pays the $5,000 fee for a permit, half that sum will go directly to the city or borough that hosts it. The figures provided by AMCO don’t include that split, and even if they did, AMCO doesn’t have permission from the Legislature to spend more than $100,000 of the money it has collected so far. The remaining $670,000 will remain locked away until lawmakers allow the state to spend it. That leaves AMCO in an ironic situation: It is struggling to deal with a flood of marijuana demand atop the normal tide of alcohol license renewals, but a state hiring freeze and the locked-up money mean it can’t immediately fix the issue. At a meeting in late October, Jeremiah Emmerson of the Alaska Small Cultivators Association pleaded with the Marijuana Control Board to release more financial information. “We could utilize that information to maybe put a little public pressure on the governor to say… ‘can we please, please assist this particular agency with more staff?’” he said. “I know you guys are overwhelmed, and I really think the cure-all is to have more staff so we can get through things more rapidly.” AMCO figures don’t include the regulatory costs incurred (and fees collected) by other state agencies, including the Department of Environmental Conservation, which will oversee kitchens producing marijuana edibles. “At this point in time, so far, we haven’t yet gotten to the point of it being a revenue generator,” said Rep. Lance Pruitt, R-Anchorage and chairman of the subcommittee that set AMCO’s budget this year. “We need to focus first on it covering its costs.” In Alaska, marijuana businesses — like alcohol vendors — pay both taxes and fees. There’s little question that this year, the state will make millions of dollars from marijuana taxes. The state tax is $50 per ounce for flower (or bud) and $15 per ounce for other parts of the cannabis plant. Earlier this year, the Alaska Department of Revenue estimated that the state will collect $6 million in fiscal year 2017 and $12 million in 2018 from marijuana sales. The first ceremonial retail sale took place Oct. 28 in Fairbanks, and the first official store opening took place Oct. 29 in Valdez. The first tax deposit is expected no later than the last day of November. Pruitt and many other lawmakers make a distinction between taxes and fees. “Really, the fees should cover the cost of the regulation, and taxes should be going toward the state coffers to pay for other things,” he said. When he campaigned for office this fall, Pruitt said he heard from voters who said the industry needs to get up and running with help from the state. He’s not opposed to that, but in testimony earlier this year, he said he wants to make sure that isn’t a permanent situation. “Maybe we need to use some of the taxes at first to get it off the ground, but that should be kind of a temporary thing,” he said. Carrigan said he thinks “we are willing to pay what’s reasonable and necessary to move the industry forward,” but it will take time for marijuana to pay for itself on fees alone. He said the state’s goal of summer 2019 is a reasonable one that will give the industry time to open its retail stores. “Right now, people are paying a ton of money out of pocket, and it’s really incumbent on us to get our retail operations open,” he said. When that happens, the marijuana industry will start to resemble the alcohol one. Last fiscal year, that industry generated almost $2 million in licensing and permit fees, enough to pay for all alcohol regulation operations in Alaska.

Suggestions for the Alaska Marine Highway

A new report commissioned by Southeast Conference recommends that the Alaska Marine Highway System become a state-backed corporation semi-independent of government. The report’s draft recommendations were presented to the state’s Marine Transportation Advisory Board, which met in teleconference Monday. “Our recommendations were to basically move the Marine Highway system’s operations toward a public corporation model,” said John Waterhouse of Elliott Bay Design Group, which was hired to create the report. The proposal is not privatization; rather, it suggests the ferry system run similarly to the Alaska Railroad. Speaking to the advisory board, Waterhouse said making Alaska’s ferry system an independent corporation would allow it “the flexibility and tools to manage their own cost centers.” The system would also be able to negotiate directly with unions and employees, rather than working through other state agencies. “Right now, labor is being handled by the Department of Administration. We believe that the Marine Highway System needs to be working directly with their unions and their bargaining units,” Waterhouse said. Before making its recommendation, Elliott Bay analyzed six different approaches and took lessons from British Columbia’s ferry system, the system in Massachusetts, and the system of Scotland. The project also gathered information at a statewide summit, online, from municipal governments and at Southeast Conference. Board member Greg Wakefield asked Waterhouse how this new idea would address the ferry system’s principal problem: rising costs and flat revenue. “The real message is that the Marine Highway System failed its riders by not having regular fare increases over the past 20 years, because every other transportation business had to do that,” Waterhouse said. The report recommends the state continue to own the ferry system’s boats and terminals to ensure continued access to federal funding for transportation. It also recommends a second phase of planning that would determine how to execute the transition to a public corporation. In the meantime, the report recommends the state forward-fund the ferry system, give it direct control of labor negotiations, and allow it more control of fares. Columbia damage extensive The ferry Columbia, taken out of service in September due to propeller damage, will not return to operation until April, said Department of Transportation and Public Facilities Deputy Commissioner Mike Neussl. Neussl told the advisory board that a shattered propeller contaminated the variable pitch gearing that controls the prop. “There’s a pretty major repair effort underway on that,” he said. Meanwhile, the ferry Malaspina has had its overhaul extended as engineers discovered a significant amount of wasted steel. “That vessel will not come out of overhaul until January,” Neussl said. To compensate, the ferry Kennicott will stay on the route between Southeast and Bellingham, Washington. Alaska-class ferry work progressing The first half of the Alaska-class ferry Tazlina was rolled out of the enclosed Vigor Shipyard facility Sunday, manager Doug Ward told the advisory board. The Tazlina and its sister ship, the Hubbard, are being built in modules and halves. There are 14 modules in the first half and eight in the second half. Ward said the first half has been protected with temporary weatherproof bulkheads, allowing work to continue outside while the second half is built indoors. Neussl said the Tazlina is ahead of schedule, with expected delivery in December 2017 or January 2018. The Hubbard is roughly four and a half months behind schedule, with delivery now expected in early 2019. He added that during the contracting process, “there were concessions made on state furnished equipment,” and the ferry system is now trying to find money for that equipment. The ferry system is also trying to obtain a waiver from the state’s “1 percent for art” program, which would otherwise require the ferry system to spend $1.01 million to decorate the two vessels. “That seems like an excessive amount to be expended on art,” Neussl said. He also concluded that the two ferries will not be alone in Lynn Canal when they begin operating. “I think mainliners are still going to run up Lynn Canal, at least initially,” he said.

