In Alaska, Bipartisanship on the Ballot

By: - August 24, 2012 12:00 am

The Alaska Senate’s Bipartisan Working Group has kept peace in the chamber by avoiding hot-button issues. But some critics say the Working Group has obstructed major legislation, such as a tax cut for North Slope oil producers. (AP)

By many measures, both Congress and the American people themselves are more divided along party lines than at any time in recent history. The long list of bitter conflicts across the country over the last two years—from Minnesota’s government shutdown to Wisconsin’s unsuccessful gubernatorial recall election—shows that state capitols aren’t immune to the trend. For that reason, the Alaska Senate stands out.

Alaska’s 20-member Senate is governed by a coalition known as the Bipartisan Working Group. It includes a supermajority of six Republicans and all ten Democrats—only four Republicans serve in the minority. Bipartisan coalitions in legislatures usually lose their hold on power quickly, but Alaska’s Working Group has lasted for six years worth of legislative sessions. Supporters tout it as a moderating force in Alaska politics.

Yet not everyone in Alaska is happily singing “Kumbaya.” GOP Governor Sean Parnell and the Republicans who hold the majority in the Alaska House complain that the Senate’s Working Group has obstructed vital legislation. For the last two years, Parnell’s top priority has been an oil tax cut intended to reverse declining oil production on the North Slope, but the Senate has resisted the cut. With 19 of Alaska’s 20 Senate seats on the ballot this year, Parnell and conservative activists see an opportunity to elect a new Senate majority made up of Republicans who are less interested in cooperating with Democrats.

Tuesday’s primaries and the November general election likely will determine how the oil tax debate—a debate with multi-billion dollar consequences for the state, its economy and the oil industry—will be resolved. More broadly, the elections will represent a test of the appeal of bipartisanship in an increasingly partisan time.

Working together

The bipartisan Working Group began with a power play. In November 2006, when Republicans held an 11-9 majority, Lyda Green, a conservative and the most senior Republican in the Senate, became Senate president by soliciting Democratic support.

What Green created in 2006 wasn’t a bare majority. It was closer to a grand coalition. When Green joined with the Democrats, she brought four other Republicans with her. Soon after, another joined. The Republicans remained Republicans and the Democrats remained Democrats, but they worked together to organize and run the Senate. Green ruled with a light touch. For example, she didn’t attempt to block a 2007 overhaul of oil taxes—the biggest issue of the year—from coming to a vote, even though she opposed it.

That set a precedent when, after the 2008 elections, bipartisan governance of the Senate became a necessity. Democrats pulled into a 10-10 tie with Republicans and the chamber has been split evenly since. Republican Gary Stevens became Senate President after Green retired in 2008, but Democrats chair or co-chair many committees.

Green’s strategy wasn’t unprecedented, but it has proven to be unusually durable. In 2009, Republicans seized control of the New York Senate by wooing two Democrats to vote with their side, but both Democrats switched back within a month. Similarly, in 2009 49 Democrats in the Tennessee House of Representatives elected Republican Kent Williams as speaker, overcoming the opposition of the House’s other 49 Republicans. But Williams was quickly excommunicated from the GOP, and the arrangement only lasted two years.

Alaska Senator Bill Wielechowski, a Democrat, says his state’s bipartisan coalition has flourished by focusing on relatively non-controversial topics such as energy affordability and home weatherization. It has avoided debates on hot-button issues such as abortion and the role of labor unions, debates that erupted into fierce political conflict in Wisconsin, Indiana and Ohio. “It’s actually worked amazingly well,” Wielechowski says, “better than anyone could have expected. We work together. We really work hard to take off the table things that appeal to the ideological side of both parties and focus on what’s best for Alaska.”

Oil crisis

To critics, though, what’s off the table is the problem—with nothing bigger than Governor Parnell’s oil tax plan.

No state is as dependent on any single revenue source as Alaska is dependent on taxes from oil production. Because the state lacks a personal income tax or a sales tax, oil taxes represent about 90 percent of the revenue the state collects.

