SB 21 tax breaks have a very simple approach - a complete lack of actual accountability.
Tax breaks are especially popular with politicians and oil companies because there is no real verifiable accounting trail of amounts given up or received back. It's the ultimate Black Hole. Calling it tax "reform" is also supremely dishonest.
The claims of a consulting economist that a "giveaway doesn't exist" is simply false. Everybody knows that the money stream will be totally controlled by the oil companies under SB 21. Well, giving away a future revenue stream is still a giveaway.
I thank Gov. Tony Knowles for his long public service to Alaska, but he is very wrong about SB 21. This is about oil companies, and who gets and controls the money.
Under SB 21 the oil companies totally control the resource revenue collection, the money stream, the books, the propaganda media blitzes, and the spigot at the pipeline - and they still own all the equipment and the assets. They truly are the owner state under SB 21, due to their political minions.
Alaska could have collected the extra billions each year under the previous tax law, and loaned it to oil companies at zero percent -- with paperwork no more complex than closing a set of loan documents.
Under a loan the state would get the resource revenue as the Constitution requires, and the oil industry could borrow the money to do what they claim, at no cost of capital to them. All those new jobs would still be created with the loan approach -- and with real verifiable facts in the state's possession.
But state politician-lobbyists absolutely fear transparent, independent accountability the most. Under a loan scenario there would be precise audit trail proof as to how much revenue would have been given away.
The politically appointed leaders of the Alaska Department of Revenue and state regulators simply have no independent full and free access to the books, and the actual audit money trail when tax breaks are used. Accountability is a total illusion.
Do you think Norway, Saudi Arabia, Iran, China and Russia give away their resource revenue in unaccountable tax breaks, as is done in the United States and Alaska? They get their money contractually, upfront. Why not Alaska?
The people of Alaska have an absolute right to get the money first. They can then choose to lend it for free to the oil companies.
We have all seen how hard Exxon fought not to pay for the Valdez mess, ConocoPhillips' executives' constant threats to leave, or BP's Gulf mess. They are the ones spending millions in the media prime-time advertising blitz to keep SB 21, to reap billions in money from Alaska assets, not traceable by the public. And you the public also pay for that advertising in business tax deductions, and at the pump. You conserve, they get corporate welfare.
When the profits roll in to the oil companies, you can then compare that to the cuts in Alaska public safety, education, roads, infrastructure and the Permanent Fund, and the zero earnings returned to Alaska on the loan. The amount of money lost each year will be staggering -- but all too enlightening.
That's what the in-house industry lobbyists who masquerade as Alaska public leaders don't want. The public would be truly horrified by such simple, and relatively easy to obtain accountability. It's not complex to set up - they chose not to.
It's so much more than the hallowed "increased production,"' which is really under the spigot control of the oil companies anyway. Oil production can easily be manipulated by the producers. The only real proof are the dollars actually received by the state for the resource.
Vote Yes on 1 if you want the state to own the resource.
Vote No on 1 if you want more manufactured, phony budget crises from Alaska politician-lobbyists, and Alaska's rich resource inheritance transferred directly to the oil industry.
Anselm Staack, an Alaska resident for 40 years, is a CPA and an attorney who teaches accounting and private/public financial management subjects for the University of Alaska Southeast. The views expressed here are his own.
By ANSELM STAACK