The State of Alaska clearly has a major fiscal crisis on its hands. Five years ago Alaska was producing 23.3 million barrels of oil per month. Last year that rate had dropped to 18.3 million barrels of oil per month. That's a drop of five million barrels of oil each month in just five short years. Alaska's $11 billion-plus state budget cannot be sustained with oil production dropping 5 to 7 percent each year.
I do not want to see the Legislature dip into our budget reserves in order to fund future budgets. Alaska's annual general fund budgets over the past two years have sky rocketed to $6.7 billion in fiscal year 2011 and $7.6 billion in 2012. When you add in $3 billion-plus in capital spending you have the formula for disaster. We have to begin scaling back our reckless desire to spend.
As father of the "Anchorage Tax Cap," I would suggest that there needs to be a constitutional lid on Alaska's budgets based on state revenue.
We need to allow Pebble Mine the opportunity to finish their permit application. Alaska should review their findings and decide if the project is feasible and that it will not harm our natural resources.
I suspect that if the Pebble Partnership is allowed to finish their studies, we will have a significant resource project that will be able to hire thousands of Alaskans. Alaska might want to take a look at how large projects like Pebble are taxed. From what little I know about mining in Alaska, we might want to take a larger slice of projected profits from large-scale mining operations.
In my 17-plus years in public office, I've demonstrated a commitment to keep government spending under control. We need to be proactive and establish a resource friendly atmosphere in Alaska. We must let the world know that Alaska is open to business and ready to become competitive in the world markets.
Right now we are taxing ourselves into becoming a warehouse of natural resources. Trillions of barrels of "stranded" oil and gas in Alaska does nothing for our financial needs. I've lived in Alaska for over 70 years and have watched industry after industry driven out by short-sighted laws and regulations. How many barrels of oil are stranded in Alaska's Arctic National Wildlife Refuge? The caribou do not have a problem with pipelines or oil production facilities. I've been to the North Slope and have seen how careful the oil industry has operated its fields.
Don Smith, a former Anchorage Assemblyman and current school board member, is the Republican candidate for Senate District H in Anchorage, which includes the U-Med district, Spenard and Midtown.