Alaska voters are already setting records

Even before the polls opened Tuesday morning, 68,547 Alaskans had already cast votes in the general election. That’s 13 percent of the state’s 528,879 registered voters and a new record for early voters. According to posted figures by the Alaska Division of Elections, 31,533 Alaskans voted early at the polls between Oct. 24 (when early voting started) and Monday morning. In 2004, Alaska had just 10,894 early voters. Four years later, the figure jumped to 24,512 early voters. In 2012, it was 19,937. “Our numbers for early voting are way up,” said Carol Thompson, director of the state’s absentee-voter program. Early voting is different from absentee voting. In early voting, the voter’s ID is verified at the polling station. In absentee voting — whether by mail, fax, email or other means — the voter’s identity has to be determined after the ballot enters the box. That means a slower pace of counting. About 31,000 Alaskans have already cast absentee votes this year, fewer than in past years. In 2012, there were about 61,000 absentee votes cast statewide. Two-thirds of absentee ballots requested this year have already been returned. The record pace of early voting been apparent at Juneau’s two early-voting sites. At the State Office Building, which has been welcoming voters between 8 a.m. and 5 p.m. each weekday, 15 people voted in the first 40 minutes after the doors opened Monday. Poll worker Hali Denton joked that people were “clawing at the doors” two minutes before 8 o’clock. She predicted a “crazy” scene later in the day and on Election Day, but during Monday’s lunchtime rush, things appeared orderly — if busy. That was also the scene at the Mendenhall Mall Annex, where the Division of Elections has its regional office. The annex was the only place in Juneau where voters could cast ballots in person Saturday and Sunday, and on Sunday afternoon more than a dozen people stood in line or in polling booths to cast their votes. One young boy sat with his parents and — after learning why they were at the mall — asked, “Is the president here?” In all of Alaska elections Region I, which includes House Districts 29 through 36, there were 12,693 ballots filed by Friday. Another 940 were recorded over the weekend. All early votes cast before Election Day have been set aside and will be counted with the votes cast on Election Day. Absentee votes mailed and received by Oct. 28 will also be counted on Election Day. Absentee votes that arrive at the Division of Elections after Nov. 1 will be counted as early as Nov. 15. The state allows absentee votes postmarked by Election Day to arrive as late as 15 days after the election. Votes will be counted Nov. 15, Nov. 18 and Nov. 23. The Division of Elections intends to certify all the results by Nov. 29.

Alaska Airlines / Virgin merger waiting for fed approval

Alaska Airlines is still waiting for the federal government to approve its merger with Virgin Airlines. In a conference call with investment analysts on Thursday morning, Alaska Air Group CEO Brad Tilden said the company has the money and the willingness, but it doesn’t yet have federal permission. “As to timing, we were hoping to get this done a couple of weeks ago, and we’re obviously not quite there yet,” he said. “It’s hard to predict the exact timing of when we’ll wrap up.” The merger of Virgin Airlines and Alaska Airlines was announced April 4 and has been in the works since. It would create the nation’s fifth-largest airline, but the U.S. Department of Justice is considering the merger on antitrust grounds, as it does with all significant proposed mergers. Alaska Air Group includes Horizon Air, and the merger would put Virgin alongside Alaska and Horizon in the Air Group parent company. Tilden said he is “confident the deal will get done” and called the move a “pro-consumer merger of two smaller airlines.” At the end of the third quarter, Alaska Air Group reported having $3.2 billion in available cash to prosecute the merger, including $1.5 billion it borrowed specifically for the process. “At this point, we’re fully prepared to close the deal once we have DOJ approval,” said Brandon Pedersen, Alaska Air Group’s chief financial officer. Tilden said he was unable to talk about the merger in detail, including whether or not there are conditions that would stop the merger. “We do have a pretty strong internal compass about what’s worked for us and what will work for us in the future,” he said. Tilden’s statements came as the company announced its third-quarter earnings. Its net income of $256 million during the period was down from $274 million during the same period last year, but in the year to date, the company has reported $700 million in net income as compared to $657 million during the first nine months of 2015. “2016 is shaping up to be a year of record profitability,” Tilden said. According to statistics provided by the company, Alaska Air Group had flown 25.5 million passengers in 2016 as of the end of September, compared with about 24 million during the first nine months of 2015.

Nageak out, Westlake now the winner

Dean Westlake was ebullient and seemed a little stunned Wednesday, an hour after learning the Alaska Supreme Court had upheld his August primary-election victory over incumbent North Slope Rep. Benjamin Nageak. “Holy cow, I wasn’t expecting such a fast turnaround,” he said by phone just after 5 p.m. “My attorney contacted me and said we won. I’m just ecstatic.” The decision by the Court to uphold Westlake’s Aug. 16 win was issued less than four hours after attorneys finished oral arguments in the issue. The Court had said it would issue a verdict in the case by Friday, but Westlake said he heard the news from attorney Thomas Amodio just before 4 p.m. No Republicans filed to enter the race for House District 40 ─ which encompasses the North Slope and Northwest Arctic boroughs ─ so Westlake, now the winner of the Democratic primary, will become one of Alaska’s newest legislators when he begins serving in January. “I’m glad that it’s over with, and now the real work begins,” Westlake said of his legal battles. Those battles began soon after the Aug. 16 Democratic primary. Election-night returns showed Westlake with a small margin of victory. A recount allowed him to widen his lead to eight votes, 825-817. Nageak challenged the election in court, citing mistakes made by election workers in several North Slope precincts. In Shungnak, a small Northwest Arctic Borough town, all voters received both the Republican ballot and the ballot for other parties, including the Democrats. Fifty-one voters cast 102 ballots. After hearing a week of arguments, Anchorage Superior Court judge Andrew Guidi ruled that mistakes had been made and those mistakes ─ when combined with a refusal by Shungnak election workers to receive training ─ rose to the level of deliberate “malconduct,” the standard for reversing an election. Based on the Shungnak mistakes and errors in another precinct, Guidi subtracted 12 votes from Westlake (Shungnak was a pro-Westlake precinct) and two from Nageak. That gave Nageak a two-vote election victory. Guidi’s word wasn’t final, however ─ both sides in the legal fight were prepared to appeal to the Alaska Supreme Court, which received opening briefs last weekend and prepared for oral arguments Wednesday. A complete legal opinion from the Court was not available at 5 p.m. Wednesday, but in a minority dissent, Justice Daniel Winfree said he would have preferred a new election. All sides faced a tight deadline: The Alaska Division of Elections needed to mail ballots to North Slope precincts by Oct. 17 to allow early voting to start on time, Oct. 24. While the Westlake-Nageak race was distant from Juneau, it could have implications in the statehouse. Nageak, the incumbent, worked in the Republican-led majority in the House of Representatives. Alaska Democrats have been working to dismantle that majority, and in the primary election, the Alaska Democratic Party supported Westlake financially. By phone on Wednesday night, Westlake said the important takeaway from the Supreme Court decision isn’t its impact on the statehouse or on his race in particular. It’s that the court ruled every vote valid and every vote counted. “It’s nice to have the highest court in Alaska reaffirm you (the voter) are absolutely, unequivocally the most important part of any election,” he said. James Brooks can be reached at [email protected]

