Alaska’s ‘owner state’ concept is at stake

By Frank Mullen

A nonpartisan group of Homer people have organized a “March for Alaska” event on Saturday, June 14. Our group is concerned about recent changes to oil taxation in Alaska as enacted by SB 21. We believe the former tax structure of ACES provides more fairness to Alaskans.
Senate Bill 21 was enacted by a slim majority in last years’ legislative session. Even legislators who work directly for oil companies were allowed to vote in support of their companies’ higher profit margin. Those in support of SB 21 promise more jobs and more oil in the pipeline. Problem is, the promise is not in writing, and is simply a political statement that is subject to the whim of the wind. Thus, the entire concept is suspect, because there is no performance guarantee.
Soon after SB 21 passed the Legislature, a grassroots group of Alaskans hit the street with petitions that would provide for a vote on the issue. At stake is the “owner state” concept promulgated by former governors Hickel and Hammond, and by current candidate Bill Walker.
The idea is simple: Alaskans own the oil and ought to receive a fair benefit from the sale of it to oil producers. The “Vote Yes” group rightfully calls SB 21 a “giveaway,” because Alaskans’ share of revenue on the oil is being significantly reduced, with no guarantee of more production or more jobs in return. Alaskans are simply being taken advantage of.
Talk to any legislator, and you will learn that dramatic budget cuts are on the near horizon. The unwarranted gift to oil companies by the Legislature is projected to reduce income to Alaskans in the range of $2 billion per year when compared to the income that would have been received under the former ACES model.
Future Alaska budgets will have to be trimmed dramatically. Education, roads, capital projects (and associated construction jobs) will suffer, while the richest corporations on the planet create more profit for their shareholders.
Will the Legislature be forced to raid the permanent fund? Possibly.
Future state income tax? Maybe.
People may have noticed the ambitious television campaign by the oil companies urging you to “Vote No” in the initiative. They brag about all the activity on the north slope and all the job activity. The truth of the matter is, activity on the North Slope that is being conducted in 2014 was on the drawing board and in the planning stages years ago.
Ever wondered why three or four major contributors would amass a war chest in excess of $10 million to flood the airwaves urging you to “Vote No?” Could it be that their bottom line will improve dramatically if SB 21 remains the law of the land? (At the unnecessary expense of Alaskans.)
There is a disconnect between the goals of Conoco, Exxon, BP and others when contrasted to the goals and dreams of Wally Hickel, Jay Hammond and many Alaskans. The goal of the oil companies is to retain as much profit as possible for their corporation. I don’t say this in a particularly negative way, it is the nature of corporate bylaws all across the country. In contrast, the goal of the State of Alaska should be to retain as much benefit for its citizens as possible. These contrasting goals are at stake on Aug. 19, when initiative No. 1 appears on the ballot.
If you care to learn more, or would like to help our grassroots “Vote Yes!” campaign, please join us at WKFL Park in downtown Homer on Saturday, June 14. (Alaska Flag Day) at 11 a.m. Vic Fischer, one of the last living authors of the Alaska Constitution, will speak to us, and a “March for Alaska” will head down Pioneer Avenue to the Legislative Information Office building. Music, good company, and an opportunity to show support for Alaska will be provided. Please join us!

Frank Mullen was raised on an Alaska homestead and is a Financial Planner and Commercial Fisherman who lives in Homer.

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Posted by on Jun 10th, 2014 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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