What's in Alaska's closet -- bell bottoms or empty pockets?

Spectrum, by Rep. John Coghill

In a recent opinion article, Rep. Eric Croft complains that Republicans have "transferred $70 million from the people of the state to large multinational corporations." Just not true! Money has not change hands; we laid out an incentive for increased production in our resources. This is a typical liberal Democrat rant that we are giving away something, without considering that it is something we don't presently have, or, in fact, that the incentive results in a much greater good.

For example, the tax credit offered in Senate Bill 185 for new oil and gas exploration is only available to the producers if they drill new wells. The economic activity generated by new exploration will exceed the "cost" of the tax credit by a factor of about four to one. In other words, for every dollar not deposited into the state treasury under the tax credit, the oil companies will spend four dollars buying local supplies and equipment, and putting Alaskans to work. We know that through the economic multiplier, these dollars turn over many times in our economy. Typically, though, liberal Democrats want those dollars to turn over in state programs first.

The most important point of the oil exploration tax credit is to make Alaska competitive with other oil-bearing provinces. Only a handful of exploration wells have been drilled in Alaska recently compared with more than a thousand in British Columbia in the same time frame. Before SB 185, the only incentive available for exploration was not from Alaska, but a federal tax deduction of 35 percent. As a result, oil companies paid a hard cost of 65 cents for every dollar they spent on exploration in our state, making Alaska dead last compared in global competition. Under the new law, the true cost in Alaska will be about 45 cents, or somewhere near the middle. Alaska must be competitive to prosper.

Our best interests are to develop our natural resources to sustain the economy and our beautiful state for the people of Alaska.

The passage of House Bill 11 was timely this year. Saving an extra 25 percent of royalty income from some leases was a good idea in the early 1980s, when we had sufficient income for state government.

But that is not the case now. This should certainly happen before we get serious about a broad-based sales or income tax. Just as any prudent homeowner would not keep savings from his paycheck while his house fell into disrepair, so also is it now time and reasonable to divert the flow of royalty income to the general fund.

The liberal Democrats' solution to the problems Alaskans face is to provide them with an income tax. They opposed repealing it in 1980, and they have wanted it back ever since. An income tax would take money from hard-working Alaskans and fund a whole smorgasbord of benefits to other Alaskans, under many programs created when the Democrats were in control of the Legislature during the 1970s and '80s. Presently their discussion starts and ends with spending and growing the size of government. We think it would be prudent to continue reducing the size and cost of state government, as the governor is doing, and do without an income tax.

The Democrats last session refused to support any reductions or any revenue measures, even some they had previously favored. Why? They said they wanted to vote on a "package," or a complete fiscal plan. I understand why they must be obstructionists, but under our Constitution laws are limited to a single subject so a "package" or "plan" must be individual and incremental so at the end of a session the bills passed are in effect a plan.

I call on the Democrats to put their votes where their rhetoric is.

In a reference to a nostalgic, simpler time when he wore bell-bottom pants, Rep. Croft noted that we have raised some fees that have been ignored for a long time. It is curious that liberal Democrats insist that the giveaway benefits of state government programs keep pace with inflation, and support inflation-proofing the Alaska Permanent Fund. But they will not support a reasonable increase in the business license fee, not changed since 1948, or the gas tax, not increased since 1961.

Casting doubts or accusing fellow workers with 'shell games' only discredits the process and reduces us to name calling rather than appealing to the issue or philosophy at debate. We Alaskans will grow and build and be creative even when hard times or tough choices call us to rise to the occasion.

Rep. John Coghill is a Republican representing North Pole.