OPINION: Senate tax bills threaten critically needed community investment

From my view as the CEO of the Iditarod organization, Hilcorp Alaska’s role as a major sponsor of our race is a source of great pride. Their partnership and support are integral to keeping the Last Great Race alive and well. It concerns me when I see pieces of legislation, like Senate Bill 114 and Senate Bill 122, which clearly target companies like Hilcorp, even when their negative consequences are entirely predictable.

Longtime Alaskans are familiar with how massive, multinational oil companies supported many nonprofits and local charities for years. While many of the bigger companies have packed up and left, Alaska has been fortunate to attract new, independent oil and gas companies to keep oil flowing down the pipeline. When we consider Senate Bill 114 and Senate Bill 122, it’s important to consider that there are key differences between larger, legacy oil and gas companies and smaller ones like Hilcorp. When we target smaller players with legislation, such as Senate Bill 114 and Senate Bill 122, that increases their taxes by over 75%, and we significantly increase the challenges to their ability to work in Alaska.

Hilcorp Alaska is privately owned and therefore less susceptible to pressure from outside activist groups. This approach allows smaller companies to align with Alaskans’ long-term interests because they have formed strong connections with the communities they operate in. I can’t tell you how refreshing it is to work with a sponsor like Hilcorp that realizes such activists do not represent the attitudes of Alaskans and proudly continues to support a beloved Alaska tradition like the Iditarod. They know enough about Alaska to understand that local support is critical to their success.

It is important to note that companies like Hilcorp are not just important sponsors of the Iditarod, but also major contributors to our communities. They provide good jobs, support many local businesses, and help fund community initiatives. If Senate Bill 114 or Senate Bill 122 became law, it could force a pullback, meaning the company’s spending in Alaska would shrink. This reduction in local spending would ripple throughout the private and public sectors. With our state economy still struggling in this post-COVID world, the timing of these pieces of legislation could not be worse.

Alaska’s economy remains heavily dependent on resource development, and we need companies like Hilcorp to continue spending money in our state. Increased corporate taxes threatens future community investment by moving more of their available dollars to paying higher taxes. These pieces of legislation offer a stark choice: more money to fund the government now, or more money to invest locally in the long term.

Alaska is fortunate to be home to corporate sponsors who understand what it means to be a real partner. Companies like Hilcorp Alaska represent the future of what resource development companies will look like in our state: smaller, more nimble, and less prone to worry about how they do it in the Lower 48. Our state laws and regulations should welcome them, not chase them off. Senate Bill 114 and Senate Bill 122 should be summarily rejected by state leaders who understand this.

Rob Urbach is the CEO of the Iditarod Trail Committee.

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