Piper Palin waves the checkered flag as she and her mother, Gov. Sarah Palin meet Todd Palin, left, and his teammate Scott Davis at the finish line of the 2009 Tesoro Iron Dog on Saturday on the Chena River in downtown Fairbanks, Alaska. The two completed the nearly 2,000 mile race in sixth place.The governor's national team finished second in November. (AP Photo by Sam Harrel)
by Mark Silva
Oil's not well in Alaska.
And that could mean a chill, baby, chill, for Gov. Sarah Palin.
The wire dispatch from Anchorage this morning notes that the governor's two years in office "have been called a time of milk and honey, when the resource-rich state was flush with wealth from record oil prices.'' But the second half of Palin's term "isn't looking so rosy, as Palin faces her first major financial challenge.'
The fall of oil prices presents a budget crisis for Alaska, "a late-entrant in the national recession,'' which could have political repercussions for the erstwhile GOP vice presidential nominee.
'Given these bad times, she's going to have a much more difficult time traveling outside Alaska," says Larry Sabato, director of the University of Virginia's Center for Politics. "When times are good, people will let their governor roam. In bad times, citizens expect their governor to stay home and work on solving the problems."
Oil accounts for as much as 90 percent of the state's revenues, the Associated Press notes. So the plunge of North Slope crude from an all-time high of $144.59 per barrel last July threatens to give the state an estimated budget shortfall of up to $1.5 billion in the fiscal year that ends June 30.
Palin, a self-styled fiscal conservative, has called for $268 million in state budget cuts. But some are questioning the cuts: The bulk of it, $200 million, is unspent tax credits for companies investing in oil and gas development being returned to the treasury.
Palin is also seeking to tap a $6.6 billion budget reserve to meet the deficit and has imposed a state hiring freeze that exempts public safety employees.
"It's a long way from Palin's early tenure -- particularly last year when the state's treasury was bloated with surplus money from the skyrocketing oil prices,'' the report notes. "From that bounty the hugely popular governor got the state to give $1,200 to most Alaskans in a one-time fuel relief payout that totaled about $740 million.
""The first two years of her term, upon reflection and looking over your shoulder, are going to be looked back at fondly," says Sen. Kim Elton, a Juneau Democrat rumored to be up for a post in President Barack Obama's Interior Department.
""The coming two years for Sarah Palin I think will be difficult,'' he says. "You test the mettle of people in hard times.''
Palin, who has not said if she will run for re-election as governor in 2010, calls dealing with the oil wealth actually her first significant challenge. It means making "sure that we were living within our means and putting money aside for a rainier day."
The state has socked away $1 billion in an education fund for the coming school year and plans to put another $1 billion in for future use.
""We're more prepared than other states because of the prudence there," Palin said recently. "We crossed that first hurdle."
Given Alaska's robust reserves, the state is well-prepared to weather the next two years, says Gregg Erickson, a longtime state budget-watcher.
""It depends on how much you draw from other places, how fast the budget increases and declines, the earnings rates on reserves that you have," he says. "And of course, it depends on how high or low oil prices are."
Bear Ketzler, city manager of the Yukon River village of Tanana, has a hard time envisioning Palin seeking reelection if the economy stays sour.
""She's kind of been moved up a couple notches and I could see her leaving the state and getting her profile up even higher on the national political level," Ketzler says. "But I think for her to be electable in four years, Obama would really have to screw up."
The Associated Press provided this report.
Comments
I know Palin called for a veto of the stimulus on Greta, but could she eventually flip-flop when she sees her state left out of funds like Mark Sanford's South Carolina? Depends on how much pressure Alaska lawmakers and citizens put on her.
http://www.political-buzz.com/
Posted by: matt | February 17, 2009 7:51 AM
As a great example of the classic American feminist "hockey" mom, Sarah will be just fine. When you hunt and fish for your own chow and use coupons, like many of us, she understands the value of a budget. And she really dresses cool, so why the skepticism? Oh, right, she is a conservative and the MSM are fearful of her position and influence. Gotta love it!
Posted by: Bubba Porter | February 17, 2009 8:45 AM
Don´t worry about Palin, it´s tough not being able to leave Alaska and all, but she has been known to lie and GET to that party after all!. She´ll do just fine!
Posted by: DEO | February 17, 2009 8:56 AM
Interesting the snarky attitudes still against Gov. Palin. It's too bad the same scrutiny doesn't occur with the disasterous democrat governors of Virginia, Maryland, Kansas, any state with a democrat governor can be considered a disaster area. Exception being California because Arnie can't overcome the democrats there.
Posted by: Al | February 17, 2009 9:10 AM
Sure Bubba; only conservatives fish and hunt and use coupons.
I hope Bruce has the decency to thank Mark for posting this nice story about a Republican.
Posted by: Flo | February 17, 2009 9:26 AM
I commend Palin on her fiscal conservatism.
My doubts about the extent of her managerial experience stem from the fact that she is governor of a state like no other. Alaska is in most respects a fully "funded" state because of its oil revenues. The other 49 states don't have the option of squirreling away excess oil revenues for a rainy day. They have to make very real and very unpopular decisions to trim spending and increase taxes sometimes. Nor have they ever had the opportunity to issue a large "dividend" across the board for excess funds.
I think you be hard pressed to find any other state that has been able to put away $2 billion for a rainy day. It would have had to come from taxes. Certainly not oil.
