Let Alaskans vote on oil tax overhaul

By Bill Walker

The fight for Alaska statehood took 88 years — from the purchase of Alaska from Russia in 1867 to our Union admittance in 1959. During this time, Alaskans suffered one form of exploitation after another.
We were denied the right to vote on federal issues, even though our young men were conscripted into the U.S. Army and fought three major wars.
Congress passed a law denying Alaska the right to ship goods using foreign carriers at the urging of Seattle shippers who charged outrageous rates once their monopoly was ensured, crippling the young Alaska economy.
Our fisheries, then Alaska’s greatest natural resource, were severely depleted by Outside interests over the persistent objections of Alaskans, causing the near collapse of our coastal economies.
And big money Outsiders like JP Morgan and the Guggenheims mined our resources for decades, leaving virtually nothing behind when they pulled out.
This theme repeated itself endlessly, with the pillaging of Alaska resources without fair compensation and the drafting of laws to benefit Outside interests at the grave expense of the Alaskan people.
The same thing is happening today as Alaska unfortunately transitions from an “owner state” to an “owned state.” With the passage of Senate Bill 21, the North Slope leaseholders have convinced Gov. Parnell and some legislators to dramatically reduce taxes to maintain their investment in Alaska, even though their leases — legally binding contracts — require them to produce Alaskans’ oil when they have a reasonable expectation of profit.
And, their profits have been far beyond “reasonable.” They have earned a staggering $36 billion since the former tax regime, Alaska’s Clear and Equitable Share was put in place in 2007.
While other states have struggled with deficits and the effects of recession, Alaska has prospered, making unprecedented investments in our own economy and saving billions for the future. That is thanks to a tax system that made us partners with the oil industry.
Yet the leaseholders have threatened they will exit Alaska without tax “relief,” even though their earnings in Alaska far outpace their earnings elsewhere, barrel for barrel.
What they don’t highlight is that jobs on the North Slope are at an all-time high, or that since 2007, they have invested in Alaska at record levels.
They also don’t reveal there are more oil companies doing business in Alaska than ever before, thanks largely to ACES which struck a business deal that benefited all parties. It gave companies the option of reinvesting their profits in Alaska in exchange for paying reduced taxes.
Some adjustments to ACES tied to production and investment were warranted. But the governor’s wholesale giveaway without any commitments in exchange was a remarkable shift in state policy; one that took us overnight from a budget surplus to a deficit.
Then Senate President Gary Stevens (R), in December 2011, discussed the failed tax reduction predecessor bill (HB 110) to SB21 at Commonwealth North.  He stated that the senate demanded of the Parnell administration to “show us the proof that we get something out of giving up billions” and proof was never presented. He contrasted this to Gov. Jay Hammond (R), who recognized that the jobs of the oil companies’ CEOs were to maximize benefits to shareholders, while his as Alaska’s CEO was to maximize benefits to Alaskans. Stevens also noted that international oil consultant, Pedro Van Meurs, had indicated that Alaska’s oil tax rates were not out of line and significant changes in its taxing structure were not needed.
In his 1994 State of the State address, Gov. Walter Hickel warned, “But to the next generation say, let this be your rule:  ‘Let no special interest own you. Let no special interest divide you.’”
More recently, Sen.  Bert Stedman (R) said it well: “I think it is important that the people of the State of Alaska get to vote on this issue. It’s their oil, and as owners of basically all the subsurface gas, they have a right to make sure their views are represented.”
If Alaska is to remain an owner state, let Alaskans as resource owners vote on this major tax policy overhaul that passed the Alaska Senate by a single vote.

Bill Walker is a lifelong Alaskan, businessman and owner of an Anchorage law firm that focuses on oil and gas and municipal law. He recently announced his candidacy for governor in 2014.

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Posted by on Jul 9th, 2013 and filed under Point of View. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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