Both sides should be watching for effects of oil tax change

  • Saturday, August 23, 2014 3:28pm
  • Opinion

The dust is starting to settle on Tuesday’s primary election, with voters narrowly rejecting a referendum to repeal the oil tax law passed by the Legislature in 2013.

While interpreting voters’ intent in any given election is a bit like reading tea leaves, there should be at least one takeaway for state lawmakers in just how close the results on Ballot Measure 1 were. The “no” vote won by just 6,880 votes out of 154,136 ballots cast, or 52.23 percent to 47.77 percent. While Alaskans agree that changes to the state’s oil tax structure were necessary, it also seems that we don’t entirely trust the motivations of the oil industry or the state government.

Just as opponents of the new tax law barely waited for the ink to dry on the bill before promising a referendum, they wasted little time in vowing to track the promises made by proponents of the tax change — and to take action should the new tax law not live up to expectations.

Our response to that rhetoric is this: Those on both sides of the oil tax debate should be closely tracking the effects of the legislation. In fact, for those in the Legislature and the administration, that’s what we elected or hired you to do.

In this region, we’ve seen the boost that increased investment by the oil industry brings to our economy. To us, the jobs created as that money cycles through our community are as important, if not more so, as the revenue going into state coffers.

That’s a part of the issue that should be examined further. Roughly 90 percent of our state budget is dependent on oil. Our state’s economy is frequently described as a three-legged stool, with oil and gas being one of the legs. We’re heavily dependent on a robust oil and gas industry.

There is optimism that the oil and natural gas will flow for decades to come, but the state would be wise to take steps to diversify our economy. As hard as the state has worked to attract new investment in the oil and gas industry, it should be doing the same for other industries. For example, with burgeoning aerospace and high-tech opportunities across the state, now is the time to invest in the state university system to train the people who will work in that field.

Of course, much of the argument around the oil tax referendum has been about which structure is better for the state’s long-term economic health, and would therefore enable that type of investment. We agree that changes to the old tax structure were needed, and we too will be watching closely for results — not just for the state’s bottom line, but for the other opportunities a healthy, diverse economy can provide.

More in Opinion

This image available under the Creative Commons license shows the outline of the state of Alaska filled with the pattern of the state flag.
Opinion: Bringing broadband to all Alaskans

Too many Alaskans face barriers accessing the internet.

This photo shows a stack of pocket constitutions at the Alaska State Capitol. (Peter Segall / Juneau Empire File)
Opinion: Join us in voting against a constitutional convention

Voting no on a constitutional convention is vital to the well-being and stability of our state.

Michael O’Meara.
Point of View: Tell BOEM how you feel

It seems like BOEM should prioritize input from people most likely to be affected if leases are sold

The State of Alaska, Department of Administration, Office of Information Technology webpage. (Screenshot/
Cloud migration now underway will strengthen, enhance State IT systems

At the most basic level, cloud computing is the delivery of computing services remotely

Jessica Cook, left, and Les Gara stand in The Peninsula Clarion’s offices on Thursday, June 30, 2022, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Alaska Voices: Better schools for a better economy

We need leaders who care about our children’s futures

A resident casts their vote in the regular municipal election Tuesday, Oct. 6, 2020, at the Kenai Peninsula Fairgrounds in Ninilchik, Alaska. (Photo by Megan Pacer/Homer News)
Voices of the Peninsula: This is our borough and city

By Therese Lewandowski Another election already? Yes! This is our local elections… Continue reading

The Alaska Permanent Fund Corporation building is seen in Juneau, Alaska, in March 2022. (Michael S. Lockett / Juneau Empire)
Opinion: APFC keeps steady keel during turbulent year

FY2022 was a challenging year for all investors

Homer Foundation
Point of View: Nonprofits provide essential services not provided by cities

By our count, nonprofits provide more than 100 jobs to our communities

Opinion: Don’t get scammed like I nearly did

I should have just turned off the computer.

Kenai Peninsula Borough Mayor Charlie Pierce campaigns for governor as he walks in the 65th annual Soldotna Progress Days Parade on Saturday, July 23, 2022 in Soldotna, Alaska. Pierce resigned as borough mayor effective Sept. 30, 2022, to focus on his gubernatorial campaign. (Ashlyn O’Hara/Peninsula Clarion)
Voices of the Peninsula: ‘It has been an honor to serve’

Borough mayor gives send-off ahead of departure

Gov. Mike Dunleavy announces Friday, July 15, 2022, that 2022 most PFD payments will be distributed on Sept. 20, 2022. (Screenshot)
Opinion: A historic PFD still leaves work to be done

It is important to remember the dividend is not, and has never been, a welfare payment