An Interview with Margaret Stock

It was a good week for Margaret Stock. The independent candidate challenging Lisa Murkowski for U.S. Senate was endorsed last week by former Sen. Mark Begich and by the Tongass Democrats. “The Tongass Democrats believe that Margaret Stock, while sharing the core tenets of the Democratic Party, best represents the many diverse and varied positions of all Alaskans,” the organization said Friday. On Wednesday, Stock sat down with the Empire for an hourlong interview, explaining her run for office. “It’s partisan warfare in the Congress,” she said. With Congress so deeply divided between Republicans and Democrats, the “partisan dysfunction … is having a bad effect on Alaska.” If she is elected to Congress as an independent, “I’m going to be the most sought-after person in the U.S. Senate,” she said. Fifty-three percent of Alaskan voters are registered as either nonpartisan or undeclared, according to figures from the Alaska Division of Elections, and Stock believes she has a good shot at winning their votes. Stock is an attorney specializing in immigration issues, but her background is in the military. She was born and raised in Massachusetts and said her family fell apart after her father died when she was 15. She spent time in a homeless shelter and was the subject of a child-custody case. She dropped out of high school and was taken in by a foster family. Her old high school’s guidance counselor urged her to continue her education, and she was able to gain admittance to Boston University, earn her high school degree through a program there, and pay for school through ROTC and loans. She completed paratrooper training and was commissioned as a reserve officer. She transferred to Harvard College and, upon graduation, volunteered for active duty in Alaska. She returned to Harvard for graduate school, earning a law degree. She continued her military career as well, serving in Japan, Korea and other parts of the United States. She married in 1992 and had a daughter, Catherine, in 1997. Her most significant accomplishment — one she received a MacArthur “genius grant” award for — was the development of the Military Accessions Vital to the National Interest program for the Department of Defense. That allows immigrants with translation skills or medical skills to become U.S. citizens quickly if they enlist in the U.S. military. It took “less than a year” from the time she proposed it in early 2008 to the time it was approved by the Secretary of Defense, she said, and according to federal statistics, 5,200 new citizens were registered under the program in fiscal year 2016 alone. Stock said one of her overarching beliefs is that it’s important to not put short-term gain ahead of long-term benefits. She supports the reversal of the Citizens United Supreme Court decision and would like to see the U.S. reduce its spending on nuclear weapons. “I believe in science. I do believe humans have something,” to do with causing climate change, she said. “We (in Alaska) should be the nation’s laboratory on alternative energy, and that could be our contribution to combating climate change.” With regard to conflict in the Middle East, Stock says she favors “targeted intelligence solutions to problems,” and not outright intervention. She believes the combination of intelligence, special forces, humanitarian aid and diplomacy are key to solving the current issues in Syria, and she wants to see more “reasoned analysis” whenever American troops are deployed into battle. She believes Russia is operating under “a strongman system,” and that requires care with the way the U.S. deals with Vladimir Putin. “He’s the kind of guy who responds to strength,” she said. Locally, Stock said she’s monitoring the issues with Canadian mines upriver from Alaska salmon streams. “I don’t want to see a mining concern on the other side of the border wreck a renewable resource,” she said. She said she’s a strong supporter of Second-Amendment rights, but she supports all the amendments, not just the Second. Stock will be on November’s general election ballot alongside Murkowski, Libertarian Party candidate Joe Miller, Democratic candidate Ray Metcalfe, and other independent candidates Breck Craig and Ted Gianoutsos. James Brooks can be reached at [email protected]

Republicans call for Trump to drop out

Alaska's two U.S. Senators have called for Republican Presidential candidate Donald Trump to give up. In prepared statements issued Saturday morning, Sen. Lisa Murkowski and Sen. Dan Sullivan, both Republicans, called for their party's standard-bearer to step aside in favor of his vice-presidential candidate, Indiana governor Mike Pence. "I cannot and will not support Donald Trump for President ─ he has forfeited the right to be our party's nominee. He must step aside," Murkowski said. The senators' comments came one day after the Washington Post published video from a 2005 "Access Hollywood" interview with Trump. In the video, taken behind the scenes of the program, Trump boasts of kissing, groping and sexually harassing women, saying at one point that "when you're a star, they let you do it." "You can do anything," Trump says in the recording. "Whatever you want," says another voice. In his prepared statement, Sullivan said he has "tried to do everything in my authority" to fight sexual assault and domestic violence. "We need national leaders who can lead by example on this critical issue. The reprehensible revelations about Donald Trump have shown that he can’t. Therefore, I am withdrawing my support for his candidacy," Sullivan said. At the end of his statement, Sullivan said he will support Pence for president. Rep. Don Young, Alaska's sole delegate in the House of Representatives, has never endorsed Trump or pledged support for him, but he did not immediately call for Trump to drop out of the race. His spokesman, Matt Shuckerow, offered a prepared statement from Young: "Donald Trump's comments were terrible and extremely demeaning to women. Nobody deserves to be treated that way." Former Alaska Gov. Sarah Palin is sticking by her early support of Trump, posting on Facebook that while his "braggart comments" in the video "were beyond abhorrent and offensive," it was "a very old conversation between non-political figures when we're in a crucial time." Murkowski and Sullivan are two of several prominent Republicans who abandoned their previous support for Trump's presidential campaign on Saturday. Vice-presidential candidate Pence said in a statement that "As a husband and father, I was offended by the words and actions described by Trump in the eleven-year-old video released yesterday. I do not condone his remarks and cannot defend them." Speaker of the House Paul Ryan has not recanted his support for Trump's presidential campaign, but he dis-invited Trump to one of his campaign rallies scheduled for Saturday in Wisconsin.  John McCain and five other U.S. Senators (in addition to Sullivan and Murkowski) had withdrawn their support for Trump by 2 p.m. Alaska time Saturday. So had several U.S. Representatives. For his part, Trump has said he will not step down and will continue his campaign. He apologized "if anyone was offended" by his comments. Removing Trump from the November election would not be easy in Alaska, which has already printed its ballots for November. According to state law, it's too late for a substition, but a write-in replacement could happen.  The second presidential debate is Sunday night.

