Here we go again
The usual suspects are at it again, trying to persuade Alaskans to cut off their noses to spite their faces.
A group is moving to get a measure before Alaskan voters asking them to increase taxes on the oil industry by somewhere between $1 billion and $2 billion a year. This time around they are calling it “Vote Yes for Alaska’s Fair Share.” A group tried the same thing in 2014, but Alaskans were too smart to fall for it
The 2014 effort, masquerading as reform to stop an illusory “giveaway” to the industry, was an attempt to repeal Senate Bill 21, which thankfully had replaced former Gov. Sarah Palin’s disastrous “Alaska’s Clear and Equitable Share” oil production tax. ACES, as it became known, was lousy law. It contained a 25 percent base rate and progressivity contributing to a marginal tax rate of more than 90 percent at higher oil prices.
Who would want to invest in that environment? ACES squeezed industry far beyond what was necessary to pay for burgeoning government and fat capital budgets. Predictably, investment dollars for new oil production went elsewhere and Alaska became the only oil province in the country to lag in production as others boomed. Throughput in the trans-Alaska oil pipeline dried up at 6 percent to 8 percent a year.
Nowadays, the good news is that industry has opened new fields on the North Slope that promise more production – along with more jobs and increased revenues for the state.
The newly offered “Fair Share Act,” with lots of former Gov. Bill Walker’s henchmen and Democrats rowing the boat, would derail all that. It would alter the state’s 2014 oil-production tax for larger North Slope fields, but would not affect smaller fields.
The effect? The same as Palin’s ACES. Investment by larger companies would dry up and go elsewhere and the state would lose production and revenues. Alaska again would become an industry backwater.
It is too bad that some are trying to use the state’s current fiscal woes to punish the oil industry just as the state seems to be clawing its way out of a recession. It is even worse that we all will pay if they are successful.