Looking out for the borough's interests

At its Tuesday meeting, the Kenai Peninsula Borough Assembly made an important decision to protect the borough’s financial interests.

The assembly approved a measure brought forward by Borough Mayor Mike Navarre to work with other municipalities to hire a consultant to analyze the potential impact a natural gas pipeline would have on municipal tax revenues.

While a gas pipeline project, especially one with a terminus and gas liquefaction plant in Nikiski, would no doubt be a boon to the borough’s economy, the borough administration has some concerns, especially with a part of the proposed agreement that would allow producers to make a payment in lieu of taxes, instead of ad valorem taxes, on oil and gas property. In other words, the state could negotiate a payment in lieu of taxes from the oil and gas industry that’s significantly less than revenues collected under the current tax structure based on the assessed value of oil and gas property.

According to a memo to the assembly from Navarre, the agreement with producers could apply the payment in lieu of taxes to existing oil and gas property as well as future development, regardless of whether a pipeline is ever built. Bills up for consideration in the Legislature would authorize the commissioner of the state Department of Natural Resources to engage in confidential negotiations to develop terms for a natural gas pipeline.

Navarre is working with mayors from other affected municipalities, including the Fairbanks North Star Borough, the North Slope Borough, and the city of Valdez to ensure that municipalities are able to participate in discussions that would significantly impact local tax revenue.

Fiscal concessions may be necessary to get a pipeline built, but those impacted should have a voice in how far concessions go. With the state and producers finally moving forward on the project, the action by the borough assembly and administration is a smart and prudent move.

More

Op-ed: A new direction on education

American public school students fall well behind students around the world in math and science proficiency. This is not debatable. According to the Trends in... Read more

State must continue to support fight against opioid abuse

This past week, Gov. Bill Walker signed an administrative order directing state agencies to pursue grant funding to help fight opioid abuse across the state.... Read more

Op-ed: How much do you tip the spy?

You’ve got to eat at the terrace dining room at Mar-a-Lago in Palm Beach, Florida. Not only does it have a wine menu, a food... Read more

What others say: Mixing fish and politics in Oregon decision

In an astoundingly ignorant and heavy-handed display of putting urban political correctness ahead of rural jobs, Gov. Kate Brown last week dictated that the citizen... Read more