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Alaskans: Prepare for advertising blitz by 'meaningful' oil tax reform supporters

  • Author: Amanda Coyne
  • Updated: September 27, 2016
  • Published August 30, 2012

Now that primaries are over and coastal management has been rejected, Alaskans can expect to once again be inundated with messages supporting oil tax reform. Alaska Gov. Sean Parnell, the oil industry allies for whom he once worked and the state's business community are all gearing up to ensure that voters don't forget oil taxes when they go to the polls.

It's been more than a year and a half since Parnell first proposed lowering taxes up to $2 billion a year on the oil industry and Alaska's big three producers -- ConocoPhillips, Exxon Mobil Corp and BP -- based on the premise that tax cuts would spur new production. Yet skeptical senators from both political parties have stood together as a unique group, the Alaska Senate Bipartisan Working Group, to repeatedly reject the governor's tax proposals.

Five Democrats in that group -- Sens. Bill Wielechowski, Hollis French, Bettye Davis, Joe Thomas and Joe Paskvan -- come November will face strong Republican challengers, challengers who may enjoy generous campaign funding from oil industry interests if they pledge to support the tax cuts. But the challengers will find allies elsewhere, too.

Candidates who support "meaningful oil tax reform" will likely find assistance, in one way or another, from pro-industry business groups like the Alaska Support Industry Alliance and the Make Alaska Competitive Coalition.

A coordinated campaign of media messaging

The Alaska Support Industry Alliance has donated $100,000 in funding to "We are Alaska," a so-called Super PAC formed by the alliance. Meanwhile, the Make Alaska Competitive Coalition recently sent out a fund-raising email to finance commercials that will air from September through November's election. The purpose of the media buy: to "support the message of those candidates who understand that Alaska will fail if we do not stem the decline of oil production," wrote founding member Jim Jansen.

"Timing is critical as we want to raise awareness of this important issue during this statewide election, which will determine leaders of our State who can have a direct impact on oil tax policy," Jansen wrote. "With a new State Senate, we believe now is the time for change to make Alaska competitive and remain economically vibrant."

Leaders of the Make Alaska Competitive Coalition include two well-known Alaska Democrats -- former Govs. Tony Knowles and Bill Sheffield. That Sheffield, who often holds fundraisers for Republicans, would join the coalition is not a surprise. However, that Knowles is involved in the group has taken some Democratic leaders aback.

Anchorage Sen. Wielechowski, for one, said he'd have to wait to see the ads before commenting. But if ads end up supporting Republicans, with the implicit or explicit endorsement of Knowles, Wielechowski admitted he'd be surprised.

"We share many values," the Anchorage senator said of Knowles. "We all have supported each other over the years."

Knowles said the Make Alaska Competitive Coalition wouldn't target individual legislators. And if it did, he wouldn't support the group.

"This campaign is not endorsing any candidate," he said. "My purpose in being involved is that we need to reach a business arrangement with the state's largest investor. I'm worried about Alaska diving off a fiscal cliff," he said. "Both Republicans and Democrats need to address the question about declining production in a responsible, businesslike way."

Makeup of the Senate bipartisan majority

This is how it works now: the Senate is split evenly between 10 Republicans and 10 Democrats. Some senators realized that such a split would result in complete grid-lock. So six Republicans joined with the 10 Democrats to create the coalition. The other four Republicans stuck together, creating their own "minority."

The hope among Republicans is that they can pick up enough seats in November to create a true conservative Senate majority. But it should be said that even if the Republicans do dominate, there's still no guarantee that the oil companies will get the $2 billion-a-year tax break they and Parnell want.

Two Republican senators, Bert Stedman of Sitka and Senate President Gary Stevens of Kodiak -- have led the bipartisan majority's rejection of Parnell's oil tax proposal. And two Republicans who upset incumbent senators in Tuesday's primary -- Soldotna Mayor Pete Micciche and Matanuska Valley resident Mike Dunleavy -- are not necessarily Big Oil puppets. In fact, both seem to be less inclined to give such a huge break to the industry than the candidates they both beat.

Dunleavy beat Sen. Linda Menard, a supporter in the bipartisan majority of Parnell's oil tax bill. And while Dunleavy believes that Alaska needs more oil flowing down the pipeline, he's unsure a tax break without any guarantees is the right way to go.

Micciche beat Sen. Tom Wagoner, a conservative bipartisan coalition member who Parnell appeared to support in the primary. Micciche, who works as a manager for ConocoPhillips, said he would not have supported Parnell's bill.

"There needs to be more. We need to tie a tax break into an increase in production," he said, adding, "I'm a pretty tough negotiator."

Four of the 10 Senate Democrats are considered "safe" and will likely be back in the Legislature next year; six others are considered vulnerable. Two Democrats in Fairbanks who will likely be targeted are Sens. Joe Paskvan and Joe Thomas.

Paskvan's challenger is former Republican lawmaker Pete Kelly, who has come out strong for oil tax breaks and who was once supported by Bill Allen, the disgraced oil man at the heart of Alaska's political corruption investigations.

Due to redistricting, Thomas and current Republican Sen. John Coghill will face-off. Although Coghill is the Senate minority leader, he has at various times lauded the Senate's work, and at times been critical of it for failing to pass oil tax legislation.

Coghill was a member of the House in 2007 when the current bill to raise oil taxes passed. He voted for the tax, but said he was troubled by certain aspects of it.

Click Bishop, a former Department of Labor commissioner, won the expensive, three-way Senate District C Republican primary. Bishop has testified to the Legislature that oil- and gas-related employment is up on the North Slope since the current tax regime was passed, contradicting Parnell and others who've tried to tie the oil tax break to jobs.

Wielechowski faces Republican Bob Roses in the general election. Roses is a former lawmaker who voted against the 2007 oil tax hike. He said that had he been in the Legislature when Parnell introduced his tax bill in 2011, he "probably would have supported it," and is well funded by those groups who did support Parnell's efforts.

Yet it's unclear how the pro-oil message will resonate with his constituents, at least according to Wielechowski.

The incumbent Democrat has been going door-to-door throughout the district. Wielechowski said voters promise to back him when they learn that the chiefs of BP Alaska and ConocoPhillips have been fund raising in order to defeat him.

"When I tell them that, they say, 'You have my vote,'" he said.

Clarification: Bob Roses views on supporting Parnell's oil tax bill have been changed.

Contact Amanda Coyne at

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