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Stop the budget cuts and vetoes into the Dark Ages

  • Author: Joe Paskvan
    | Opinion
  • Updated: February 26
  • Published February 26

BP workers, in the background, remove insulation from an oil transit pipeline at the Prudhoe Bay oil field on Alaska's North Slope Aug. 18, 2006 as other workers use ultrasound to test for weakness in the pipe due to corrosion. (AP Photo/Al Grillo)

Since the first oil flowed from the North Slope, a modern Alaska has been built, operated and maintained because Alaskans have been able to get a fair share of production revenue from the sale of our oil. Since Senate Bill 21, or SB 21, slashed our share of production revenue five years ago, the Legislature and administration have been cutting and vetoing Alaska’s budgets and PFDs into their flesh, bones and vital organs, pushing Alaska toward the Dark Ages.

Notwithstanding a two-year period of lower oil prices, these hardships could have been avoided if Alaskans were still recovering a fair share of production revenue. Unfortunately, starting in 2014, SB 21 slashed our share of production revenue by $1.5 billion to $2 billion per year. For the past five years under SB 21, Alaskans have actually paid and owe producers more in production credits than producers have paid us in tax revenue. In fact, the state is currently trying to borrow $1 billion to pay producers for production credits we still owe them.

SB 21 has directly undercut Alaska’s economy. Since it went into effect, Alaska has cut and vetoed its operating budgets (cutting essential services and jobs), capital budgets (cutting needed infrastructure and jobs), and PFDs (harming our families, economy and jobs).

SB 21 has also indirectly undercut Alaska’s economy. Since it went into effect, the $2 billion in deferred maintenance needed for state buildings, facilities and structures across Alaska has not been funded by way of capital budgets. My best guess is that if all currently deferred maintenance needs for the university system, the ferry system, public schools, roads and highways, airports, prisons, court systems, Alaska State Trooper facilities, all administrative buildings and all other public buildings and facilities and structures were added together, the total deferred maintenance would be much more than $2 billion.

SB 21 has undercut our economic future. Even the things businesses look to when thinking of opening a business in Alaska are now being hurt by our oil tax law. New businesses that might employ Alaskans will look at Alaska’s infrastructure. They would find Alaska is 46th of 50 states, with 9.7% of its bridges in poor condition and 29% of its roads in unacceptable condition, with state support for the ferry system cut hugely. Businesses will look to public education to see if the state work force is currently being trained and will find Alaska is 49th of 50, with the university system in the midst of a $70 million cut of its funding. We know Alaska has a high cost of living; there, we are at 44th of 50. If you cut/veto programs and sports from public schools and cut/veto libraries from communities and cut/veto music and art programs and cut/veto the multitude of elective programs, the business owner will question why their family or their employees’ families would want to live here. In other words, the cuts and vetoes are destroying the quality of life in Alaska and with it, our economic future.

Now is not the time to continue giving massive and unnecessary public subsidies to a few multinational corporations to produce our oil from the largest and most profitable conventional oil fields in North America. Now is not the time for more devastating consequences from cuts/vetoes due to SB 21.

Now is the time to stop the cuts/vetoes which push Alaska toward the Dark Ages. Now is the time to change SB 21 so Alaskans will again receive their fair share of the oil wealth our oil creates. Now is the time to fund essential services to send the message to new business owners that functioning infrastructure will exist, that K-12 and the university will be funded, that sports, music, art and libraries will be funded. Now is the time to fund PFDs to help our economy and provide jobs. Now is the time to fund a meaningful capital budget to build needed infrastructure and provide jobs. Now is the time to heal the cuts and vetoes to the flesh, bones and vital organs of Alaska’s body.

Please consider supporting Vote Yes for Alaska’s Fair Share. Our future depends upon it.

Joe Paskvan is a retired lawyer and former state senator. He lives in Fairbanks.

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