Alaskans Face an Important Choice
Letter to the Editor
We Alaskans face an important choice when we go to the polls in August’s primary election. That’s because we will in large part decide our state’s economic future. The decision is whether the state should return to the old oil tax structure that threatened our economy or keep newly passed law that offers the very real hope of a bright future.
For more than 30 years I have made my home in Alaska, and my husband, Mike, was born and raised here. We are now raising our two sons here and enjoy fishing, snowmachining and family gatherings. Alaska has been good to our family.
Before joining the management team at Alaska Communications, I was president of Carlile Transportation Systems, which has nearly 750 employees, and am now the chair of the Alaska Railroad board of directors. I serve on the Rasmuson Foundation board and am involved in the University of Alaska Anchorage’s logistic and business masters programs.
It has become clear to me that Alaska’s economy must be vibrant and growing to support and encourage business and education in the years ahead to ensure our future. That means we need our partnership with the oil industry to stay healthy and growing, because it underpins our entire economy.
After all, about half of Alaska’s economy and a third of its jobs, directly or indirectly, depend on oil, according to University of Alaska Anchorage research.
The old tax contained punitive provisions that drove away new investment on the North Slope. It contributed to an incredible marginal tax rate of more than 90 percent at high oil prices. The North Slope companies shifted their investment dollars elsewhere where the tax climate was more attractive. That means Alaskans missed out on new jobs and opportunities.
The old tax was so bad that while oil production surged everywhere across the nation - in places such as North Dakota and Texas - it lagged here. Largely because of the old tax, the amount of oil flowing through the trans-Alaska oil pipeline continues to drop at a rate of six to eight percent a year. With 90 percent of the state’s unrestricted revenues coming from the oil that flows through that line, that should cause all Alaskans to pause.
The Legislature last year created a new tax structure to undo the mess and spur North Slope investment and production. The good news is that change is having the desired effect. Activity on the North Slope is booming. Oil companies are pursing projects that have been on the shelf for years. New drilling rigs. New jobs.
For the first time in years the state recently announced that oil production levels exceeded projections, and, yes, oil tax revenues are up too, and next year, revenues are projected to be greater due to oil tax reform. All that is good news for Alaskans.
But all that progress is threatened by the move to return to the old tax system, an effort spearheaded by those who would rather tax private industry to the maximum now while ignoring Alaska’s future.
Returning to the old tax also would mean the end to any dream for a large-diameter export gas pipeline and the jobs and economic boost it would bring.
Alaska needs a healthy economy, sustainable state budgets over the long haul and a vibrant, growing oil industry to ensure future generations of Alaskans will be able to enjoy the same quality of life we have long enjoyed.
To ensure all that, Alaskans should vote “no” on Ballot Measure one.
Linda Leary, Eagle River, Alaska
Posted: April 24, 2014