• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
2m 2s

Pipeline value discrepancy settled in Supreme Court

By Emily Carlson 12:56 AM February 20, 2014

Ruling means the boroughs stand to collect hundreds of millions of dollars more in property taxes.

ANCHORAGE – It was a huge victory for some Alaska communities after the Alaska Supreme Court ruled on how the state should determine the value of the trans-Alaska pipeline.

For years Fairbanks, Valdez and North Slope boroughs have claimed the state was devaluing the pipeline, costing them hundreds of millions of dollars in property taxes.

In 2006, the boroughs filed a complaint with the State Assessment Review Board.

The problem was a discrepancy of value. The oil companies claim the pipeline is only worth $850 million, the state said it was worth $3.6 billion, while the boroughs said it’s worth more than $11 billion. So who’s right? On Wednesday, the Alaska Supreme Court said the boroughs are calculating correctly.

The ruling clears up the long-debated question as to how the state should determine how much the pipeline is worth. A former member of the State Assessment Review Board told KTVA the state had been using an approach that assumed the pipeline would last 30 years.

The boroughs argued for a different approach, assuming that the pipeline will last 60 to 90 years. That’s the approach the Supreme Court ruled was correct. It means the boroughs stand to collect hundreds of millions of dollars more in property taxes.

“I think this decision is a victory for Alaskans and for Alaska communities,” said former State Assessment Review Board Member Marty McGee.  ”It’s an appropriate decision and it’s fair. That’s what we in assessment try to base it on. If you have to pay a tax on your home based on the value of your home, then the owners of the pipeline should pay a tax based in fair value of the pipeline.”

McGee was dismissed from the board last month. He claims it was a move by the Gov. Sean Parnell to stack the board in favor of the oil industry.

However, a Parnell spokesperson denied that claim, saying the governor wanted a fresh perspective on the board.

As for Wednesday’s Supreme Court ruling, spokeswoman Sharon Leighow said the governor hasn’t had a chance to read the 50-page ruling.

“Although we are still reviewing the decision, the state’s methodology, upheld by the court, leaves more money in the people’s treasury,” she released in a statement.

The ruling stems from a dispute that stretches all the way back to 2006. That means property owners now owe municipalities seven years of back taxes. What still isn’t clear is if they will also owe interest on those back taxes.

Latest Stories

  • News

    Alaska Federation of Natives Convention Day 2: Courting the Native vote

    by Rhonda McBride on Oct 24, 23:31

    Candidates have traditionally courted the Alaska Native vote at the Alaska Federation of Natives convention. But this election-season ritual has reached a fever pitch this year. Some of that could be due to the formation of the Unity ticket; the merged campaigns of Bill Walker, who was running as an independent candidate for governor, and […]

  • News

    Steese Highway collision kills 1

    by KTVA CBS 11 News on Oct 24, 23:00

    One person is dead and another injured following a head-on crash outside Fairbanks Friday night, Alaska State Troopers said. The collision on the Steese Highway near Hagelbarger Avenue was reported to troopers in Fairbanks just before 7:15 p.m., according to an AST dispatch. One person was seriously injured and later succumbed to their injuries, troopers […]

  • News

    South Anchorage crash injures 1, temporarily closes highway

    by KTVA CBS 11 News on Oct 24, 22:15

    Both lanes of the Seward Highway were closed for more than two hours Friday evening following a two-vehicle collision that left one person hospitalized. According to the Anchorage Police Department, the crash happened just after 5:30 p.m. near the highway’s intersection with O’Malley Road. A vehicle heading north crossed the median and hit another vehicle […]

  • Weather

    Evening News weather, Oct. 24

    by KTVA Weather on Oct 24, 19:58

     

  • News

    Dam expansion increases Sitka’s power production

    by Heather Hintze on Oct 24, 19:44

    The Blue Lake Project in Sitka is set to dramatically increase the production of hydroelectricity for the city. Five miles out of town, up a one-lane dirt road, tucked into the mountains, construction crews work on the expansion in the windy canyon. The project is so massive it takes Alaska’s largest, 600-ton crane to make […]

  • News

    Anchorage mom loses boxing match, still wins big

    by Lauren Maxwell on Oct 24, 19:18

    Maria Edwards had never boxed before she got in the ring Thursday night at the Egan Center. But she had a good reason for taking part in Anchorage’s Thursday Night Fights: She was trying to earn enough cash to afford gymnastic lessons for her 3-year-old son. Edwards had her eye on the prize money, $50 […]

  • News

    Complaints lead to towing ordinance update

    by Bonney Bowman on Oct 24, 18:46

    Anchorage residents who are angry over inconsistent and often exorbitant towing fees may soon see some relief. The Anchorage Assembly discussed a proposed amendment to the municipal towing ordinance Friday. The amendment would cap the price of non-consensual tows, such as when cars are towed from private lots, at $225. It also prevents towing companies from […]

  • News

    Assembly debates software program audit

    by Bonney Bowman on Oct 24, 18:06

    Anchorage Assembly members met Friday to discuss how to best move forward with the municipality’s troubled software overhaul. Members debated conducting an independent audit of the SAP program, which is designed to automate many aspects of government, including payroll. But the program is three years overdue and more than $20 million over budget. Assembly members […]