SB21 forum aims to educate on complex tax issue
On August 19, Alaska voters will decide the future of the state’s current oil production tax, though it’s still a complex subject for many people planning on heading to the polls.
“I think a lot of people are not aware or are actually confused on the issue,” said Penelope Wells, who watched a public forum on SB21 at the Loussac Library Monday night..
The discussion was broadcast live from Juneau to libraries in Anchorage, Craig, Kenai, Sitka and Dillingham. People watching could also ask questions to the panelists: Bill Corbus, former revenue commissioner; Jim Clark, former chief-of-staff for Gov. Frank Murkowski; Rep. Les Gara, an Anchorage Democrat; and Lisa Weissler, an attorney specializing in oil and gas issues.
“It’s not because they like Alaska that they are here,” said Clark, referring to the state’s big oil production companies. “They are here to make money and capital is going to flow to where they make the most money and we have to be competitive.”
Clark supports the current structure — SB21 — and said he plans to vote against a repeal effort in this year’s general election.
Gara said the tax deductions are too high under SB21.
“We own the oil. It’s how we fund our schools, our construction jobs, our roads, our infrastructure,” Gara said.
Gara said public revenue will continue to decrease because under SB21, oil from fields created after 2003 is taxed at a lower rate.
“The tax rate is so low that it produces almost either no worth to the state or it costs us money — negative worth,” Gara said. “No private company would ever take that deal.”
Weissler agreed and said we should revert back to ACES.
“Over time, an increasing percentage (of oil) is going to qualify as new oil and be taxed at a low rate and the system will break down,” Weissler said.
Weissler argued that SB21 doesn’t encourage investment in Alaska because the tax credits that companies receive don’t have to be spent in state.
Corbus disagreed, and said SB21 will result in increased revenue to the state in the mid to long-term.
“And if we go back to ACES we’re going to see a decrease in production and lower revenue to the state,” said Corbus, who argued many big oil companies have already indicated they’ll increase investment since SB21 was enacted in 2013. “I believe if we go back to ACES the industry will take that as a sign that Alaska is not a good place to do business.”