Joe Paskvan’s recent commentary on oil taxes (“Stop the budget cuts …”) illustrates two of the many problematic accounting perspectives that are driving the Fair Share Act ballot initiative.
First, he says, oil revenues dropped after 2014 when Senate Bill 21 went into effect. Oil revenues dropped because oil prices fell from $108 per barrel in 2014 to $43 per barrel in 2016, and have stayed low. Revenues would have dropped under any tax regime. Currently, taxes are higher than they would have been under the previous — “ACES” — system.
Paskvan also said that during the past five years, credits have exceeded revenues. To get to that result, you have to combine two distinct accounting ledgers.
Over that period, the large North Slope producers paid more than $2 billion in production taxes, after credits, including years when net income was negative or close to it. In those same years, there was also $2 billion in credits paid or owed to either non-North Slope, or small North Slope producers. These credits were enacted under ACES.
The Fair Share Act is directed at large North Slope producers. If one is aggrieved by the credits paid to the others, it is difficult to see what voting for the initiative does.
— Roger Marks
Anchorage
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