Nageak now wins by two votes over Westlake

Anchorage Superior Court Judge Andrew Guidi has given Rep. Benjamin Nageak, D-Barrow, the victory in his House District 40 primary, reversing the result on Election Day in August. According to the recounted and certified results of the election, Dean Westlake defeated Nageak by a margin of eight votes: 825-817. In a decision dated Thursday, Guidi ordered the Alaska Division of Elections to reduce Westlake’s total by 12 votes and Nageak’s total by two votes, resulting in a final tally of 815-813 in Nageak’s favor. “At the conclusion of its retabulation, the Division of Elections shall certify Mr. Nageak as the winner of the Democratic primary in H.D. 40,” Guidi wrote. The case is already bound for an appeal to the Alaska Supreme Court, with oral arguments scheduled for Wednesday, but Guidi’s decision is an important one because the Supreme Court has traditionally been reluctant to overturn a lower court decision without cause. House District 40 encompasses the North Slope and Northwest Arctic boroughs, and no Republican is in the running for the Legislative seat that represents the district. That means whoever wins the primary will be seated in the Legislature. Nageak, an incumbent Democrat in the North Slope, caucuses with the Republican-led House majority. During the campaign prior to the August primary, the state Democratic Party chose to back his opponent as part of an effort to create a more equal majority coalition in the House. Republicans, with no candidate of their own in the race, backed Nageak. Rep. Lance Pruitt, R-Anchorage, declared at a fundraiser that Nageak is one of the best Republican members of the House. During oral arguments in front of Guidi, Nageak attorney Tim McKeever called former GOP state chairman Randolph “Randy” Ruedrich to the stand as an expert on elections. An attorney for Westlake turned to the Democratic campaign manager for similar reasons, but Guidi found Ruedrich’s 20 years of experience “more authoritative and reliable” than the Democrat’s four years. McKeever successfully overcame a tall task in overturning the results of the August primary. Under state law, he had to prove “malconduct” — that elections officials made mistakes, that those mistakes changed the results of the election, and that those mistakes were deliberate. Those standards were met in two precincts, Guidi said: Shungnak, a town of about 260 people in the Northwest Arctic Borough; and Kivalina, a coastal town of about 370 people also in the Northwest Arctic Borough. In Kivalina, seven voters cast two ballots after demanding a second ballot. The Division of Elections initially counted the seven ballots as duplicates, but during the recount, decided to count them. “The court finds that this decision was in error,” Guidi wrote. While Kivalina had problems, “the most significant irregularities in the August 2016 primary election took place in the Shungnak precinct,” Guidi wrote. In that precinct, all 51 voters voted twice: they cast both Republican and Democratic ballots when they should have been allowed to pick only one. Although Nageak and Westlake appeared only on the Democratic ballot, forcing everyone to vote the Democratic ballot slanted the election, Guidi found. Some Republicans would have picked the Republican ballot and would not have voted in the Nageak-Westlake race. When poll workers offered each voter two ballots, they “violated clearly established constitutional rights as well as the requirements of statutory law,” Guidi wrote. “Given the constitutional dimensions of these actions and the scale on which they occurred, it is the opinion of this court that they constitute election malconduct.” In his ruling, Guidi found Shungnak officials acted “in reckless disregard of the requirements of the law,” and that the Division of Elections bears some responsibility because it is “their employer, trainer and supervisor.” Giving two ballots to every voter “cannot be characterized as an ‘honest mistake,’” Guidi wrote, because if he were to do so, it “would undermine the credibility of the election and incentivize similar ‘honest mistakes’ in the next election cycle. This would be a terrible message to send.” Having ruled the Kivalina and Shungnak elections flawed, Guidi determined that because Shungnak was a “heavily pro-Westlake precinct,” the effect of the error “was not neutral; it biased the vote total in favor of Mr. Westlake.” With that in mind, he ruled that 11 Westlake votes should be stricken from the tally in Shungnak and one Nageak vote should be stricken from the tally there. In Kivalina, each candidate lost one vote. The final result, after subtraction, erased Westlake’s eight-vote advantage and gave Nageak the win. Case will head to the Alaska Supreme Court for prompt appeal, with a final decision expected next week.

Nageak says he's not leaving lawsuit

In Thursday morning courtroom testimony, Rep. Benjamin Nageak, D-Barrow, said he’s not giving up on his attempt to overturn an August primary he lost. “Yes, I do want to continue to be a party in this case,” Nageak told Anchorage Superior Court Judge Andrew Guidi by phone. Nageak, who represents House District 40 (encompassing the North Slope and Northwest Arctic Borough) is challenging the results of August’s Democratic primary. He lost that race, 825-817, to fellow Democrat Dean Westlake. With no Republican in the race, the winner of the primary wins a seat in the Legislature. Over the weekend, Nageak attorney Tim McKeever filed a motion to withdraw Nageak from the lawsuit and replace him with several North Slope voters. Under state law, an election challenge can be filed either by the losing candidate or by 10 voters. McKeever appeared to subsequently withdraw that motion, but the action left confusion about Nageak’s role in the case. On Wednesday, Nageak said under oath that he didn’t have a problem with voters taking his place as plaintiff in the lawsuit. “I can’t do anything with it,” he said. “I need help, and I think there’s people out there who can do that for me, to speak on my behalf.” “To me, the testimony was clear,” said Thomas Amodio, an attorney for Westlake. On Thursday, under questioning from assistant attorney general Margaret Paton-Walsh, Nageak said he was unable to properly hear the questions and answered incorrectly. Nageak, who has hearing problems and uses a hearing aid in the Legislature, had been testifying by phone from a restaurant in Massachusetts. “I’m sorry, I’ve been over on the other side of the world, and I couldn’t hardly hear anybody,” he said. “I was in a really crowded place yesterday, in the middle of the street, sirens were blaring, and I’m in a quiet place now. I don’t want to be dropped from the lawsuit.” Under further questioning, Nageak said he was not aware that his attorneys were filing a motion to drop him from the lawsuit. In subsequent briefs, McKeever said the request to change the list of plaintiffs “inadvertently omitted Benjamin Nageak from the caption and list of parties.” The state and Amodio have challenged that assertion, believing that Nageak wants out of the lawsuit, and the addition of voters was an attempt to allow him to leave while continuing the suit. The trial is expected to conclude Monday, with Guidi rendering judgment soon thereafter. Speaking to attorneys Thursday, however, Guidi said the case “is apparently inevitably bound for appeal” to the Alaska Supreme Court. James Brooks can be reached at  [email protected]

