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Paul Jenkins: Where stands Begich on oil taxes?

  • Author: Paul Jenkins
  • Updated: September 28, 2016
  • Published November 22, 2013

As the donnybrook over dumping oil tax reform percolates -- and it promises to be a knock-down, drag-out doozy -- some are wondering where Alaska's junior senator, Mark Begich, stands on the referendum that would repeal Senate Bill 21.

He has not been bashful about his position on any number of things. Eielson jets. Medicaid. Guns. Arctic oil issues. Energy. The Keystone XL oil pipeline. Pebble. Obamacare. He has had something to say about any number of the myriad issues affecting Alaska.

But he is remarkably taciturn about the immensely important repeal referendum appearing on next year's primary election ballot. At risk in August is the state's economy, its fiscal health and possibly a long-awaited gas line.

Others see it; they are stepping up. Two former Democratic governors, Tony Knowles and Bill Sheffield, have expressed opposition to any repeal. Just about everybody running for important state offices -- from governor on down -- is on record for or against the repeal. All the Republicans running for the GOP's nod to challenge Begich for his Senate seat have voiced opposition to the effort. Many business leaders and working unions oppose the repeal because it would cost jobs and investment.

But Begich? Nada. That seems odd, given the question's magnitude.

There is a tendency in politics to check the wind before jumping in. Leadership from the rear or the middle is appealing and safe and certainly less messy. Leading from the front on the tough issues is hard. The proposed oil tax reform repeal demands more of that.

A decision should be easy. SB21 replaced Alaska's Clear and Equitable Share oil tax. Make no mistake, ACES was lousy law. Even Democrats, who took a bad law proposed by Sarah Palin and made it worse, wanted it tweaked. It contributed to falling North Slope production and evaporating state revenues.

SB21 fixed the tax mess and set the stage to make Alaska attractive for industry and investment -- and the North Slope is coming alive. Nobody wants to go back. After all, who wants an individual income tax and a busted economy?

To make an informed decision at the polls, Alaskans should be hearing the pros and cons of a repeal from state leaders and others. For Begich, that might mean breaking with the Les Garas and Bill Wielechowskis and Hollis Frenches and their pals on the left who support the repeal. Or it could mean declaring his support for the repeal.

Either way, it is a tough decision for Begich but one he should make. And soon.

Gov. Sean Parnell, much to his credit, was the grown-up in the room when he put the kibosh on expanding the ever-more-expensive Medicaid system under President Obama's legacy health-care law.

Despite howling from the usual suspects, who could blame him? The expansion would have cost Alaska about $200 million over seven years. Medicaid already costs the state $1.5 billion -- with a "b" -- annually to cover about 140,000 Alaskans. And it is going to go up every year. By 2020, even without expansion, the program's tab likely will increase to $2.5 billion annually. The state also would get about $2.9 billion in federal funds over the seven years. Washington promises. Honest.

Everyone from the Alaska Chamber of Commerce to the Alaska Native Tribal Health Consortium to the Alaska Federation of Natives pressed him to expand the program, but he resisted.

The federal government promised to cover 100 percent of the expansion costs, dropping that to 90 percent by 2020, but Parnell has never trusted the feds to keep their word. Who can blame him?

The biggest problem with assuming more potentially budget-breaking debt is that Alaska's oil revenues are falling and the state already is taking in hundreds of millions of dollars a year less than only a few years ago. By one Institute of Social and Economic Research estimate, if spending remains the same and oil revenues continue sliding, Alaska will run out of money and through its savings by 2023.

Alaska joins more than 23 other states in refusing to expand Medicaid, but Parnell has put together the Alaska Medicaid Reform Advisory Group to take a look at the program.

Parnell has taken a lot of heat for doing the right thing. He did not deserve it.

Paul Jenkins is editor of the, a division of Porcaro Communications, which is performing services for the "Vote No on 1" anti-repeal effort.

Paul Jenkins


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