Our View: If Alaskans cut oil taxes, what do we get?

February 27, 2013 

Oil taxes

Keep focus on one question: What does Alaska gain?

Sen. Bill Wielechowski found a willing and able debate partner in Andrew Halcro on Monday at the Anchorage Chamber of Commerce. The two men argued oil tax reform, the dominant issue of the 2013 legislative session -- as it was in 2012 and 2011.

During those years, the fundamental question for Alaskans has never varied: If we cut taxes, what good will it do us?

After three years of discussion, we still don't have an answer. We've heard vague suggestions of increased industry investment, talk about a "more competitive" business climate and hazy visions of treasures yet untapped.

But what we don't have is a quid pro quo - "this for that" - the basic element of business everywhere on the planet.

Until we do, it would be irresponsible to forego hundreds of millions or billions of dollars in revenues. Sen. Wielechowski had the more compelling position in the debate -- cut taxes, sure, but not before Alaskans get an enforceable commitment of new oil production or, better yet, actual performance.

We've been told we must understand how the oil industry works, that the companies can't make solid commitments out of probabilities or maybes.

Well, the oil industry needs to understand how Alaska works. Like the oil companies, Alaska is a multibillion dollar enterprise. Unlike the oil companies, Alaska is a sovereign state that provides its citizens with education, public safety, transportation, communication, resource and wildlife management and more. We would be irresponsible to start deficit spending and burning up cash reserves based on nothing but the hope of future oil company investment.

Lawmakers are in the process of amending the governor's bill, which gives up all progressivity (the system of higher tax rates at higher oil prices), with no commitments required, yet the governor and many Republican lawmakers think even those terms are not generous enough.

Throughout this debate, we've argued that Alaska should be willing to lower oil taxes, but we've always said, and continue to believe, that in exchange the companies must tell us exactly what they will do.

So far, there has been no answer.

BOTTOM LINE: Changes ACES? Sure, provided Alaska gains.

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