First, I must emphasize that this is my personal opinion and is not an official position of the Fairbanks North Star Borough Assembly, of which I am an elected member. I read with dismay the news article about former Gov. Palin weighing in on Ballot Measure 1, not because she isn’t entitled to weigh in, but rather the implication that supporters of SB 21 in the Legislature and the governor’s office had given control to Big Oil. I would ask Alaskans to think deeper than emotional sound bites, inciting disdain for big business and Big Oil in particular.
This populist mentality seems meant to cause Alaskans to question the integrity of our legislators and the governor, and whether they had a conflict of interest and any right to make oil tax policy changes to Palin's policies. Whether SB 21 is favorable or detrimental to the oil companies will depend on oil prices and conditions -- the only given is that it is more stable and can be used more predictably for investment planning decisions.
Our Legislature is a citizen legislature, our legislators still work other jobs. Every single Alaskan who receives a Permanent Fund dividend has a financial interest in this issue, so we all should be for increasing production because oil royalty revenues rise and fall with production, not oil income taxes, and they help feed the Permanent Fund. We all have either a direct or indirect conflict of interest, whether we work for an oil company or not. Oil revenues comprise the bulk of state revenues, so what about state-funded employees (including people who work for the university system)? They have a financial interest. What about people working at a nonprofit organization that receives donations from oil companies or state grants? They have a financial interest. In reality, there are few people living in our great state, who can honestly say that they don’t have some financial interest that isn’t directly or indirectly tied to oil tax revenues and production royalties. We all like the corporations to pay taxes to our state, because it means we don’t have to -- no individuals do. That most certainly creates a conflict of interest, and yet we will all vote on this issue on Aug. 19 -- and rightfully so.
I would implore my fellow Alaskans to not insinuate any dark motives by our governor or legislators -- they are honorable men and women, representing their constituents after weighing the information carefully -- whether they supported the change in tax structure or not. For all issues, people may think differently about how to achieve a particular outcome. Both sides of this issue believe that the tax policy they support will benefit Alaska residents. Supporters of Ballot Measure 1 emphasize tax revenues now (as much as possible), because they believe tax policy will not influence future oil and gas production. Opponents of Ballot Measure 1 believe SB 21 will promote future economic growth, in oil and gas production, by establishing a stable tax policy that companies can use to plan future investment and jobs in our state. Both sides have Alaska’s best interest at heart and “It’s our oil” resonates with all of us.
I, personally, am opposed to Ballot Measure 1, because as a certified public accountant, I know that tax policy does influence business operations and investment decisions. Companies will invest where they get the best return, weighing other factors such as risk and stability also. I try to think long-term about the future of Alaska and what jobs will be here in 20 to 50 years, for the next generations.
I was born in Anchorage, raised on the Kenai Peninsula, graduated from Wasilla High School and then moved to Fairbanks to work and raise my family after graduating from UAF. I have seen first-hand the transformation of Alaska's economy as jobs were created by the oil industry. We can run off the golden goose, by choosing to ignore what businesses tell us they need to keep their investment in Alaska growing; by taxing to the max now; or we can lay the foundation, like SB 21 did, for the golden goose to feel comfortable about laying eggs for us well into the future.
If “our oil” stays in the ground, it will benefit no one, and those who fear losing government funding will indeed lose it. No matter how much we try to diversify our economy, nothing comes close to the oil industry and to ignore the industry for the sake of populist sound bites, hurts no one but us. They can and will go elsewhere with their investment dollars and jobs. It’s in our hands. We all have a conflict -- satisfy our short-term spending appetite or plan for our future generations to have jobs and prosperity. The choice on Aug. 19 is yours, please join me in voting "No on One."
Diane Hutchison serves on the Fairbanks North Star Borough as chair of the Finance Committee. She is a Certified Public Accountant and formerly ran Sen. Ted Stevens office in Fairbanks. The preceding opinion piece is her own personal opinion and not that of the FNSB Assembly, which has not taken a position on Ballot Measure 1.