Critics of oil tax cuts move ahead with referendum to repeal the legislation

Lisa Demer

Critics of Gov. Sean Parnell's oil tax cut bill on Thursday called it unconstitutional, a break for Big Oil and a massive giveaway of Alaska's resources as they took the first official step in their bid to repeal the newly passed measure.

Organizers of a referendum campaign on Thursday announced their effort to news reporters on the sidewalk outside the state Atwood Building downtown. Then they stepped inside to file their application for referendum petitions with the lieutenant governor's office. They want voters to veto what the Legislature did.

Senate Bill 21 -- which has only the barest of provisions for progressively higher taxes as the price of oil rises, the signature element of the current Palin-era tax scheme -- hasn't yet become law. It hasn't been transmitted to the governor for his signature.

Parnell says he pushed for big cuts in oil taxes to encourage oil companies to invest in Alaska and stem a long decline in North Slope production. Oil revenue pays for schools and roads, troopers and teachers. It provides 90 percent of the state general fund budget.

The measure passed its last legislative hurdle on Sunday, the final day of the legislative session. That's when the clock began ticking on a 90-day window for backers to collect more than 30,000 signatures and file a petition with the state Division of Elections to put their repeal proposal on the August 2014 ballot.

The three prime sponsors of the referendum campaign are: Vic Fischer, a Democrat from Anchorage, one of the framers of the Alaska Constitution and a former state senator; Bella Hammond, widow of Republican Gov. Jay Hammond and a resident of Port Alsworth; and Jim Whitaker, a Republican who is a former state representative and Fairbanks North Star Borough mayor.

Fischer told reporters at Thursday's event that he believes the new tax structure violates the constitution, which requires that the state's resources be managed for "the maximum benefit of its people."

"This means the maximum benefit of Alaskans," Fischer said. "Not oil companies, not other absentee owners."

Ray Metcalfe, one of the organizers and an oil industry watchdog, said that right after the bill passed he began hearing from Alaskans asking what they could do about it.

"There was a massive, massive outrage in the public," said Metcalfe, a former legislator who is a Republican-turned-Democrat.

Jack Roderick, an Anchorage Borough mayor before the borough and the city unified, an Alaska oil explorer in the industry's early days and a former Natural Resources deputy commissioner who helped write the state's oil leasing laws, told reporters that oil companies will produce the oil with or without big tax breaks.

"They'll do it probably a little quicker. But only a little quicker. And that is not in the interest of the state," said Roderick, who also wrote a book called "Crude Dreams: A Personal History of Oil and Politics in Alaska."

Alaska's three major oil producers, ConocoPhillips, ExxonMobil and BP, will save billions of dollars over the next five years under the new tax structure, but could not assure legislators that new development would result.

"The governor is the CEO of this state. How dare he give our resources away without a commitment in exchange?" Roderick said, his voice rising. "I get a little emotional because, dammit, we need to control our future, for our kids."

In a press conference after the legislative session, Parnell addressed the prospect of a referendum and told reporters to look back to the general election, when Republicans won enough new seats to take control of what had been a bipartisan-run Senate and widened their numbers in the state House.

"I think the referendum was last November," Parnell said. "I think the voters voted that it was time to stop studying the issue of declining oil production and do something about it."

Kara Moriarty, executive director of the Alaska Oil and Gas Association, said in an interview Thursday afternoon that Alaskans should give the tax measure a chance before seeking to wipe it out. The referendum could lead oil companies that otherwise would be ready to invest in new projects to delay their decisions, she said.

"The message on Sunday was, 'Alaska wants back in the game,' " Moriarty said. "Now if this referendum is put on the ballot, there's a big question mark for over a year."

Referendum backers have a big hurdle. Unlike initiatives to create new laws, referendums to repeal existing laws are on a fast time track, said one of the organizers, Pat Lavin, an Anchorage attorney. With the clock already ticking, they've only got until mid-July to gather the signatures statewide.

They must collect signatures equaling 10 percent of the voters in the last general election, which is 30,169 signatures, and they must be from 30 of the 40 House districts. In each of those House districts, at least 7 percent of the voters must sign, under a change approved by voters in 2004 intended to ensure statewide support of initiatives and referendums.

To apply for petitions, they needed 100 signatures, and collected 372 in just a couple of days, Metcalfe said. Now it's up to Lt. Gov. Mead Treadwell to decide whether to approve the application for petitions. While he has just seven days to make that determination, the state then must print signature booklets, and that can delay the process. Organizers hope the state acts fast.

The referendum campaign already has a Facebook page called "Vote Yes -- Repeal the Giveway." Lavin said the effort will need many volunteers to succeed. The group plans to register with the Alaska Public Offices Commission and raise money "from Alaskans," Lavin said. They likely will have to pay signature gatherers to collect enough in time, though the group is just forming and figuring out how to proceed, he said.

With the tax break approved, ConocoPhillips this week announced new projects that it says will happen. But state Rep. Les Gara, D-Anchorage, said some work in the National Petroleum Reserve-Alaska was already planned, as evidenced by a December Petroleum News story that referenced a new well being permitted in the Bear Tooth unit and wells being staked in the Bear Tooth and Moose's Tooth units. Roderick argued that oil company spending decisions can't possibly happen that fast.

A ConocoPhillips spokeswoman, Natalie Lowman, said the new work includes a rig being brought to the Kuparuk field this spring, which will work over old wells to increase production. Work in its Greater Moose's Tooth unit hasn't yet been approved to go forward, but the tax change makes the project more likely, she said in an email. While its plan to drill an exploratory well in Bear Tooth was previously announced in December, ConocoPhillips isn't counting that among its new, tax-driven projects, she said.

Three referendums have made it to the ballot in Alaska, and two overturned laws. In 2000, Alaskans repealed a new law allowing land-and-shoot wolf hunting. In 1976, voters shot down a law that would have raised the pay for judges, legislators, commissioners and others. A third measure, in 1968, passed and upheld a new voter registration requirement.

Contact Lisa Demer at or on