A campaign group trying to preserve oil tax cuts approved last year got a boost Friday when Sen. Lisa Murkowski, North Slope unions and contractors all urged a “no” vote on Ballot Measure 1, an effort to repeal Senate Bill 21.
The issue of Alaska oil tax policy will be before voters Aug. 19 when the referendum seeking to veto the new law is on the primary ballot.
The 2013 change replaced a Palin-era tax law — passed in the wake of corruption scandals — in which the tax rate increased as oil price went up, and dropped when oil prices went down.
The new measure pushed by Gov. Sean Parnell eliminates that central feature. It aims to increase industry investment and curb a decline in North Slope production, and oil companies say it is working.
The union opposition came up Friday in the U.S. Senate race. Republican candidate Dan Sullivan, Alaska’s former natural resources commissioner and one of the architects of Senate Bill 21, said he applauded the unions and contractors and questioned why incumbent Sen. Mark Begich won’t take a stand.
“It seems Senator Begich supports passage of Ballot Measure 1, but he won’t come clean with Alaskans,” Sullivan said in a written statement. “Mark Begich should be honest about his support for Ballot Measure 1 and his misguided vision for Alaska’s future.”
Begich has said the matter is up to voters.
Asked in March whether the state was better with Senate Bill 21 in place, Begich told reporters: “I’m not going down that path with you. I think it’s a great debate that’s occurred.”
Whatever happens the state needs “certainty in a tax structure,” he said.
He still hasn’t taken a position, spokesman Max Croes said in an email Friday.
Murkowski and seven industry representatives announced their opposition to the ballot measure at an event held at the office of the International Union of Operating Engineers Local 302.
Besides the senator, others who gathered for the “no” effort included Warren Christian, president of the North Slope Contractors Association and head of Doyon Associated LLC, the Doyon Ltd. construction arm.
Leaders of these unions and contractors also spoke out: Fairbanks Laborers Local 942, International Union of Operating Engineers, Teamsters Local 959, United Association Local Union 375 in Fairbanks, Price Gregory International Inc. and ASRC Energy Services – Houston Contracting Company Inc.
“We have strong support from the business community across the state, with hundreds of small businesses, dozens of chambers of commerce, and business organizations getting behind our campaign,” Willis Lyford, campaign director for the oil industry-funded “Vote No on 1” ballot group, said Friday in a written statement. “But support from organized labor provides a critical, bipartisan grassroots component to our effort.”
Vic Fischer, chairman of the “Vote Yes — Repeal the Giveway” group that circulated petitions for the ballot measure, said “we’re not surprised.”
“We’ve got the support of 50,000 Alaskans who signed the petition, and they are supported by large corporations who are afraid of losing the sweet deal they got from the administration,” he said in an email Friday evening.
The boost comes during heated debate over the a new study comparing Senate Bill 21 to former Gov. Sarah Palin’s tax regime, known as Alaska’s Clear and Equitable Share.
Scott Goldsmith, a prominent economist and former director of UAA’s Institute of Social and Economic Research, found that the new tax system is costing the state less than $90 million this year and that if oil prices are low, and production costs are high, it could bring in more money than the old system.
But others, including Mark Myers, former director of the state oil and gas division and the U.S. Geological Survey, have challenged Goldsmith’s methods and conclusions.
Sen. Bert Stedman, R-Sitka, says at high oil prices, the new tax system will cost the state dearly.
“Senate Bill 21 is structured as if the State of Alaska is having a going out of business sale on oil,” he wrote in an opinion piece submitted to news outlets this week.