Oil tax fate likely tied to election

JUNEAU— Big oil drives this state, and this year it overshadows all other issues in the fight for control of the Alaska Senate.


The 20-member Senate is ruled by a coalition of 10 Democrats and six Republicans, and some GOP leaders, including Gov. Sean Parnell, want this alliance to end. For two years, the coalition has foiled Parnell’s attempts to lower taxes on the oil industry.

Parnell, who considers the coalition bipartisan in name only, has argued that lower taxes will lead to more oil production — Alaska’s economic lifeblood. But critics see his plan as a massive corporate handout with no guarantee that companies will invest more here.

No one in the Legislature has argued with the desire to reverse declining production trends and see more oil flowing through the trans-Alaska pipeline. The debate centers on how best to achieve that goal.

Democrats fear Republican majorities in both the House and Senate will mean a rubber-stamping of Parnell’s tax-cut ideas, which they say could have devastating economic repercussions. State Democratic Party Chairman Don Gray said when one group has so much power you lose necessary checks and balances.

GOP Chairman Randy Ruedrich scoffs at the suggestion that anything will be blindly accepted. The House is firmly in GOP hands, and the election is unlikely to change that.

At least 16 Senate seats are up for grabs Nov. 6, with redistricting setting up two races between incumbent senators and leading to a handful of other bitterly contested fights. Nov. 1 is the deadline for any write-in candidates.

Ruedrich believes Republicans will emerge with 13 to 15 Senate seats.

Among the more closely watched races: Sen. Hollis French, D-Anchorage, and Republican Bob Bell; Sen. Bill Wielechowski, D-Anchorage, and Republican Bob Roses; Sen. Bettye Davis, D-Anchorage, and Rep. Anna Fairclough, R-Eagle River; Sen. Joe Paskvan, D-Fairbanks, and Republican Pete Kelly; and Sens. Joe Thomas, D-Fairbanks, and John Coghill, R-North Pole.

French and Wielechowski have been among the staunchest defenders of the current tax structure, known as Alaska’s Clear and Equitable Share, or ACES.

Parnell has accused coalition members of doing nothing to turn around declining North Slope production, though the Senate late in the regular session passed a bill with provisions intended to encourage production from new fields. That proposal died in the House, where leaders said they didn’t have time to vet it. Before that, the Senate spent two months delving into the oil tax issue but the coalition failed to reach agreement on an overhaul of the tax structure.

Both the Republican and Democratic parties are focused on get-out-the-vote efforts, and the rhetoric has been ratcheted up on both sides. Parnell, for example, has said senators “with a spine for decline” are costing Alaskans tens of billions of dollars in untapped oil in Alaska’s legacy fields, a claim Paskvan calls unsupportable. Paskvan said there has not been testimony in his Senate Resources Committee that the governor’s tax cut plan would result in Alaskans gaining tens of billions of dollars.

Democrats, meanwhile, have set up a website with a cartoon casting as “heroes” the Democratic senators who opposed Parnell’s tax plan and Parnell as “Captain Zero,” the derisive moniker given him by U.S. Rep. Don Young in their 2008 U.S. House primary.

Big money has been raised both by candidates and groups seeking to influence the election.

The labor-backed Putting Alaskans First Committee, for example, has raised more than $284,000, and has run ads supporting the coalition and its stand on oil taxes. The Making Alaska Competitive Coalition, which includes businesses, organizations and individuals seeking changes to Alaska’s oil tax structure, has set a goal of raising between $300,000 and $500,000 to spread its message during the election and beyond.

The Republican Senate Leadership Committee, which aims to elect GOP candidates to state offices, plans to spend in the six figures. Political director Matthew Walter declined to say who the group would donate to but said the goal is to counter highly organized labor and “left-leaning” groups that are “putting tremendous resources into the races to send Alaska in the wrong direction.”

Jerry McBeath, a political science professor at the University of Alaska Fairbanks, has said he thinks the coalition has served Alaskans well over the last five years and has been a moderating force in what otherwise would have been a conservative-dominated Legislature.

Jim Minnery, president of Alaska Family Action Inc., has called on fiscal and social conservatives to band together to break up the coalition, which he says has been “disastrous” for those two groups. “Although most conservatives have fears about our economic future as the pipeline continues its decline, many Alaskans are primarily motivated to get to the polls by social issues,” he said in a recent email blast.

State Democratic party spokesman David Bremer countered with a missive of his own, saying that “what’s really going on here is that conservatives are apparently fearful they’re losing the oil tax debate, and they’re desperate to change the subject.”


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