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Coalition pushes cuts in state oil taxes

Richard Mauer

The election-season oil-tax debate is getting noisier, with another coalition -- this one saying it's nonpartisan -- hitting the airwaves with commercials urging voters to pay close attention to the issue and push candidates for tax reductions on oil production.

At a news conference Tuesday in which former Democratic Gov. Tony Knowles and former Republican House Speaker Gail Phillips appeared together, the Make Alaska Competitive Coalition said it hoped to raise at least $300,000 for radio, TV and newspaper advertising. Spokesman Jason Moore said the organization "was well on our way" to meeting that goal, but he had no more specifics.

The first radio ads began airing last week, Moore said.

The coalition won't support or oppose individual candidates, said co-chairman Jim Jansen of the transportation company Lynden Inc. But it wants to take advantage of the political season to get its message to the public, he said: that Alaska is overtaxing the industry, propelling it to go elsewhere for oil and taking jobs and economic growth with it.

"It's the number one priority of the state -- we must fix our current tax policy and stop the decline of petroleum (production), or we're going to be doomed -- we're going to fall off an economic cliff," Jansen said.

Bringing up the latest Permanent Fund dividend, just announced earlier Tuesday, Phillips asserted that declining oil production was somehow the cause of this year's disappointing return.

"The public of Alaska very clearly understands a $2,000 PFD check versus an $878 PFD," Phillips said.

Knowles later said that Phillips had it wrong -- the current dividend is determined by investment earnings of the fund, not recent oil production. But declining oil production could affect future earnings of Alaska's huge savings account because the state would have less oil revenue to add to the fund's principal, he said.

Virtually every legislator, Republican and Democrat, has said the state's oil-tax regime needed changes, but they disagree on what changes to make. In the previous Legislature, the House Republican majority, with some dissent from within the party but with a few Democrats crossing over, narrowly passed a bill that would reduce production taxes by up to $2 billion a year. That bill, House Bill 110, died in the Senate, which was run by a bipartisan coalition.

The Senate had its own version of oil-tax reform, which it said would save industry about $500 million annually if it met production incentives, but the measure went nowhere. Jansen said the Senate "ran out the clock" in waiting until the end of the session to come up with a bill. Senate leaders said the House bill would have given too much away to industry without any requirement that the companies produce more oil.

Knowles, known for "partnering" with industry during his terms in office, said House Bill 110, supported by Gov. Sean Parnell, was not the right answer, but neither he nor anyone else who spoke at the press conference Tuesday offered a substitute.

Rephrasing strategist James Carville's advice to candidate Bill Clinton on the economy, Knowles said, "It's the production, stupid -- that is the message that we want to put out for all candidates."

In announcing the press conference, the coalition said it would "address how it is funding the campaign." While the organization presented a list of contributors, from the oil-support industry to labor unions to Native organizations, it wouldn't say how much each was giving. Jansen would only say that Lynden had contributed $25,000, which was the most of any member.

Other organizations are also joining the fray, some supporting the Senate's position, some opposing, and some urging the state to hold the line on oil taxes.

Reach Richard Mauer at rmauer@adn.com or 257-4345.


By RICHARD MAUER
Anchorage Daily News