One of the key changes in 2007 was to make the oil production tax more progressive. When the value of a barrel of oil rises, the tax rate rises too. With high oil prices over the last two years, that structure has produced a bonanza for the state’s bottom line. Alaska has socked away billions of additional dollars in its reserves, which were already the largest in the country. Standard and Poor’s upgraded its credit rating to AAA in January, the highest level.

The positive news, though, has masked what many lawmakers across party lines consider a looming crisis. Oil production in Alaska peaked at over 2 million barrels a day in 1988 and, with only one exception, has declined every year since then, hitting 613,000 in 2011. “Oil funds Alaska and everything we do,” says Heather Brakes, Parnell’s legislative director. If you include government jobs funded by oil taxes, 30 percent of jobs in the state link back to the oil and gas industry.

Parnell contends that oil tax cuts will help reverse the production decline. Among other things, Parnell’s plan would reduce the extent oil tax rates rise along with oil prices. Oil companies have pledged to commit billions of dollars to new production if Parnell’s plan passes. “They came to the table and they said we want to do business here, it’s costly to do business here,” Brakes says, “and a more favorable tax environment would keep us here and keep us producing.”

The House passed Parnell’s plan, but a majority of the Working Group has repeatedly blocked it. The industry’s commitments notwithstanding, many senators complained that the oil companies would receive the tax cuts whether they increase production or not. “It would bleed our savings dry within eight to ten years,” Wielechowski says. “The big problem is that there are no strings attached.”

Coalition at risk

This disagreement has turned the primary and general election into a referendum on oil tax cuts. Oil companies are spending heavily to elect sympathetic legislators, while unions and other groups that are part of Alaska’s long tradition of fighting oil industry influence are defending the Senate majority. But the elections are also a referendum on the Working Group itself.

Senator Linda Menard is a conservative Republican who was one of the few members of the Working Group to endorse Parnell’s oil tax cut. But her membership in the group has helped prompt a challenge from the right in one of the hottest primaries in the state. “It’s partially why I’m running,” Mike Dunleavy, Menard’s opponent, told the Anchorage Daily News in July.  “I don’t believe the coalition represents the constituents. I think it represents itself.”

In the years since the Working Group formed, the Tea Party has arrived as a political force in the state. Republican activists and Republicans leaders increasingly believe that sharing power isn’t a triumph of comity, but a missed opportunity.

Senator John Coghill, the leader of the four-member Republican minority, criticizes the Working Group for stifling not only the oil tax plan, but tort revision and abortion restrictions too. “The question in Alaska,” Coghill says, “is do you want a more conservative approach to government or a more liberal approach?”

After the 2000 census, Democrats controlled legislative redistricting in Alaska, which is one reason the party was able to pull into a 10-10 tie in the Senate in a state that has 135,000 registered Republicans and only 72,000 registered Democrats. After the 2010 census, Republicans were in charge of drawing the district maps. As a result, many Democratic incumbents face tough races—and the future of the Working Group is in doubt. In one contest, two members of the Working Group, Democrat Albert Kookesh and Republican Bert Stedman, were drawn into the same district, guaranteeing a loss for the coalition.

Yet people who follow the Senate closely, from Coghill to Democratic pollster Ivan Moore, a Working Group defender, say it’s too early to count out the coalition. Even if Republicans win a majority of seats in the Senate, key Republicans such as Stedman and Senate President Gary Stevens may not want to see the bipartisan experiment end—an outcome that would make Parnell’s tax plan more likely to pass. “Really, the question becomes will it still be a 10-10 split,” Moore says. “Realistically speaking, I doubt it will. I think the most likely split at the end of the day will probably be a one or two seat Republican majority, but that doesn’t necessarily mean the death knell of the Working Group.”

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Josh Goodman

Josh Goodman helps lead research on fiscal management and place-based economic development programs as part of Pew’s state fiscal health project. Goodman has served as a primary author for Pew studies that examine how states should evaluate tax incentives and maintain budget discipline when implementing those incentives.