It is as if Alaska’s political left cannot — absolutely will not — shed its cut-your-nose-off-to-spite-
The industry, the left believes, is a cash cow that can be milked willy-nilly and without consequence whenever our betters decide Alaska’s bloated government needs even more cash. In fact, the industry is the left’s go-to revenue fix, even before it begins thinking about shaking down ordinary Alaskans or fishing loose change from beneath sofa cushions.
It does not seem to matter that the mean ol’ oil industry already carries the state on its back — a $180 billion return on our resources since statehood — or that the dismal science of economics would tend to make you believe taxing more sometimes gets you less. It does not seem to matter that there have been seven significant oil and gas tax law changes in the past dozen or so years. After all, who really needs fiscal stability or certainty in a business that plans and invests years ahead?
Unfortunately, less-than-stellar oil prices and dwindling state savings accounts again have Democrats eyeballing the industry. Alaska is running a budget deficit of about $2.5 billion, the North Slope has shed jobs, unemployment is higher here than most other places across the nation and the state is in a recession.
Add to that, Gov. Bill Walker and the Legislature have snatched about $1.4 billion out of the economy by slashing the Permanent Fund dividend in half — twice — and leaving the money in the Permanent Fund Earnings Reserve.
Walker also has delayed almost $1 billion in state-mandated oil tax incentive payments to the industry, payments aimed at increasing exploration and production. That, despite a potentially huge discovery announced by Caelus Energy. The company held up drilling an appraisal well at its Smith Bay find, citing $75 million in delayed oil tax incentive payments and uncertainty over Alaska’s oil tax system.
Against that backdrop, what is the Democrat-led House up to? Why, what else? House Resources Co-Chair Geran Tarr, D-Anchorage, wants to almost double the minimum tax rate on oil, increasing it to 7 percent from its current 4 percent.