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Monday, February 19 2018 @ 12:45 AM AKST

Mayor Halter Asks for Fair Share in PILT

Energyby Patty Sullivan, MSB

Up to $15.7 billion over 25 years, potentially is on the table, from projected taxes on the proposed 806-mile natural gas pipeline from the North Slope to Nikiski. On Jan. 15, Matanuska-Susitna Borough Mayor Vern Halter joined the table of mayors and finance officers from Alaska cities and boroughs and State staff to defend an equitable share for the Mat-Su and others.

“I just think the value of this amount of money spread over the state is more important than one or the other of us doing really well,” Mayor Halter told his peers at the table.


Called the Municipal Advisory Gas Project Review Board, the 12-member group is trying to agree on how to divide up the projected taxes. The group is only advisory, but the body’s findings will have the weight of major municipal stakeholders behind it when it reaches lawmakers in Juneau. The State’s Dept. of Revenue is the lead agency helping facilitate the review board.

Among the proposed gasline infrastructure in the Mat-Su, 179 miles of gas pipeline would be built across Mat-Su Borough land if the gasline project makes its way to Nikiski from the North Slope.

The money accessible by Alaska communities would be construction impact fees, up to $800 million, and a flow related Payment in Lieu of Taxes, also known as PILT, on the gas moving through the pipe, which is the already mentioned $15.7 billion over 25 years. The State will likely receive a significant portion of the allocated taxes.

Tax allocation models are being drawn up and evaluated by the municipal board that would distribute annual payments from the Alaska LNG, Liquefied Natural Gas, project to the State and local municipalities. One such model was introduced by the Mat-Su Borough Jan. 15 that would add a consideration for population as a factor.

Borough Auditor James Wilson developed the model and has refined it even further than the one posted on the State’s webpage.

“I wanted to make sure all Alaskans share in the resources of the State,” Wilson told the review board.

Mat-Su Borough Assembly Members Randall Kowalke and Jim Sykes supported the Mayor and Auditor Wilson in the efforts to introduce the new PILT allocation model.

Kowalke said it’s critical for the Borough to be involved.

“There’s $15.7 billion dollars at stake. The Borough has little less than 200 miles of pipe within the Borough, proposed two stations, equivalent pump stations that we will have within the Borough. Part of the balancing act— certainly Fairbanks is going to have a large impact but have only two miles of pipe. So if you’re going to base the model on just pipe that doesn’t entirely work for everyone. That’s the difficult part of what we’re trying to sort through, ” Kowalke said.

Sykes laid out the two components of the Borough’s proposal.

“This is about allocation because there’s only so much money that is going to be paid. And so we try to make sure there’s fairness, and the proposal we are bringing forward for discussion…it involves population effected and the amount of infrastructure.”

Previously a model contained considerations for infrastructure only.

The mayors’ review board is moving closer to a final agreement that they can present to state legislators, who have the final say.

From the other pot of money, up to $800 million in impact fees also would be doled out. An example of an impact fee would be money to a borough for an increase in salaries. In Fairbanks, during the oil pipeline construction, government salaries went up 75 percent, Fairbanks Mayor Karl Kassel told the review board, because the oil pipeline project lured workers away. He said Safeway had to hire 70 people in one month to keep 70 on staff due to the beckoning higher wage elsewhere. Other redeemable costs for impacts, from a long list, include the construction of new electrical plants and medical facilities due to an increased population.

The review board has documents posted and more information on the State website at

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