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Compass: To win second battle of statehood, Alaska must repeal oil tax giveaway

  • Author:
  • Updated: September 28, 2016
  • Published January 18, 2014

More than a half-century ago I joined many great Alaskans, like Bill Egan and Mildred Herman, at our state's Constitutional Convention. We gathered to write the Constitution as part of the statehood movement, and one of our primary motivations was the desire to control our own resources.

Prior to statehood, Outside interests controlled Alaska's resources. Today, with the battle over oil taxes, we again find ourselves fighting for control of our resources. I am a primary sponsor of Proposition 1, the referendum to repeal Gov. Parnell's oil Giveaway. When we wrote the Constitution, we specified that the legislature shall ensure Alaskans receive the "maximum benefit" from resource development. Gov. Parnell's giveaway is an attack on that principle and an attack on our sovereign control over Alaska resources.

As I write this, Outside interests have already poured over a million dollars into a glitzy ad campaign to defeat Proposition 1. When I see their barrage of media advertising, I am reminded of the long battle for statehood and for control of our resources: We didn't fight for statehood so Outside political consultants could take our oil wealth out of Alaska.

Fortunately, Alaskans beat Outside interests in the past -- and we can beat them again by passing Proposition 1. Prior to statehood, Outside fishing interests wiped out many of our great salmon runs by using fish traps that blocked salmon from spawning. Predictably, those interests opposed statehood, because they understood that local control would mean keeping more resource wealth here in Alaska.

Even before the fish wars, Russians colonized parts of Alaska to harvest sea otters and fur seals. Local residents lost their resources while Outsiders benefitted. Because of experiences like these, at the Constitutional Convention Ernest Gruening said we must prevent Alaska from returning to colonial status.

Today, we are engaged in a "second battle for statehood," for control of our own resources. Multinational interests with unlimited resources want to take our oil without meeting the Constitutional promise that Alaskans receive the "maximum benefit" from resource development. We can't afford to go back to the days when we were a colony for wealthy outsiders.

There is an irony in this debate. Proponents of the Oil Giveaway, SB 21, claimed it would spur production. Yet, now that the bill passed the legislature, even Gov. Parnell's own staff projects a 38 percent decline in oil production. Why? Because the giveaway didn't include any requirement that companies produce more in order to get tax breaks. In fact, the giveaway repealed exploration and production incentives.

Gov. Parnell now is stuck in a fiscal disaster. He inherited budget surpluses, but now we face deficits of $1-$2 billion annually while oil production declines. The state accumulated $17 billion in reserves under ACES, and now these are to be dissipated by billions of dollars a year.

Thus, because of the oil tax giveaway and other factors, we're stuck with multibillion dollar deficits and declining oil production, the worst of both worlds. It is time we assert our rights as the Owner State.

It won't be easy to fix this mess, but we can get started by voting YES for Proposition 1 in August, repealing SB 21, and designing an oil tax system that is fair to Alaskans as well as to oil producers.

Too many great Alaskans fought for statehood to give up control over our resources now. We've seen how Outsiders will attempt to take our resources if we don't firmly assert our rights as resource owners.

I remember what it was like when Alaskans lacked state sovereignty, and don't want to return to that era. Please join me in voting "YES" on Proposition 1 to repeal the oil giveaway.

Vic Fischer is director emeritus at the Institute of Social and Economic Research at the University of Alaska Anchorage. He was a delegate to the Alaska Constitutional Convention in 1955-56 and served in both the Territorial Legislature and state Senate.


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