We’re about a third of the way through the Legislature’s 90-day session, and we’re getting some mixed messages from our state lawmakers in Juneau.
On the one hand, there are oil tax change proposals floating around the Capitol. There have been numerous hearings on oil tax structure as well as options for encouraging more production and more throughput in the trans-Alaska pipeline. Both topics are crucial to Alaska’s economic well being.
On the other hand, while some of the particulars of the proposals are different, there doesn’t seem to be any new point of view in the debate. Those in favor of changing the tax structure say the current tax structure discourages new investment. Those happy with the status quo point to the state’s current high revenue stream and call any change to it a “giveaway” to industry.
Meanwhile, the Legislature continues to pursue other distractions. Legislators are finding themselves sidetracked with topics like guns, constitutional amendments to make a school voucher program legal, new voter ID requirements, cruise ship wastewater, and encouraging the Boy Scouts to uphold their core values.
Certainly, there are numerous issues outside of economic development for the Legislature to address. That is, after all, why they were elected.
But Alaska’s economy is built on resource development, and over the past several years, that development has slowed. North Dakota surpassed Alaska in oil production last year, and at a 6 percent annual decline, our state’s grip on third may be tenuous. And over the past year, as the price of oil has climbed and dipped, some of the shortcomings of the current tax structure have been exposed.
Leaders in the Legislature need to make sure that, when it comes to sorting out the state’s fair share of oil revenue, lawmakers are keeping their eyes on the ball. With just two months left in the session, there’s a lot to get done. Addressing Alaska’s oil tax structure to ensure the state is competitive in attracting new investment should be a top priority.