Alaskans get chance to weigh in on oil taxes

For weeks now, a parade of oil industry representatives and their surrogates in state government have been on display in legislative committee hearings, press conferences and print, radio and television advertisements. All of them, it seems, have parroted the same talking points about the industry's commitment to Alaska and the wonderful benefits the industry provides to the state.

It is hard to watch an hour of local television programming without having to endure the ConocoPhillips-supplied propaganda/feel-good advertisement about how overtaxed the industry already is in this state, and how any further taxation might dampen enthusiasm for future exploration and development. The governor's &#822020/20” plan, which proposes to replace the outdated and inequitable system of industry taxation in place now, features a 20 percent tax rate and a 20 percent tax credit plan to stimulate interest in continued development.

It is a plan heartily endorsed by the big three oil producers in Alaska - BP, ConocoPhillips and ExxonMobil - and supported further by some of the Legislature's most powerful lawmakers, many of whom benefit personally from industry largesse in the form of &#8220consulting” contracts and campaign contributions.

Given the economic reality of world markets, it is no small wonder that industry is so gung-ho to be taxed at the rate the governor is proposing. For years, oil companies have paid, on average, about 80 percent of proceeds from the sale of a barrel of oil to the host country, while the combined federal and state take in Alaska has been closer to half that.

According to an analyst hired by the Legislature, since the per-barrel price of oil has climbed above $60, the world average tax rate has been closer to 92 percent. Still, industry reps have managed to keep a straight face when talking about the possibility of no longer having an interest in doing business here if the tax rate is increased more than what the governor has proposed.

They talk about economic stability and the need to know what the tax climate is here before any future interest can be gauged. All the while, development continues unabated in unstable and often dangerous locations in Central Asia and the Niger Delta, where tax and royalty rates are among the highest in the world.

On the page facing this one, former Republican legislator Ray Metcalfe, long a proponent of industry tax reform, puts forth a straightforward and convincing case for a more aggressive and comprehensive approach to state revenue enhancement through changes in the system of oil taxes. His plan would provide much-needed property-tax relief, permanent fund dividend expansion and a return of municipal assistance programs that would help a variety of Alaskans.

Saturday, from 9 a.m. to noon, after weeks of &#8220official” statements about the wonders of the governor's plan, and veiled ultimatums regarding the dangers of ignoring it, regular Alaskans get their say. The Senate Finance Committee is holding a public hearing from 9 a.m. to noon in Juneau. Legislative Information Offices around the state will teleconference the hearing, and anyone interested in giving testimony should arrive 15 minutes early to sign up.

Industry tax reform puts Alaska - and Alaskans - at a serious crossroads. There is much at stake for the kind of future Alaskans want to have for themselves.

With that in mind, the case laid out by Ray Metcalfe is hard to ignore. Yet, at official levels, that's exactly what is happening. Residents planning on giving testimony Saturday or contacting their legislators independently would do well to ask them why this is.