PETITION BOOKS ARE NEXT STEP TO GETTING IN FRONT OF VOTERS
The “Fair Share” ballot initiative that would gut Alaska’s reformed oil tax structure known as SB 21, was accepted by the Lieutenant Governor’s Office, which means petition books can be printed, and supporters can start gathering signatures.
The decision came with a caveat: The ballot language is confusing, according to the Attorney General. It could be interpreted in such a way that it actually costs the state money. Read the Attorney General’s letter here:
The voter initiative would eliminate certain oil tax credits and reinstate progressive taxes on legacy oil fields such as those on the North Slope currently operated by BP and ConocoPhillips.
Robin Brena, law partner to former Gov. Bill Walker, is the most visible force behind the ballot initiative, although plenty of Democrats are on board with higher oil taxes. Brena says it will bring an additional $1.1 billion annually to State coffers. He has been trying to move the state’s oil tax structure closer to the old ACES — “Alaska’s Clear and Equitable Share” regime that was enacted under Gov. Sarah Palin.
ACES is blamed by most analysts for the slowdown in oil exploration and production several years ago, as North Slope producers felt they were being gouged by the State of Alaska, and started putting the legacy oil fields into a tax-induced coma.
Then, SB 21 passed in 2013 in the Alaska Legislature. Opponents immediately took it to voters with a ballot initiative in 2014, which was defeated by voters. Things started looking up in the oil patch, even while prices were depressed.
But now, with the State of Alaska’s billion-dollar-plus budget crisis, will Alaska voters still show their support for oil producers to stimulate production? Will oil companies put their investment decisions on hold?
The tax initiative targets those legacy fields that have supported Alaska’s state government and economy for decades — Prudhoe Bay, Alpine, and the Kuparuk River fields, for example. The Fair Share plan would be to tax every barrel 10 percent if the price-per-barrel is below $50. For every increment of $5 in price increase, the tax would increase by 1 percent, until it tops out at a $15 percent tax for any barrel that sells for more than $70.
Kara Moriarty, Alaska Oil and Gas Association’s chief executive, worries that this tax initiative will sour oil companies on Alaska once again, and the fallout from that would be significant for the economy:
“This proposed ballot measure is yet another flawed attempt to adopt complicated tax policy through the initiative process. While the sponsors say it will not have any impact, make no mistake, no industry in Alaska can sustain a $1 billion plus tax hike without negatively impacting investment decisions for their business, which creates less opportunity for jobs for Alaskans. We look forward to communicating with Alaskan through this process,” Moriarty said.