Former Alaska legislator and gubernatorial candidate Les Gara is seen in this undated photo. (courtesy photo)

Former Alaska legislator and gubernatorial candidate Les Gara is seen in this undated photo. (courtesy photo)

Alaska’s great oil giveway

We can do better than giving away billions in oil company subsidies

By Les Gara

We can do better than giving away billions in oil company subsidies, and pretending we can’t support what people need to have opportunity and success in life. We’ve watched tens of thousands of people leave Alaska because they see no future for themselves and their families. A bright future is staring at us if we put people ahead of multinational corporations.

This year Alaska will give away over $1.3 billion to oil companies in unaffordable subsidies called “oil tax credits.” I don’t believe in a state where we give away the public’s resources and turn people against each other to fight over the crumbs. Under this governor, people have been told they have only false choices. It’s wrong to make people battle their neighbors over support for good schools OR a strong PFD OR good job training OR a university that can provide quality college and vocational education OR needed police in rural and urban communities.

While the rest of the world is lowering energy costs and putting people to work on renewable energy projects, this governor has done little. I’d rather control our own destiny, and not just hope for temporary federal money to help reduce high energy costs in rural and urban Alaska. Businesses don’t move to states with high energy costs and no commitment to public education.

We can build back an economy again, return construction, electrician, engineering and other jobs that will come with a restored construction and maintenance budget. State construction and infrastructure support is 75% lower than it was in 2014. That’s killed 6,000 good-paying private and public sector jobs.

We can put more police on the street in urban and rural Alaska, and hire teachers to reduce growing class sizes that prevent students from reaching their potential. We can join the 40 states that provide statewide voluntary pre-K, so students enter school ready to read and ready to learn, and so parents get relief from staggering child care bills.

I’m proud I’m the only candidate in this race who, when I had the chance in office, pushed for smaller class sizes and statewide pre-K, and acted to end the unaffordable oil company tax credits that are bankrupting our future.

This governor has turned Alaskans against each other to argue over school support, or a PFD, or a working Marine Highway, or repaired roads, airports and ports or dignity and opportunity for our children and elders. $1.3 billion in oil company subsidies is a lot of money. By ending them, we can build back this state instead of letting it fall apart.

I voted against these subsidies as a legislator. Gov. Mike Dunleavy voted for them as a state senator, and continues to give away our oil wealth as governor. I believe your interests should come before corporate interests.

How do we measure the magnitude of Alaska’s oil giveaway? The main source of oil revenue in Alaska today is our royalty because Gov. Dunleavy voted to decimate what used to be the other main source — our Oil Production Tax.

Texas charges a 100% higher royalty on their state lands than we do — 25% of the value of their oil instead of our 12.5%. Private landowners who own the oil in much of the Lower 48 negotiate 50% — 100% higher royalties than Alaska does. While “new” fields in Alaska charge a slightly larger royalty, the 2013 law Dunleavy voted for effectively nullifies that higher royalty by giving away even bigger tax credits on those fields.

Want a few other measurements? ConocoPhillips is the only Alaska oil company required by federal corporate law to reveal their Alaska profits. I’d make all companies reveal their Alaska profits, so we have transparency when companies demand tax breaks. From 2016 to their latest quarterly report, ConocoPhillips has made $6.7 billion more in profit in Alaska than in all the Lower 48. They’ve made billions more in profit here that in the Lower 48 and Canada combined.

The current tax credit system reduces Alaska’s fictional 35% tax on oil company profits to a fraction of that rate. Companies get these credits regardless of whether they invest in Alaska. Exxon could take every penny of their Alaska subsidies to Houston or Louisiana or Libya, and they’d still get them.

We shouldn’t give away our wealth to corporations at the expense of Alaskans.

We can build a better future, with more jobs, better schools, a stronger PFD that gets paid, not just promised. We can build an Alaska we believe in again.

I’ll do that instead of forcing our state into self-imposed poverty.

Les Gara was a legislator from 2003-2018. He’s worked as an assistant Alaska attorney general on Alaska’s civil prosecution of Exxon following the Exxon Valdez Oil Spill. His wife Kelly is a hospital wound care specialist. They’ve lived in Alaska since 1988.

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