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Rep. Les Gara ACTION ALERT: Public Testimony On Oil Tax Bill In Senate Tonight/Wednesday )


Dear Neighbors

The Bi-Partisan Senate Majority has written an alternative tax bill to the Governor’s proposal, and is taking public testimony tonight and Wednesday evening from 6:00 to 8:00 pm.  To testify, you have to go to your local Legislative Information Office (716 W 4th Ave in Anchorage). 

My Concerns; Senate Solutions: I have written extensively about my concerns on the Governor’s bill, which allows companies to reduce the share they pay Alaskans in oil taxes by $1.8 billion/yr.  That bill specifically allows them to take that money to spend outside Alaska.  A newsletter and PowerPoint I presented on these issues are linked here if you’d like more information.  This issue does not just affect oil production.  It affects whether we’ll have the money to pay for construction, roads, infrastructure, school, health care, and a vibrant university and job training.  Giving money away and depleting our savings for an ill-conceived tax bill is a sound bite we just can’t afford.

I applaud the Bi-Partisan Senate Majority for taking the time to write a better bill, which is still being written through the amendment process this week.  Had they jumped on the Governor’s bandwagon last year, they would have done so based on very faulty information.  We all agree we can make a few smart changes to help increase oil production.  But the Governor’s bill is little short of an annual $1.8 billion giveaway that trusts companies not to take their rewarded tax breaks and spend them outside Alaska.  Last time we had low taxes in 2006, companies did just that.  They invested 40% less than they do now, and hired 40% fewer people on the North Slope, and we had the same decline rate on oil production we do today.  Simply lowering taxes across the board doesn’t work, and never has in Alaska.

Senate Proposal Still Evolving: In short, the Senate bill right now simply lowers taxes at only very high prices, where companies can make a case they are overtaxed.  I said that publicly this summer.  But the Governor’s bill lowers taxes substantially at low prices, average prices, at high prices, and gives tax breaks for in-field work companies were going to do anyway.  Amendments may be taken up later this week.

Inaccurate Administration and Oil Company Information That “Supported” Governor’s Bill.  So, what has the Senate found out in terms of more accurate information by waiting?  Last year the Governor and oil companies were inaccurate on the following points, and it is good the Bi-Partisan Senate Majority has looked into these issues this year:

  1. Refusal to Do New Exploration Even If Governor’s Bill Passes: Commissioner Butcher stated one of the two main goals was to get new oil production out of new, unexplored fields.  We need new oil from new fields, period.  Well, in response to my questions in the House Finance Committee (see PowerPoint), Exxon and BP stated that if the governor’s bill passed, they would do no new exploration.  ConocoPhillips has already committed under current law to new exploration in NPR-A, which is moving ahead.  But they too committed to no additional new exploration.
  2. The oil industry keeps posting TV ads misleading you that jobs are down on the North Slope.  Well, the Department of Labor has confirmed that oil and gas jobs in Alaska are at an all-time, or near an all-time high (depending on the month).
  3. Commissioner Butcher claimed those jobs were not oil production related.  Well, his own internal document from 2010 concedes they are largely production-related. 
  4. We have the busiest exploration season on the North Slope in decades underway the next two years.  Last year the Administration denied that.
  5. Oil company officials threatened the pipeline was on the verge of shutting down if we didn’t do something now.  Well, BP internal documents prove that BP intends to run the pipeline through at least 2065.

So - I hope you will testify.  Or send in your comments to sen.joe.paskvan@legis.state.ak.us and sen.tom.wagoner@legis.state.ak.us and ask that they be distributed to the Senate Resources Committee.

Finally, a bill we have worked on for many years to improve and protect the right of Alaskans to access their public fishing streams passed the legislature yesterday.  Here is a link to yesterday’s APRN radio story.

As always, call if we can help.

My Best,

Rep. Les Gara

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