Politics

Citing legislative inaction, a few Alaskans might try to raise oil taxes through a citizens initiative

A few Alaskans are considering using a citizens initiative to raise oil taxes, saying they're frustrated by some lawmakers' resistance to raising taxes themselves.

"We don't have a draft yet," said Harry Crawford, a former Democratic state House member from Anchorage. But, he added, ideas are circulating "in a bunch of very good minds."

Initiative supporters would have to rush to get their proposed language approved by the state in time for next year's election, and they'd also likely need to raise cash to hire people to gather the more than 30,000 signatures required to get any measure on the ballot.

But Crawford, who spent 10 years in the Legislature, has done it before: In 2006, he and two others sponsored an initiative to levy a tax on natural gas reserves — though the measure ultimately lost by a 2-1 margin.

Crawford, in a phone interview, said he's batting oil-tax ideas around with the Crofts — Eric Croft, the Anchorage Assembly member who co-sponsored the 2006 initiative, and Chancy Croft, Eric's father and a former president of the Alaska Senate.

Their ideas include changing the state's current, complex tax system into a simpler gross tax, Crawford said. Another approach, favored by Chancy Croft, is broadening and increasing the state's petroleum property tax, which would make for a more stable source of revenue than steeper production taxes that rise and fall with oil prices.

Alaskans have been wrangling over oil taxes almost continuously for decades, but arguments have heated since 2013. That's when then-Gov. Sean Parnell signed Senate Bill 21, which controls the state's basic oil-tax structure.

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The legislation, which survived a 2014 referendum, cut taxes for companies at high oil prices, though officials in Gov. Bill Walker's administration have testified that it actually generates more cash for the state when prices are low.

But with persistent low oil prices and a long-term production decline sharply reducing the state's petroleum revenue in the past few years, some lawmakers — mostly Democrats — have been pushing for increased taxes.

They've said they want more cash from oil companies if Alaskans are going to be asked to give up a portion of their Permanent Fund dividends or pay broad-based taxes to help fill the state's multibillion-dollar deficit.

Lawmakers have passed two oil-tax bills in the past two years. But the legislation has focused largely on reducing companies' cash incentive payments and scaling back other tax deductions, with Senate Republican leaders opposing efforts to tinker with SB 21 and raise more cash from the industry.

Oil industry boosters argue that with oil prices still low, there's not a lot of excess money to help balance the state's budget.

"When is enough enough?" asked Kara Moriarty, president of the Alaska Oil and Gas Association. She also pointed to the fact that lawmakers, in approving oil-tax legislation earlier this month, already agreed to form a working group to analyze the state's tax regime and recommend changes for consideration next year.

[Alaska Legislature passes last-minute oil tax deal, but capital budget is still pending]

Industry supporters said they've been hearing rumors about possible initiatives. But Curtis Thayer, president of the Alaska Chamber of Commerce, suggested he's not particularly worried about efforts sponsored by Crawford or the Crofts, pointing to the defeat of their 2006 initiative.

"What's an initiative without a Harry Crawford attached to it?" Thayer asked. "They haven't been so successful in the past."

Chancy Croft acknowledged that the potential initiative's supporters "won't strike fear in the hearts of anybody." But he added that he thinks the public's mood would favor a campaign now.

"I just have a sense that the atmosphere out there is that people want something done," he said.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com

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