Nageak wants out of election lawsuit

An Alaska lawmaker suing to challenge the results of his August primary defeat said on Wednesday he no longer wants to participate in the lawsuit. “I can’t do anything with it,” said Rep. Benjamin Nageak, D-Barrow, in testimony given Wednesday morning in Anchorage Superior Court. “I need help, and I think there’s people out there who can do that for me, to speak on my behalf.” Nageak testified by phone from Massachusetts. According to official, recounted results from the Alaska Division of Elections, fellow Democrat Dean Westlake defeated Nageak 825-817 in the House District 40 primary. That district encompasses the North Slope and Northwest Arctic boroughs. No Republicans have filed to run in the district, meaning that whoever wins the primary wins a seat in the Legislature. Since late last week, Nageak attorney Tim McKeever has filed a confusing array of motions that first withdrew Nageak from the lawsuit, then reversed that decision and left him as one of the plaintiffs. Under Alaska law, an election can be challenged legally by “a defeated candidate or 10 qualified voters”. The original complaint against the state listed four district 40 voters in addition to Nageak. In an amendment dated Sept. 23, Nageak was removed from the lawsuit and seven district residents added as plaintiffs. Also added was Randolph “Randy” Ruderich, the former chairman of the Alaska Republican Party, who does not live in District 40. That amendment was subsequently reversed, and in court documents, Nageak remains the primary plaintiff alongside four North Slope voters. In an order filed late Wednesday, Judge Andrew Guidi, who is overseeing the case, said Nageak’s testimony “raises the issue of whether Mr. Nageak is a party plaintiff.” The judge said that if Nageak’s involvement remains confused, he will have to testify again at 9 a.m. Thursday. If the court accepts the plaintiffs’ substition, the lawsuit can move forward without Nageak’s involvement. Under state law, the plaintiffs face a steep challenge in overturning the results of August’s primary. They must not only prove mistakes, they must prove those mistakes represented “malconduct, fraud, or corruption on the part of an election official sufficient to change the result of the election.” Wednesday was the second full day of a trial held in an Anchorage courtroom, and the trial is expected to continue through the end of the week. Guidi has said he wants to reach a verdict in the non-jury trial by Oct. 3 in order to allow the Division of Elections time to prepare for early voting ahead of November’s general election.

Fiber-optic cable connects Juneau and Haines with 28,800 lanes

On a cloudy Friday morning, in a tent on a windblown beach near the ferry terminal here, Rick Chislett delicately fed a glass fiber the thickness of a human hair into a piece of electronic equipment. “The first one’s OK,” he said after a minute. “We can see Juneau.” For northern Lynn Canal, those little words mean a great deal. After spending nearly $11 million and years in development, Alaska Power and Telephone has completed a fiber-optic cable from Haines and Skagway to Juneau. The cable is the first fiber-optic link between Juneau and the northern end of Lynn Canal and the first significant undersea fiber link constructed by AP&T. When it begins operating in mid-October, it will bring faster, more reliable internet service to Haines and Skagway — and possibly to Juneau and the Yukon. “We’re on a country road here,” said Tom Ervin, AP&T’s project manager, of existing internet service in Haines. “This is a six-lane superhighway.” That’s more than a little understatement. Right now, Haines and Skagway are connected by a microwave communications link to Juneau, where large undersea cables link the capital city to the outside world. That microwave link is about 70 percent saturated, and the percentage is rising rapidly as residents watch more movies on Netflix, play more video games and stream more music on almost a daily basis. It’s a global trend, not just one in Alaska. “Our microwave network will be maxed out next year,” Ervin said. The limits of AP&T’s network are apparent when cruise ships visit. “What happens, when we get a cruise ship here, the whole town is down,” said Mary Crann, a Haines resident who stopped while walking her dog to watch the work. “You can’t get a phone call. It’s worse, too, when you try to call — you can’t make calls out of here.” Don Phillips has lived in Haines for 53 years and remembers when residents had to only dial four numbers to make a local phone call. He now works for AP&T and is looking forward to retiring in a year and a half. “Hopefully it’ll alleviate some backing up, like when the tour ships come in. You can’t hardly make a cellphone call,” he said. “This is a big deal. … It never ceases to amaze me: Something so fine can do so much, so I think this is really going to help out the town.”   Rainbows and highways AP&T, Alaska’s third-largest telecom company, serves about 40 communities statewide, and upper Lynn Canal is its heartland. “This is really where the demand is: Upper Lynn Canal,” Ervin said. On Friday, contractors from International Telecom, a firm based in Atlantic Canada, pulled AP&T’s new connection ashore. A ship — the Silver Arrow — rested just offshore, trailing a line of buoys demarking the cable, which was maneuvered by divers and a guide rope into a conduit that led to shore. An AP&T pickup truck slowly pulled the guide rope through the conduit and a manhole vault. Following was the cable itself. Laying alongside Haines’ Lutak Highway, it was unassuming, a one-inch diameter snake with barber-poled yellow and black stripes obscured by gray muck. It was heavy and tough, like one of the cables holding the Golden Gate Bridge, and International Telecom’s Kevin DeMont revealed its construction as he cut into it with a grinder. The classic image of a cable is a thin layer of insulation packed with wires. In a spray of sparks, DeMont revealed the lie. He tore away one layer of wound steel wire, then another. “See, Mother Nature is just so powerful that you have to armor it,” explained Rob Copp of International Telecom. “It’s wrapped in steel, all the way around. It’s like single strands going around it and around it and around it, so that even if somebody grabs hold of it by mistake and starts to pull it, it’ll protect it.” Below the layers of wire was a plastic seal, another layer of steel wire, a copper tube, then three colored strands slightly thicker than high-test fishing line. Delicately, DeMont and Chislett (also of International Telecom) used wire strippers to cut the strands apart, revealing individual fibers color-coded for identification. One at a time, even more carefully, they removed microscopic color-coding and cladding to reveal the hair-width glass fibers within. These fibers, only one-quarter of a millimeter wide, are why AP&T has spent millions. They’re the bones of the internet here, in Juneau and around the world. No other mainstream technology can carry information as effectively and in such large volume. When Chislett said he could see Juneau, his equipment could literally “see” flashes of laser light sent 71 miles to the capital city and returned to him. A traditional copper telephone line can send one channel of information — one telephone call per line. A fiber-optic cable uses wavelengths of light to send its information, and many wavelengths can be transmitted simultaneously. Imagine a sunbeam as one channel of information. That sunbeam can be broken into a rainbow — many channels of information. Each color is a different wavelength, but all are within that same sunbeam, transmitted at the same time. AP&T has the capability to use 40 wavelengths in a single fiber — and there are 36 fibers in AP&T’s new cable. If AP&T’s existing service to Haines and Skagway is a two-lane road, a single wavelength is a 20-lane road. A single fiber is an 800-lane road. The cable as a whole is a road with 28,800 lanes.   Planning and paying Michael Garrett is AP&T’s current chief operations officer and spearheaded the development of the Lynn Canal Fiber system. At the end of this year, Garrett will replace Robert Grimm as the company’s CEO. Grimm is retiring after 44 years in the role. Standing in Juneau’s airport before a flight to Haines to inspect the cable, Garrett explained that for AP&T’s customers, the cable means upgrades in speed. Right now, Haines and Skagway customers are limited to 8-megabit home connections. When the cable is turned on, AP&T will be able to offer up to 30-megabit connections, speeds equivalent to what ACS offers in Juneau. For the company, the new bottleneck will be in Juneau, where ACS and GCI own the southbound cables and AP&T must buy access — at a high price, Garrett said. The cable has so much capacity that AP&T plans to initially use only four of the 36 fibers within. The others will remain dark until the company’s next plan comes to fruition. Currently, Whitehorse and much of the Yukon Territory accesses the internet through a single, often-severed overland cable. Backhoes and forest fires have severed the connection at various times this summer. “We’re ready, you know. We’ve got a pretty good idea to get to the border, but it’s them guys that need to figure out the funding and politics to get beyond the NorthwesTel monopoly,” Ervin said. A link over the border from Skagway to Whitehorse would give the Yukon a second route for Internet traffic, making service more reliable and faster. “The potential to empower the lives and livelihoods of residents in this region is tremendous,” Garrett said in the company’s latest annual report. Juneau and the rest of Southeast Alaska could also benefit. This region relies on undersea cables to Southcentral Alaska and the Lower 48 for its ordinary telephone and internet service. In 2014, an undersea landslide, triggered by an earthquake, severed an ACS cable and caused outages. Had the Lynn Canal cable connected Juneau to Whitehorse, internet traffic could have been routed overland — there would have been no outages. While AP&T provides some home and business internet services, it ordinarily operates as a “middle mile” company, one that prefers to sell internet services to other companies, which in turn sell to ordinary consumers. To fully resolve the cruise-ship-caused cellphone problems, companies like AT&T or Verizon would have to buy more bandwidth from AP&T’s cable. AP&T is making a big bet that those companies are willing to do that. The cost of the cable is equivalent to almost one-quarter of its entire gross revenue in 2015. Last year, it obtained a $9.9 million financing option for the project, but the company’s annual report noted that AP&T had shouldered most of the project’s burden to that point. Ironically, buying the fiber is one of the cheapest parts of the project. The associated electronics and the cost of laying cable represent the lion’s share of the cost. Forty people were mobilized on Friday to handle the landing, 31 aboard the Silver Arrow, which is being leased at $100,000 per day. At Lena Point on Wednesday afternoon, cable started splashing into the water over the ship’s stern. By Thursday night, it had reached Haines. Work at Skagway was expected Saturday. “This is the easy part for us,” Copp said. “Getting here is the hard part: all the paperwork, all the permits. Us laying? Simple. Simple.” It appeared so on Friday. AP&T had scheduled an entire day to get the cable ashore, but the work was finished by 11:30 a.m. Hard work remains — the cable must be spliced into connections on land, and new electronics must be installed (they’re being tested in Wasilla already), but the end of the beginning appears to be here. “It’s always nice when things go like they’re supposed to,” Phillips said.