Posted by: Todd M | February 17, 2009 9:40 AM
I like her.
Posted by: Wasilla Meth Head | February 17, 2009 9:59 AM
The only solution to Alaska's predicament:
Drill
Baby
Drill
Posted by: a blinkin | February 17, 2009 10:10 AM
Drill baby drill, was first said by Michael Steele. Sarah used it on the stump but it nice to see her get credit for it especially when used in a derogatory manner. It was Tina Fey who said, 'I can see Russia from my window", not Governor Palin. But the brain dead new socialists continue to call her a liar without example. Such is the way of stupidy.
Posted by: dukas | February 17, 2009 10:42 AM
So, Alaska has a $6.6 BILLION reserve. Low taxes too. In fact, Alaskans received a $1,200 refund last year.
Here in Illinois, the budget is way out of whack, and has been for years. Taxes are high and going higher. We have the highest sales tax in the nation. Among the highest gas taxes in the nation. Yet, our roads are deplorable. The state is badly in debt and Illinois pols are looking to increase the gas tax 12 cents a gallon AND raise the state income tax.
Illinois is run by Democratic liberals. Oh and corruption is rampant here.
Yet, the Left belittles Alaska and keeps quiet about Illinois??
Posted by: John D | February 17, 2009 11:08 AM
Dukas: The point, of course, is that Republicants like Steele, Palin, McCaint and your hero Joe the Plumber all insisted that drill baby drill was the solution to all the country's woes. Sure as night follows day, they were wrong about that. Take Steele out of the mix and there are exactly zero functioning brain cells among the other three.
Your partner in cluelessness, the erstwhile deadender John D., demonstrates yet again his incapacity for irony, pointing out that Alaska had reserve BASED ON OIL ROYALTIES WHICH HAVE EVAPORATED BECAUSE OIL PRICES DROPPED, THUS CREATING THE VERY PROBLEM NOTED IN THE STORY. If your fortunes rise and fall with the price of oil, you are merely a bobber floating around in the current, not the strong executive that the religious freaks falsely portray nitwit Sarah to be.
By all means --- please please please -- let Palin be the GOP POTUS candidate in 2012. She'll lock up the moron vote and that's about it.
a manager. Beloved Sarah -- among the dumbest public figures in recent memory -- is not a particularly good manager at all. She's wholly dependent on something beyond her control. It's not surprise John D. is too dense to appreciatemerely
Posted by: a blinkin | February 17, 2009 11:48 AM
dukas,
Example A:
http://www.youtube.com/watch?v=JXL86v8NoGk
Posted by: Bubba ✔ | February 17, 2009 11:53 AM
Fun to see how much Mark Silva and other left wing media are afraid of the possible candidacy of Sarah Palin in 4 years. The new Pelosi film captures the magic Palin had in attracting crowds of tens of thousands, people who stood in line to hear her. Unlike Obama, Palin is real, not a manufactured mannequin who can read a TelePrompter and do nothing else. So, look for anti-Palin story after story from what's left of the Tribune Washington bureau.
Posted by: Daryl | February 17, 2009 12:15 PM
Daryl,
You don't get it. We want Palin to come out of the primaries in 2012. Please, please, please keep her in the spotlight.
Her "realness" is what we all get such a kick out of.
Posted by: Bubba ✔ | February 17, 2009 12:36 PM
Fine Daryl; you and Bubba Porter can go have a beer with her or whatever; nice that she's "real." As President, though, we need someone with the brains and leadership to get us out of this mess.
Posted by: rupert | February 17, 2009 12:39 PM
the Left belittles Alaska and keeps quiet about Illinois??
Posted by: John D | February 17, 2009 11:08 AM
After you learn how to read, take a look at the front page of this morning's Chicago Tribune. That's not exactly "keeping quiet", is it?
Posted by: BC | February 17, 2009 12:51 PM
You see an "anti-Palin" story, Daryl? It's not a negative story, and nobody's afraid of her.
Posted by: mort | February 17, 2009 1:06 PM
I still can't believe these conservatives are still falling for this "hockey mom" line of bull.
She's a career politician, get real, people.
Posted by: OhCrapIHaveACrushOnSarahPalin | February 18, 2009 8:25 AM
daryl says: "Unlike Obama, Palin is real, not a manufactured mannequin who can read a TelePrompter and do nothing else."
I have no idea where you get that idea. The consensus of normal people in the US, has been exactly the opposite. Saying she's a hockey mom, talking about "Joe the Plumber", having her makeup absolutely perfect, wearing expensive clothing, getting just about everything she said wrong, etc. doesn't make her "real" (unless those are the characteristics you consider "real"). She's a former beauty queen who didn't grow much beyond that whole environment, "running" the easiest state in the US to govern. Obama went to law school, is very well-educated, and thinks on his feet (he uses a teleprompter no more and no less often than Palin, McCain, etc.--it's a standard tool of the business)--if you consider these the characteristics of a person who isn't real ("too smart"?), then you seem to favor putting into office the type of person who resembles (or is) the slightly loony person in one's neighborhood who often engages in paranoid babbling. Those people aren't "real", unless you consider "not qualified" as being "real" just because there are more unqualified people than qualified. I don't want someone unqualified to be running anything, simply because they're unqualified and therefore considered "real" by their confused compatriots.
Posted by: John Sawyer | February 19, 2009 5:13 AM