NEWS: Representative Gara To Participate In Oil Taxation Debate

Public Forum Today Will Discuss Whether To Repeal And Rewrite SB 21

FOR IMMEDIATE RELEASE: July 14, 2014

Today, Monday, July 14, from 5:00 – 7:00 p.m., Rep. Les Gara (D-Anchorage) will join a four-person panel discussion presenting both sides of the debate on Ballot Measure #1, the August 19 repeal vote on the Parnell Administration’s 2013 Alaska oil revenue rollback, SB 21.

The forum will be videoteleconferenced live from Juneau to public libraries around Alaska, including to the Public Conference Room on the First Floor, next to the Assembly Chambers, in Anchorage’s Loussac Library.  Additional viewing locations include the three public libraries in Juneau, the Craig Public Library, and the Kenai Community Library.  Other participants include Juneau oil, gas, and mining expert attorney Lisa Weissler, former chief of staff to Governor Frank Murkowski Jim Clark, and former Murkowski Commissioner of Revenue and former Alaska Electric Light & Power president Bill Corbus.

“I hope for an informative debate so people can vote on facts, not on one-sided, slick advertising sound bites,” Rep. Gara said.  “Alaska law should treat Alaskans fairly when companies are earning windfall profits at high prices, and should require investment in Alaska in order to earn tax breaks.  The lion’s share of the state revenue SB 21 gives away allows oil companies to invest that money in other countries.  We’ve tried that, and through 2006, before ACES was passed, saw 5% – 8% production declines.  Just giving away money didn’t work then, and the Parnell Administration’s own projections show under SB 21 we’ll suffer a 45% decline in oil production by 2024.” 

Rep. Gara raised other points not mentioned in recent oil company-funded advertisements, including:

1.  Economist Scott Goldsmith’s recent report shows all oil from any oilfield unit established after 2002 will pay such a low tax rate, it will give Alaskans a near zero, or negative, “net present value;”

2.  The tax rate under SB 21 will fall continuously, from a current effective rate of 27% of company profits today, down to approximately 13% in the future: and

3.  Despite oil industry hyperbole, the amount of oil produced this year was approximately the same as the Administration predicted for when ACES was in effect.  In 2012, when ACES was the law, the Parnell Administration, in fact, told legislators oil production would increase in 2014 because of investments made under ACES (source: Parnell Administration presentation to Senate Resources Committee, January 27, 2012).

“Alaskans deserve to be equal partners, not junior partners,” Gara said.  The 13% rate on post-2002, so-called “new” oil, from fields that went into production under ACES, or were announced to go under production under ACES, is one of the lowest tax rates in the world among major oil producing provinces.

Gara discussed this disappearing tax rate in a recent guest opinion column:

http://www.alaskadispatch.com/article/20140515/alaska-should-beware-disappearing-revenue-after-oil-tax-reforms

“I wish my tax rate went down every year,” Gara said.  “SB 21 gives corporations a better deal than people.” 

Materials and source documents showing important details not mentioned in the ongoing oil company-funded advertising blitz are available at http://akhouse.org/gara/July2014-packet.pdf.

The forum is sponsored by “Juneau Votes,” a non-partisan community project seeking to improve voter registration, information, and turnout.

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