Between 4 p.m. and 6 p.m. tonight, the Alaska House Rules Committee will take public testimony on a plan to cut the state’s subsidy of oil and gas drilling.
Rather, it will take testimony on a plan to not cut that subsidy.
The latest version of the bill contains no savings in fiscal year 2017. The state will be on the hook for as much as $825 million, money that will flow from Alaska taxpayers and the state’s savings accounts to some of the wealthiest corporations in the world.
We believe this is entirely unacceptable, and we think you do, too. Let the Alaska Legislature know it.
Testimony will take place in the Bill Ray Center, located right next to the new First National Bank Alaska building.
With the state facing a $4 billion annual deficit, lawmakers have proposed cuts to schools. They’ve proposed cuts to the ferry system. They’ve proposed cutting courts and troopers. They’ve proposed cutting everything except the subsidy for oil and gas drilling.
Last year, the state made no changes to the subsidy, and under this latest version of House Bill 247, there will be no changes until 2017. The state will not reach the peak of savings until 2022.
Let’s be clear: We must take action now. We cannot wait that long — our savings will not allow it.
Cutting the subsidy is key to everything else that follows. After all, would you be willing to give up half your Permanent Fund Dividend when you know that most of that money will be used to fund the subsidy?
Oil and gas drilling is a critical part of Alaska’s economy, but it is not the only part. State revenue should be used to provide state services, not fund corporate welfare.
Alaska’s current subsidy program allows companies to write off 35 percent of their losses by collecting tax credits from the state. Those credits can be rolled over, year after year.
They never expire.
When oil prices go back up and these companies begin making money in Alaska again, we will still be paying for their losses. They will be able to use their credits to write off their taxes, even if oil surges to $100 per barrel or more.
In our view, oil drillers and producers shouldn’t receive something denied to to ordinary Alaskans. In oil companies aren’t making money, they shouldn’t pay taxes. But, if the state doesn’t have money to pay out, it shouldn’t provide tax credits, which are as good as cash.
Our state government was intended to serve Alaskans, not oil producers. It’s time to remind the Alaska Legislature of that.
Show up to the Bill Ray Center between 4 p.m. and 6 p.m. and sign up to give your testimony. You’ll be allowed two or three minutes to speak your piece. Make them count, and don’t be afraid to wait. You won’t be speaking alone.
As University of Alaska Anchorage economist Gunnar Knapp has said repeatedly, if we don’t act now, it will be our children who pay for the consequences.