Begich out - not considering run for Senate

The Alaska Democrat who lost his U.S. Senate seat two years ago is not planning a return this year. On Thursday morning, Mark Begich used a morning Anchorage talk-radio program to announce that he will not conduct a write-in campaign for Senate this fall. “What the future holds is unknown, but at this point in time, I feel it’s not right for me,” he told KENI-AM 650’s Mark Rydell. This fall, incumbent Republican Lisa Murkowski is defending her seat from a constellation of challengers including independent Margaret Stock, Democratic candidate Ray Metcalfe and Joe Miller, who has been a shooting star over the past six years. In 2010’s Republican U.S. Senate primary, Miller unexpectedly defeated Murkowski. The incumbent responded by launching the first successful write-in campaign for U.S. Senate since 1954. Miller ran for Senate again in 2014 but lost to Dan Sullivan in the Republican primary. Sullivan went on to defeat Begich in the general election. This year, Miller is running as the Libertarian Party's candidate, having announced his campaign on the last possible date. When that happened, Alaska Democrats began calling Begich, urging him to run. Their thinking: Miller, running to the right of Murkowski, might siphon votes from the incumbent, opening the door for a candidate to the left. “I have had — since Joe Miller got into the race — you can imagine the conversation,” Begich said. Begich said he was “surprised and honored” by the calls and emails he received, but “I feel it’s not the right time for me and my family.” “Sometimes politics is timing, but you’ve got to manage these things very carefully,” he said. Rydell asked Begich if he would predict a victory for someone or endorse a candidate. “I think it’s Lisa’s race to lose, to be frank,” he said. Despite that, he said no one should underestimate Joe Miller, who appears to have learned a great deal since he was defeated by Murkowski in 2010. “If you listen to Joe Miller, Joe has a much more controlled presentation. He’s not like he was six years ago. I think that election gave him a lot to think about,” Begich said. “Low turnout favors Miller, and I think it’s going to be low turnout … on the other hand, Lisa has a pretty broad base, and you have two other candidates.” A popular belief among state politicos is that Begich will be among the challengers to Gov. Bill Walker when he comes up for re-election in 2018, and Rydell asked Begich directly about that. “We’ll let the cards play out,” Begich said in response. He also referenced an editorial published by the Empire urging his selection as Secretary of the Interior if Hillary Clinton is elected president. “Speculating on me is more speculating than speculating on the stock market,” Begich said about the editorial. While Begich made no firm commitments, Rydell believes a run for governor is in his future. “I imagine Walker’s people are pulling their hair out right now, because that’s what this implies,” he said after Begich hung up the phone.

