ANCHORAGE - Call it the oil tax smackdown.
Two powerhouse orators debated the governor's bill for a major reduction in oil production taxes.
The forum was the Anchorage Chamber of Commerce’s weekly “Make It Monday” event at the Dena’ina Center.
Democratic Senator Bill Wielechowski says capital expenditures on the North Slope have been strong since the tax system known as ACES was passed in 2007.
"We're at all-time highs right now -- $2.4 billion. Next year, it's slated to go to 3.2. The following year it's slated to go to $3.8 billion. We’ve never had more investment than we have on the North Slope today."
But former Representative and former gubernatorial candidate Andrew Halcro says that spending is mostly on maintaining 35-year-old infrastructure, rather than exploring for new oil.
"If Senator Wielechowski wants to lay his hand on the fact that capital improvement, or capital expenditures, are at an all-time record, where's the production?"
Wielechowski noted the production decline began in the late 1980s, long before ACES.
"If the philosophy that low tax rates leads to more investment, more production, works, why didn't it work for 30 years? Why didn't it work for 10 years at Kuparuk when you had oil prices tripling to all time highs? It didn't work then."
Halcro says there's no risk for the state in giving incentives for more production.
"If we pass meaningful tax reform today and it works, it sets our economy right, that's great. If it doesn't, Senator Wielechowski can do just what he did six years ago, he can go in and raise taxes. The state always has the last word."
Halcro said the legislature in 2007 acted in a fit of emotion after a public corruption scandal.
"It was about ignorance. It was about lawmakers actually espousing in public that companies make no investment decisions based on the tax rates."
But Wielechowski said there must be some guarantee about investment.
"Let's try a different approach. Let’s tie our tax rate to new production, new investment. You invest more, you produce more, we lower your taxes."
And of course the winner of the debate is in the eye of the beholder.
This debate grew out of Wielechowski’s challenge to governor Parnell, which Parnell declined.
Halcro, the new chamber president, then contacted Wielechowski to set up Monday's event.