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Vote Yes group finally has money to spend on ads to promote restoring ACES

Richard Mauer

The oil industry and its allies may still have overwhelming superiority in campaign resources for the Aug. 19 oil-tax referendum, but a late surge in fundraising by the side that wants to repeal tax cuts passed in 2013 is now putting ads into newspapers and on the radio.

The leading “vote yes” organization is collecting dozens of small contributions from Alaskans and still has volunteers going door-to-door and identifying potential voters in a “ground game.”

But two recent $100,000 contributions from former grocer Barney Gottstein have nearly doubled its fundraising and extended its reach to the media, formerly the exclusive province of industry-led “no” groups. Gottstein had previously given $74,000 to the “yes” campaign.

“There’s a dog in the fight now,” said David Gottstein, one of Barney Gottstein’s sons and a steering committee member of Vote Yes! Repeal the Giveaway.

“Now we can finally run the whole two-pronged campaign,” added T.J. Presley, the Vote Yes! campaign manager. “We’ve been doing ground game, ground game, ground game -- nothing else -- so now we finally have the opportunity to run ground game and media game.”

With just over a week to go before the election, the two sides are still separated by a chasm of money -- as they have been for months. Three no groups and several independent efforts have raised $14.4 million and spent $13.3 million, much of it with professional public relations and media production companies, according to the latest campaign finance reports filed with the Alaska Public Offices Commission as of Friday.

The two yes groups combined reported $472,906 in contributions and $317,577 in expenditures. That’s nowhere near enough money to produce and air television commercials like the vote no side’s, Presley said.

Gottstein may have helped the yes effort, but he’s no match for the state’s three major oil producers, ConocoPhillips, BP and ExxonMobil Corp. The big three account for $11.3 million of the vote-no income. Most of the rest is from businesses that work for the industry or from would-be producers like Shell. The Spanish oil company Repsol, hardly a household name in Alaska, contributed nearly three times more to the no campaign than Gottstein did to the yes campaign.

The referendum will ask voters if they want to return to the previous tax system, Alaska’s Clear and Equitable Share, created by the Legislature and Gov. Sarah Palin’s administration in 2007. A yes vote restores ACES and a no vote continues Senate Bill 21, also known as the More Alaska Production Act, introduced by Gov. Sean Parnell and passed by the Legislature in 2013.

ACES has a lower tax rate than MAPA when oil prices are low but takes in more money when prices are high, as they were for most of the years following its passage. According to state research, the treasury would have lost billions of dollars had MAPA been in effect since 2007. But supporters of the new tax say ACES created a disincentive for the big oil companies to produce more oil in Alaska and led to faster decline rates from the state’s granddaddy fields -- Prudhoe Bay and Kuparuk -- than would otherwise be expected.

Oil is at the heart of the state’s economy and is by far the biggest source of unrestricted state revenues through taxes and lease royalties.

Barney Gottstein, 88, is retired now. But for much of the state’s history, he has been a big source of political money for Democrats. So was his partner in the the former Carr-Gottstein grocery business, Larry Carr, but Carr died in 2011.

David Gottstein, two other sons and a grandson have contributed $4,950 to Vote Yes!, campaign finance reports show. But no one has come close to the $274,000 that Barney Gottstein gave, and Presley said he hopes there will be more.

David Gottstein, a money manager, said there’s probably no person in Alaska with the deep pockets and philosophy to support something like the repeal referendum other than his father.

“Nobody can hurt him; he doesn’t need anybody else’s help. Larry used to do the same thing -- they would step out together and do this stuff,” Gottstein said. “If he doesn’t step in, then all the practical dialogue is drowned out by that which is self-serving to the oil industry.”

Gottstein said Senate Bill 21 created tax breaks for industry to produce oil they would have produced anyway from the mammoth fields and eliminated some of the incentives in ACES that encouraged independent explorers. Until the big companies drain the “bathtub” of the big fields, “it’s cheaper for them to invest in overwhelming our public policy process than it is to actually produce more oil,” Gottstein said.

Willis Lyford, press spokesman for Vote No on One, the oil producer’s group, said he expected the other side to have some kind of advertising campaign before the election.

“It’s the same message all along, it’s all about how much money the state’s going to get” through higher taxes, not about increasing oil production, Lyford said.

“We just assumed they would have some money to spend on the campaign. They are getting 90 percent of their money from one person who’s a very wealthy individual,” Lyford said.

Gottstein's money is actually 59 percent of the contributions to Vote Yes! And Lyford acknowledged that the vote yes groups have hundreds more individual Alaskans as contributors than any of the vote no groups, even if their contributions are small.

“Yes, they have more contributions than us, but they’re supposedly a grass-roots group,” Lyford said.

Debates on oil taxes this week

Alaska Dispatch News is co-hosting two debates on the oil-tax ballot measure this week.

The first, co-hosted with KTVA-Channel 11, will be Monday from 7-9 p.m. at the Wendy Williamson Auditorium on the University of Alaska Anchorage campus. Vote Yes panelists will be Jane Angvik with the YES campaign; Chancy Croft, former state senator; and state Sen. Bill Wielechowski. Vote No panelists will be Kara Moriarty, Alaska Oil and Gas Association president and CEO; Andrew Halcro., president of the Anchorage Chamber of Commerce; and state Sen. Lesil McGuire. It will be broadcast from 7-8 p.m. on KTVA and streamed from 7-9 p.m. on adn.com and ktva.com.

The second debate, hosted by ADN and the UAA Seawolf Debate Program, will be Tuesday from 5:30-7 p.m. at Bear Tooth Theatrepub. The moderator will be UAA debate coach Stephen Johnson. Speaking in favor of the repeal will be Croft and Wielechowski. Opposing it will be Mark Hamilton, president emeritus of the University of Alaska; and Doug Smith, CEO of Little Red Services. Admission is $15, with proceeds supporting the Seawolf debating program. It will be live-streamed at adn.com.