State certifies District 40 election results but recount imminent

The official results are in: Dean Westlake has defeated incumbent Rep. Benjamin Nageak by four votes, 819-815. The official word isn’t likely to be the last word, however. “I can safely say they will ask for a recount,” said Maridon Boario, a staffer for Nageak, by phone on Tuesday afternoon. The four-vote margin is significant because five ballots from Nageak’s House District 40, which covers the North Slope, remain uncounted. The ballots, absentee votes from the village of Ambler, were received on time by local officials but had not arrived in Juneau to be counted by Tuesday. Why not just wait for them to arrive? “We did ‘just wait,’” said Josie Bahnke, head of the Division of Elections. Alaska statute 15.15.440 declares that “A(n) (election) certificate not actually delivered to the director by the close of business on the 15th day after the election may not be counted at the state ballot counting review.” That would have made the deadline Thursday evening, but Bahnke waited through Friday and Tuesday as a precaution. In that time, more than a dozen absentee ballots arrived (and were counted) from District 40’s Browerville precinct, allowing Nageak to close the gap to just four votes. In addition to the tardy Ambler ballots, the state still has not received absentee ballots from rural portions of the Kodiak archipelago, St. George Island, or Arctic Village. Alaska statute 15.15.440 gives the director of elections the ability to use his or her judgment to call the election, and Bahnke made that decision Tuesday. “We waited beyond the time we needed to, and I think due to the closeness of the primary, we had hoped to receive them today, but at some point, we had to draw the line,” Bahnke said. “I’m sure I’ll get criticized for my judgment on it, but we decided to wait after that (Labor Day) holiday weekend and we would reconvene.” Factoring into Bahnke’s decision is the fact that Ambler, close to challenger Dean Westlake’s home town, voted heavily for Nageak’s opponent on Election Day. Of the 36 known votes cast there, 33 have gone to Westlake. The five outstanding absentee votes would have to completely break from that trend in order to affect the result of the election. Nageak — or 10 registered voters in House District 40 — must send a letter to the Division of Elections to request the recount. Because the race is within 20 votes or 0.5 percent of the total ballots in the district, the state will pay for the recount. Bahnke said the division is prepared to conduct the recount within a day if requested. “I can’t predict that they’re going to request it (but) I’m expecting them to,” she said. Even though it’s just a primary election, the Nageak-Westlake contest matters because the winner will face no competition in the general election. Whoever wins here will join the Legislature in January. Nageak is a conservative Democrat who serves as a member of the Republican-led House Majority. In the primary, the Alaska Democratic Party and many traditional Democrats threw their weight behind his challenger. In November, Democrats hope to earn enough support in the House to force a restructuring of the majority, and replacing Nageak would be one step of that process. Republicans, meanwhile, have thrown their support behind Nageak in hopes of preserving their majority. In a statement Thursday, GOP chairman Tuckerman Babcock called the House District 40 election “illegal.” “Not only in Shungnak, but in the Barrow precincts as well, the process was so flawed that no one knows how the people really voted,” he said.

Telecom CEOs offer differing takes on Alaska economy

Alaska has two major telecommunications companies, each with its own target market, corporate strategy and — as was on display this week — belief in the future of Alaska’s economy. In the first week of August, General Communications Inc. and Alaska Communications Systems Group Inc. announced their second-quarter financial results, but what was more notable was their CEOs’ attitudes about the stability of Alaskan business in the wake of the Alaska Legislature’s failure to completely erase a multibillion-dollar budget deficit. “The governor and the Legislature have basically given up” on balancing the state’s budget in the near term, GCI CEO Ron Duncan told investors and analysts in a remarkably pessimistic phone call on Aug. 3. The following day, Alaska Communications CEO Anand Vadapalli showed a notably upbeat attitude toward the future. “We expect an acceleration of growth,” he said of his company’s forecast. The companies’ different views are a microcosm of the way Alaskans themselves are divided about what the state’s unresolved deficit means for Alaska. At current rates of spending, according to Gov. Bill Walker, Alaska will run out of savings to balance the budget by 2020. Even before that deadline, Alaskans will see economic impacts — the loss of the Alaska Permanent Fund Dividend being only the most obvious example. If nothing is done by 2020, the state will confront a choice between bankruptcy or enormous tax increases to balance the books. Lawmakers and the governor are expected to take action before that 2020 deadline, but the effect of spending cuts and possible tax increases is unknown: Will it trigger a 1980s-style Great Alaska Recession, or has the state diversified enough to shrug off a reduction in government spending? “We’re expecting the size of the market to compress rather than continue growing,” Duncan said. “We’re going to see some loss of population over the next several years up here.” For GCI, that would have a significant impact. GCI makes a large proportion of its money from individual consumers, people who buy cellphone plans and home Internet. Fewer Alaskans means less business for GCI. While AT&T has the most Alaska cellphone customers of any single provider, according to published figures, GCI is No. 2 and is No. 1 by far in home internet. Duncan was the founder of of Alaska’s Future, a coalition intended to pressure the Legislature into action to balance the budget. That didn’t work, and Duncan has now laid out a dim forecast. GCI is now cutting back its plans for new construction in 2017. Instead of spending $210 million on infrastructure, it now expects to spend between $158 million and $168 million. Duncan said he expects any effects of the Legislature’s actions (or lack thereof) to show up in the fall, but GCI is already seeing a rise in prepaid cellphone customers and a drop in postpaid customers, people who pay bills as a result of a defined contract. Prepaid cellphones are more popular among poorer Americans and those whose financial situation is unstable. Over the past year, GCI’s share price has declined from $19.06 per share to $13.70 per share. “We are seeing the state economy having an effect,” said GCI’s Chief Financial Officer Peter Pounds. Look through the lens of Alaska Communications, GCI’s principal Alaska-based competitor, and the view is different. Alaska Communications focuses on service to businesses, not individuals, and those sales grew 8.6 percent when compared to the same period last year. CEO Vadapalli said he expects to improve in the second half of the year. Because Alaska Communications doesn’t have “the same exposure to the consumer business that our competition does, there’s a difference in how we are positioned in the marketplace,” he said. Alaska Communications’ share price was $1.70 per share on Thursday, down from $2.12 per share a year ago. Vadapalli said that “without doubt, there are some tough choices ahead for the state,” but Alaska isn’t in the same place it was in the 1980s, when plunging oil prices caused a recession, a series of bank failures, and a collapse in housing prices. The state’s economy is more diverse, and there are more businesses in the state that are divorced from oil and government. That doesn’t mean those businesses won’t see some effects from a drawdown in oil and government, however. “From our perspective, businesses are really thinking hard and thinking out of the box” to mitigate those effects, he said. Thinking outside the box might include better integration into the Internet economy, online marketing or other things that Alaska Communications makes possible. “Frankly, as I like to say, when oil is $100 a barrel, there is no incentive for people to think differently,” he said. He referred to an Anchorage Economic Development Corp. report that called the state’s current economic situation a “pinch,” not a “punch.” “I believe that Alaskans and Alaska businesses are more resilient than people give us credit for,” Vadapalli said. “I have that confidence in us.” Contact Empire reporter James Brooks at [email protected] or 523-2258.    

