We are writing in support of Ballot Measure 1 — the “Alaska Fair Share Act.” Here is why:
Right now Alaskans are facing down multiple crises: COVID-19, climate change, and our budget failure. They are all altering our way of life. But for one of them, the budget failure, there is an immediate fix — voting yes and passing Ballot Measure 1.
Our budget crisis started in May 2013, when by a margin of one vote (remember two state senators then worked for ConocoPhillips), the Alaska Senate passed Senate Bill 21, the billion-dollar oil tax giveaway. Since then, because of this new oil tax regime, the fiscal crisis has gotten worse.
In the five years before SB21, Alaskans received a total of $19 billion or $3.8 billion per year in production taxes after credits. In the five years since passage of SB21, because of the cashable credits that remained in place with the tax change, Alaskans paid more to the oil industry (in fact, $82 million more) than the major producers paid us in production taxes. Let that sink in.
This terrible reality has devastated our university system, crippled our ferries, cost us thousands of jobs, reduced our PFDs, zeroed out the capital budget and — maybe most shamefully — taken away our ability to support our seniors and schools. Our state’s founders would have never allowed this. But there is a way out: vote yes and pass Ballot Measure 1 — The Fair Share Act.
Ballot Measure 1 is aimed at Alaska’s largest, most profitable fields. It does not apply to the smaller fields now being explored and developed. Increasing the minimum production tax from four percent to a modest ten percent still keeps Alaska as competitive as any oil state. Alaska’s combined production tax and royalty payments will still be less than Texas, North Dakota or Louisiana. Ballot Measure 1 is written to be fair and reasonable.
If Ballot Measure 1 had been in place for the last five years Alaskans would have received an additional $5 billion (an average of $1 billion per year) in production taxes. We would not be in the current budget crisis.
The oil companies (through their “One Alaska” campaign) say “increased oil production is the best solution to Alaska’s budget problems.” If that were happening, it might be true. But it’s not. Oil companies said the same thing in 2014. It’s now six years later and this so-called best budget solution of increased production is nowhere in sight. And, why would it be when all the companies have to do is sit and harvest our big fields and pay us the bare minimum to do it? This is one of the lessons from 20 years ago during the BP-ARCO merger. Our huge oil fields have encouraged this behavior — low risk and huge rewards. But the big money is not going to Alaskans.
We were also promised more jobs. Again, we were misled. Alaska has lost over 5,000 jobs in the oil industry since SB 21 passed. They are spending $17 million to keep us where they want us. In the dark and giving them money to take our oil.
Oil has in many ways made Alaska rich. It has funded state government and provided us the opportunity to create the Alaska Permanent Fund. Voting for Ballot Measure 1 does not diminish this recognition. We can hail the contributions of oil and the failures of SB21 at the same time.
We have both been elected public servants. Seeing our students, seniors and working Alaskans bear the brunt of SB 21’s failure, and the ripple effect on our economy, is heartbreaking. The Institute of Social and Economic Research did an economic analysis showing that for every $100 million in budget cuts, roughly 1,000 jobs are lost (private and public sector.)
We Alaskans are tough people. We have been given great resource wealth so that we can have prosperity, not poverty. Without passage of Ballot Measure One, our current budget crisis will only magnify. Unthinkable as it is, poverty is on our doorstep.
We can do better. We can fight back with our votes. Please, join us and your fellow Alaskans and Vote yes for a better future, Vote YES for Ballot Measure One!
• Beth Kerttula is the former State House House of Representatives minority leader, and was an assistant attorney general in the oil, gas and mining section. Kate Troll served on the City and Borough of Juneau Assembly.