Oil-tax referendum raises questions about complexity of ballot initiatives

With a trio of ballot measures facing voters this fall, the head of a pro-business advocacy group is asking whether "nuisance" initiatives and referendums should be banned in the future, including those affecting such areas as mining or the state's oil-production tax.

Scott Hawkins, founder of ProsperityAlaska, believes the voting public should not decide complex tax questions or other measures that increase regulations or permitting of businesses.

"Oil taxation is an incredibly technical, complex, arcane subject. It does not belong on the ballot," said Hawkins, president of Advanced Supply Chain International in Anchorage, providing support to oil and gas, mining and other industries. "Our elected officials spent years and thousands of hours in hearings and hired experts and oil taxation is not a suitable subject for the ballot."

ProsperityAlaska works with other groups on such things as the Alaska Business Report Card, grading lawmakers' performance on the economy. The initiative question recently appeared on surveys sent to candidates for state office by ProsperityAlaska, the Alaska Support Industry Alliance, the Alaska State Chamber of Commerce, the Resource Development Council and other groups.

In the survey, Hawkins asked whether the rules for putting initiatives and referendums on the ballot need reform and are being "abused, resulting in a nonstop series of bad ballot measures that Alaska's business community must spend millions of dollars every 1-2 years to fight."

The question comes a month after primary voters rejected Ballot Measure 1, the citizen-led referendum to repeal the oil-production tax cut. The measure failed, after attracting millions of dollars in opposition funding from BP, ExxonMobil, ConocoPhillips and other businesses.

Hawkins presented his question at the recently held annual Alaska Oil and Gas Congress in Anchorage, in a presentation assessing the aftermath of the production-tax vote.


Anti-industry political organizations have matured, and victory came at a high cost to the business community, he said. To "win the peace" going forward, industry must continue increasing its investment in Alaska, advancing the state's long-sought LNG project, and reducing the level of declining oil production that is hitting the state treasury hard. With a $2 billion deficit possible this fiscal year, the business community will also have to support reducing state spending.

"It would behoove industry to get involved in that discussion," he said of the need for budget reductions. "Not living within our means puts the whole issue of tax reform in some jeopardy."

As for citizen initiatives that should be prohibited, another good example is the upcoming Ballot Measure 4 -- one of three ballot measures on the Nov. 4 general election ballot, Hawkins said in an interview after his presentation.

The ballot measure would create another obstacle for the beleaguered Pebble mine prospect, requiring legislative approval before such mines could be developed in Bristol Bay and a determination that the project would not endanger the fisheries reserve there.

"We might want to put our heads together and ask, 'how many times do we want to fight these battles?'" Hawkins said.

Restricting initiatives and referendums would require a constitutional amendment, a tough sell involving support from two-thirds of the state House and Senate and approval from the voting public. However, the constitution was changed a decade ago to require that more signatures be gathered from a broader area of the state. That raised the bar for groups gathering signatures, but doesn't appear to have slowed what shows up on the ballot.

"It made it a little bit harder, but it hasn't turned out to be an obstacle," said former legislator and political activist Ray Metcalfe, who launched Ballot Measure 1 and helped activists last year quickly collect more than 50,000 signatures to get the measure approved for the ballot.

He dismissed Hawkins' proposal with laughter, calling it "comical" that someone would think the Legislature and voters would accept such a change. The idea would benefit only a small group of people, Metcalfe said.

"These are people who would hobble the masses for the benefit of themselves," Metcalfe said. "That should tell the public a lot."

Hawkins said the question on the survey was his own, not ProsperityAlaska's or any other groups'. He founded the organization six years ago after he realized private industry workers offered an untapped political force.

With one full-time employee -- Hawkins volunteers his time -- the group also consists of business partners and board members, like Rachael Petro, president of the state chamber of commerce and Rick Rogers, executive director at the Resource Development Council.

ProsperityAlaska receives technical and some financial support from the national Prosperity Project run by the Business-Industry Political Action Committee based in Washington, D.C., Hawkins said. BIPAC bills itself as a longstanding nonpartisan group that helps its members improve private industry's political clout.

Hawkins said the group has no connection to Americans For Prosperity. The conservative political advocacy group based in Virginia was founded by industrialist David Koch. "That's an unfortunate coincidence," Hawkins said of the groups' similar names.

Hawkins said many in the pro-business community would like to see the "abuse" surrounding initiatives and referendums reined in. But how to go about doing that is a tough question. A broad proposal limiting initiatives was voted on at a state chamber meeting with about 120 people last year. Only one or two people supported it, he said.

"I voted against it, as it's way too broad," Hawkins said.

Rogers, with the Resource Development Council, said one shortcoming to initiatives is that they are decided in an up-or-down manner, without the ability for compromise and amendments provided as part of the legislative process.

He said the Resource Development Council supported the change 10 years ago requiring that signature-gatherers place greater emphasis on more areas of the state. The RDC reacts to ballot measures it supports or disagrees with, but it doesn't have a position regarding limiting initiatives or referendums.

"It is what it is, and it's part of the process," he said.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.