Senate follows House's lead, adjourns special session with no budget fix

JUNEAU — Lawmakers have officially ended the fifth special session of the 29th Alaska Legislature. At 11:45 a.m. Monday, Senate President Kevin Meyer, R-Anchorage, dropped the gavel on the Senate’s session, following in the path of the House, which gaveled out on Friday. Under Article II, Section 10 of the Alaska Constitution, if the Senate had not gaveled out, it would have forced the House to return to Juneau for additional work. With the House unable to make progress on a fix to the state’s $3 billion budget deficit, that action had been considered unlikely. “It is disappointing … to stand ready to work and have our friends in the other body not be able to move forward,” said Sen. Anna MacKinnon, R-Anchorage. MacKinnon’s remarks followed those of Senate Majority Leader Berta Gardner, D-Anchorage: “To say I’m disappointed feels inadequate.” During the 29th Legislature second regular session and the two special sessions that followed ─ 157 working days in total ─ the Senate took the lead on most of the substantive bills passed by lawmakers this year. Medicaid reform, criminal justice reform, the state budget, reform of the Power-Cost Equalization program, reform of community revenue sharing and a new military code of justice came from the Senate before advancing to a divided House of Representatives. In their valedictory addresses Monday, senators said they accomplished much, even if they didn’t fix the state budget. Sen. Pete Kelly, R-Fairbanks, called that missing action a “cornerstone” piece of legislation. Sen. Dennis Egan, D-Juneau, declined to deliver remarks he prepared for the end of the session, but in a copy of the speech he provided to the Empire, he says he wishes “we’d have stayed to figure out how to pay for the stuff in the budget ─ long term. There was room to work on what the (Permanent Fund Dividend) amount should be. There was room to work on what the budget should be.” According to Gov. Bill Walker, the Legislature’s inability to pass a budget-balancing bill leaves Alaska, as of July 1, with 36 months of savings. • Contact reporter James Brooks at [email protected]  

Alaska has 36 months of savings remaining

JUNEAU — The Alaska House of Representatives has adjourned the fifth special session of the 29th Alaska Legislature. At 2:31 p.m., lawmakers agreed to leave Juneau after five days. House members held no committee hearings or votes on resolving Alaska’s $3 billion budget deficit, and they also failed to muster enough support to override any of the $1.3 billion in budget vetoes signed by Gov. Bill Walker on June 29. “Alaska’s indeed in a fiscal crisis. It’s epic. It’s huge, and we’re all in shock of it,” said Rep. Wes Keller, R-Wasilla, speaking on the floor before adjournment. While the Alaska Senate passed a measure to partially resolve the deficit by spending a portion of the earnings of the Alaska Permanent Fund, the House failed to even vote upon the approach, which failed in the House Finance Committee. As a result, at present rates of spending, the state of Alaska will run out of financial reserves in 36 months, according to an analysis presented Thursday by Walker. Earlier in the week, the House formally requested to meet in joint session to override one or all of Walker’s 41 budgetary vetoes. The Senate, which is controlled by a majority that favors larger budget cuts than the House majority, turned the invitation down. “We’re elected to get the job done. What we did ─ my personal opinion is we should’ve tackled each one of those vetoes veto by veto. I’ve got time to spend. That’s what we’re elected to do,” said Sen. Dennis Egan, D-Juneau and a member of the Senate minority. Speaking Friday, Senate President Kevin Meyer said Walker’s vetoes were actually what the Senate majority was seeking. “There were some advantages to the vetoes in the sense that (Walker) did actually reduce the budget,” Meyer said. The Senate is scheduled to meet at 11 a.m. Monday and is all but certain to follow the lead of the House and officially end the special session. Before Speaker of the House Mike Chenault requested to adjourn the House for good, representatives stood up and offered their thoughts on their failure to consequently address the deficit. With the primary election one month away and the general election less than four months distant, most of the remarks had the air of campaign addresses. “There’s political gain to throw different political entities and people under the bus,” said Rep. Lance Pruitt, R-Anchorage and a candidate for re-election. Several lawmakers laid blame for the budgetary failure on Walker, with Rep. Craig Johnson, R-Anchorage and a candidate for state Senate, issuing the hardest words. “In my opinion, Walker has stolen $1,000 from each and every (Alaskan),” Johnson said, referring to Walker’s halving of the Permanent Fund Dividend. Instead of $2,000 per person, the dividend will be $1,000 per person. Johnson said that cut is the equivalent of a regressive income tax. “It will suck the life out of our economy,” he said. Johnson also spoke about Walker’s comprehensive plan for erasing the deficit with mild tax increases and spending from the earnings of the Permanent Fund. “This governor has not proposed a fiscal plan. What he has proposed is a spending plan. More spending, more taxes, more government and less money in the pockets of Alaskans,” he said. Rep. Shelley Hughes, R-Palmer and a candidate for the state Senate, agreed with Johnson’s sentiment. “I think it’s a blessing in disguise,” she said of the budget crisis, explaining that it is forcing Alaskans to consider the correct size of government and may force them to pull together. Rep. Cathy Muñoz, R-Juneau and a candidate for re-election, took the opposite approach. “I think the governor demonstrated a great deal of courage in his actions,” she said. While she may not agree with all of his vetoes, she said she supports his restructuring of the Permanent Fund and urged her fellow legislators to “avoid the blame game.” Rep. Bob Herron, D-Bethel and a candidate for re-election, said the governor should have vetoed the entire dividend in order to force legislators to act. He added that he regrets that he didn’t get a chance to vote on each element of the governor’s plan. “We should’ve debated them all,” he said. “We should have voted on them all. You can defend a ‘yes’ vote. You can defend a ‘no’ vote. But indecision cannot be defended.” Pruitt, seeming to speak to Alaskans at home as well as his fellow lawmakers, urged them to keep hope alive. “The one thing that I want to ask of you … is don’t give up on Alaska,” he said. “Don’t give up on Alaska. Don’t give up on the process. Don’t give up on the people.” James Brooks can be reached at [email protected]


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