For immediate release November 14, 2011
Rep. Gara Exposes Oil Giveaway Shortcomings at UAA Debate
Giving oil revenue away for nothing didn’t work before and won’t work now
Today, Representative Les Gara articulated why giving away billions of dollars of Alaska’s oil revenue as the governor proposes will not increase development on the North Slope but will instead wipe out the $15 billion in savings Alaska has achieved under the current law, putting Alaska’s economy, now and into the future, at great risk. Rep. Gara made his case in a debate on the governor’s proposed multi-billion dollar oil giveaway hosted by the Union of Students (USUAA) student government at the University of Alaska Anchorage.
“His plan is based on a hope, wing and prayer that companies will not take that $1.8 billion a year in tax breaks, and just send it to executives and shareholders in Texas and London,” said Gara. “Alaska has tried low taxes like the Governor plans before, and it was a disaster. Until 2006 we had a system that essentially guaranteed a 0% Production Tax on new fields. Under that law, production was falling faster—at almost 9% a year—and we had 40% less investment and employment on the North Slope. Giving away money in low taxes, and just hoping companies don’t send that money to their shareholders and executives in London and Houston, like they did before 2006, simply doesn’t work,” said Rep. Gara.
In the debate with a member of the Parnell administration, Rep. Gara presented facts showing exploration and jobs on the North Slope are both higher under the current tax structure – which requires companies to invest in Alaska to get tax breaks – than under previous tax regimes where oil companies paid little to no tax on most fields, and weren’t required to invest in Alaska to achieve tax breaks. Instead of the governor’s giveaway, Gara proposes in House Bill 231 that Alaska only grant tax incentives to companies that drill in new areas and build processing facilities to put new oil into the pipeline.
“The governor wants to give away billions without even a commitment from industry as to what Alaska will get in return,” said Rep. Gara. “That’s a deal no CEO would ever make for his company. Our resource is worth more now than ever, and if Alaskans are going to forgo any of that value, we better know exactly what we’re getting in return.”
At the end of the program, a member of the audience asked if others in the room leaned more toward Rep. Gara’s position or toward the governor’s. After hearing both sides for almost two hours, the audience overwhelmingly sided with Rep. Gara.
Watch the whole debate here: http://www.livestream.com/usuaastudentgovernment.