By MURRAY WALSH
I have been watching the initiative process in Alaska for 44 years. Each and every one of them has been based on hate or greed.
Ballot Measure 1, on the ballot this coming Nov. 3, is based on both. This is the proposal to increase the tax burden on the major oil operators in Alaska. Alaska already has a high tax on produced oil, nearly the highest in the world.
Ballot Measure 1’s sponsors are from two camps: political operators who want the state to have more money to spend and do not believe the golden goose will be overly bothered (the greed side); and, enviro-climate activists who want to terminate the fossil fuel industry (the hate side.)
The reality that the long-term interests of either group conflict with the interests of the other doesn’t seem to bother these strange bedfellows. The greed side thinks that the industry will just suck it up and keep on going as before. This is not true.
This is far from the first time such a destructive tax change has been proposed. The previous attempt, another initiative-based tax increase, flamed out in the 2014 election but had its roots in an earlier oil tax increase that was actually passed into law in the 2007 session of the Alaska Legislature called ACES.
Who were the actors? Why none other than Gov. Sarah Palin in partnership with then-House Minority Leader Rep. Beth Kerttula. Both bragged about “working across the aisle” to get it done. (Strange bedfellows indeed!)
The result? Upon passage of ACES, not one more nickel of petroleum exploration money was approved by the industry on the North Slope. Exploration projects that were already funded and underway went ahead but nothing new was initiated.
The exploration effort was all but ended by the time Sean Parnell became governor upon Palin’s abdication in mid-2009. It took Parnell a couple of years to set things right with SB 21 and exploration resumed and continues to this day with lots of good results and new oil headed for TAPS.
We have to remember that Alaska competes with other oil-bearing regions of the world and oil companies have choices about where they invest. Alaska has some attractions that other places do not, but the most repellant aspects of our treatment of the industry has been tax instability and disrespect. Instability from the greedy and disrespect from the haters.
I am not saying that we have to do whatever the oil industry wants. There have been legitimate beefs with the industry – usually tax accounting disagreements – that had to be sorted out, sometimes in court. Occasional bad behavior on their part does not justify massive bad behavior on our part.
I am saying that Alaska has to be in a responsible partnership with oil. The two essential ingredients of such a partnership are stability and respect.
The sponsors of Ballot Measure 1 don’t want us to have partnership with the oil industry. They want us to be at war where greed and hate have made their nest.
I am also not saying that we as a society have to be committed to fossil-powered energy indefinitely. There is a good trend, nation-wide, to battery-based cars and now small trucks and also a trend to generating electricity by non-fossil means. The transition is happening. Going to war with the fossil energy industry will only slow it down and surely will not speed it up.
The most significant change in modern society – from an air pollution standpoint – was the transition to unleaded gasoline. It happened without riots, mass upheaval or demonstrations. Society agreed on the need and got it done. Climate change activists should take a lesson from that experience. There don’t have to be losers in order for there to be winners.
Please join me in voting no on Ballot Measure 1.
Walsh is self-employed and has been an observer/participant in Alaska politics and economics since 1976. He lives in Juneau.
I almost totally agree with you about the initiative process….I cannot recall one being passed that worked out well for Alaska. if we had voting % numbers in the 70% or higher maybe I could view the process differently but with our very low % of people that even vote for our representatives and Senators the initiative process is even a worse option….
I talked to my old friend Bill Allen about measure 1. He said that Big Oil has owned the state government for thirty years and that by throwing just $5 million into a Vote No campaign, the measure gets defeated and the taxes will stay as low as the oil companies want.
Murray is spot on. I have know him for over twenty years. Always appreciated being on his talk show in Juneau. Conservative thought always challenged the group think liberal minds of our capitol city. Thanks for sharing your opinion, Murray.
The references in this article regarding Sarah Palin are interesting. In face, conservatives I respect ( i.e. Rush Limbaugh & Mark Levin) somehow are under the belief that Sarah Palin was a true conservative. Actually, Sarah Palin was a truly self-absorbed coo-coo. She tried to stick it to Big Oil when they wouldn’t go along with her plan to finance a pipeline to nowhere. The State lost many millions pursuing that unrealistic “pipe dream”. Thank you Sarah.. When you hear about Big Oil paying their “Fair Share”, that was a punishing concept originated by non other than Sarah Palin herself. This concept is still pushed by liberals today. In fact it’s part of Ballot Measure 1. The bottom line is that Sarah Palin is a coo-coo. But I still support and defend her. After all, even though she’s a coo-coo, she’s still OUR coo-coo…
I would contend that as significant and possibly more effect on pollution was the transition of automobiles to computerization and Fuel injection…both resulting in less fuel burned and cleaner exhaust,,,hence our no longer needed I/M tests.
The one item that is totally disregarded in all these arguments about trying to squeeze the oil companies is the transportation device to get the oil from the oilfield to the tanker. The pipeline was supposed to last 30 years. The pipeline is now 43 years old and is operating only because of huge investment and lots of engineering by the oil companies. At some point, there will have to be a significant investment, well beyond the current level, to be able to continue moving oil to Valdez. If this idiocy in the state continues of blowing every dime on noneffective propositions, like that STUPID Natural Gasline SCAM, we are going to find ourselves in a situation that may result in a decision to discontinue operation due to lack of economic viability. Anyone that says it can’t happen isn’t paying attention.
ACES was a progressive tax, with the low and middle parts similar to SB21 . There it took off , taking more.
The more you make, the more we take, reflecting the skyrocketing oil prices ($125 a Barrel) at the time. We just wanted to participate in the windfalls. Oil was still going to make profits. Back in the 60’s we had a progressive income tax. At 90% for the top earners. Sammy Davis Jr finally became the 1st black to become a Millionaire. had his own Lear Jet. Back in the 60’s ,mostly one breadwinner, and not many people on food stamps, welfare compared to today. Now we have lower taxes, and more people on the gov’t dole. Takes 2 breadwinners and child care to raise a family. More Millionaires and Billionaires. More Gov’t debt than ever. Just name a city, state that has a balanced budget. ! Many people went to Disneyland, new atvs, new snowmachines, and yet we don’t have a bridge over Knik Arm, SuHydro and rural electrification. ARR connection to Canada. A road to Nome. Legacy infrastructure for the generations, like the ALCAN Hwy. Taxes are a tool for lot of uses, some being good, some being abused for no good. Balanced budgets should control the taxes.
Good points raised in this opinion. Since Measure 1 takes away the upside, are it’s backers willing to guarantee a floor that would allow the oil operators certainty that they wouldn’t lose money?
Greed and hate is a good analogy, but I don’t believe that the goals of the two groups are mutually incompatible; it’s more along the lines of “Let’s put the oil companies out of business and take as much money as we can along the way”……along with no measures to include any accountability for the spending of that new tax revenue.
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