In Alaska, everyone’s in the oil business

Both my wife and I are lifelong Alaskans and the proud recipients of 31 years of Permanent Fund Dividends that now total $35,343.41 for each of us.

Ditto for two of our three children.

While it’s great to get that annual deposit of oil money — and we’ve already signed up for this year’s — it’s more important to remember that this state runs on oil and a healthy oil industry means a healthy Alaska.

That’s why my wife and I are so concerned about Ballot Measure 1 on the August primary ballot. Ballot Measure 1 would repeal the oil tax reform the Legislature spent three years crafting and return Alaska to its failed tax policy called ACES.

Under ACES, Alaska’s production plummeted by more 205,000 barrels per day — 75 million barrels a year — and caused Alaska to miss out on the oil boom brought on by high oil prices.

While every other oil state increased production by double digits — 38 percent in New Mexico, 30 percent in Alabama, 56 percent in Colorado — Alaska was the only state to suffer a decline. The reason we now produce less oil than California is our old, confiscatory oil taxes that we will return to if Ballot Measure 1 passes.

So why should we care about something as obscure as oil taxes? In my case, it’s personal. While there is no direct link between Weldin Construction and the North Slope, I can feel a real uptick in business since oil tax reform passed. The reason is elementary.

Fully one-third of our state’s economy is related to oil and half the jobs in Alaska can be traced to oil, according to the University of Alaska’s Institute of Social and Economic Research.

ISER says two-thirds of the job growth since statehood has been due to oil — and oil is the reason we pay no state sales or income tax and why public spending per resident is double the U.S. average.

Oil picks up half the state’s education tab, and 90 percent of the general fund. That’s where we get the money for roads, schools, airports, our pools, libraries and Port Mackenzie. And that’s where we get the wages to pay our friends who build, operate and maintain these public facilities.

I lived in Alaska before oil became such an economic driver and understand what a difference it makes in the quality of our personal and business lives. I began my construction career working as a heavy equipment operator and foreman during the trans-Alaska pipeline construction on the North Slope and at the Valdez terminal.

That gave me the seed money to start Weldin Construction with a makeshift office in the family laundry room. We now employ 80 from our headquarters in Palmer and while we don’t directly work for the oil industry, like everyone else in Alaska, we prosper when the state prospers.

Our new oil tax is already working for Alaska. There is a renewed sense of optimism on the North Slope, fueled by large investment commitments by the industry. Small companies are so encouraged that they are making what for them are big, long-term capital outlays to support a North Slope renaissance — similar to the one we saw in Cook Inlet when we added meaningful tax incentives.

Proposition 1 would repeal our new oil tax — and it’s been sold to Alaskans based on disingenuous, if not duplicitous, statements. The biggest is the $2 billion giveaway. The truth is that under current oil prices, we’re collecting the same — or a bit more — revenues than we would have under ACES.

I don’t know about you, but I plan to vote for more production this August by voting no on Ballot Measure 1. If we don’t, we can get out our checkbooks and begin to write really, really big checks payable to the state of Alaska, and kiss our grandchildren’s future goodbye.

Richard Weldin is a 20-year Palmer resident and founder of Weldin Construction, which CIRI Services Corp. acquired in 2012.