Fiscal gap plan supported by Alaska's third parties

MAT-SU - Four parties have teamed up in support of a fiscal plan introduced by Republican Moderate Party Chair Ray Metcalfe recently -- a plan that Metcalfe says would fix Alaska's financial problems far into the future.

In a nutshell, Metcalfe recommends increasing Alaska's percentage of profit-sharing agreements between the state and the oil companies operating within the state.

Although Metcalfe admits hard numbers are often elusive to obtain, he estimated that Alaska brings in about 33 percent of the profit on each barrel of oil sold. Citing information he gathered from the International Petroleum Fiscal System Database, Metcalfe theorized that other profit-sharing agreements around the world average 79 percent to the host state and 21 percent to the operator.

"Our royalty rate on our big enchilada, Prudhoe Bay, is only 12.5 percent, which, until 1997, was Alaska's minimum allowable rate," Metcalfe wrote in his fiscal plan proposal. "In 1997, our Republican-controlled, bought-and-paid-for Legislature lowered our minimum allowable royalty rate in the Cook Inlet from 12.5 percent to five percent. Corrupt leaders in our government are giving away our resources in exchange for enough money to get re-elected."

Three other Alaska parties have come out in favor of at least portions of the plan -- the Alaska Independence Party, the Green Party of Alaska and the Alaska Libertarian Party.

John Wayne Glotfelty, a vice-chair of the AIP, said Metcalfe's reasoning struck a chord with his party members. The plan, he said, was sent to the AIP executive board, where it was fully endorsed.

"It's a good plan," Glotfelty said. "It doesn't involve increasing taxes -- it involves cutting out tax evasion by oil companies. The oil companies paid for the hardware back in 1982 -- everything they've been making since 1982 is pure profit."

"I think that Ray has come up with a good idea that deserves consideration," Green Party founder and U.S. Senate candidate Jim Sykes said. "Many people don't realize that oil companies get an income-tax break that's not available to any other [corporation]."

Sykes said while the plan has not been endorsed by GPA's statewide council -- the council has not yet discussed the plan and will be meeting in the coming weeks for that and other purposes -- several individual candidates do support the plan. Among them are GPA's gubernatorial candidate Diane Benson.

Libertarian Party chair Gordon Hartlieb, Saturday, said he wasn't altogether sure why the Libertarian Party was listed on a press release discussing multi-party support of the plan that Metcalfe sent out last week.

Hartlieb said Metcalfe presented the plan to a Libertarian membership meeting recently, where it had mixed results.

"There are some aspects of the plan that we don't disagree with," Hartlieb said. "I wouldn't even say that many of the members there agreed with the plan in its entirety -- but there were parts of the plan many of the members thought were acceptable."

One of the points several Libertarians disagreed with Metcalfe on was the key point that caused other parties to rally behind the plan -- the emphasis on making oil production companies pay what Metcalfe claimed was their fair share. Hartlieb said the party rarely supports increased taxes -- no matter who is being taxed.

Hartlieb explained that one of the Libertarian Party's key foundations is the importance of reducing the size of -- and taxpayer dependence on - the services provided by governmental bodies. But, he said, there was some middle ground. Several Libertarian party members agreed that Metcalfe's proposal to treat the permanent fund more like an endowment fund could prove useful.

The full text of Metcalfe's proposed fiscal gap solution can be seen online at www.freedomwriter.com by clicking on the "Guest Forum" option.