Walker’s plan to decrease deficit hurts Alaskans

  • By Rep. Lynn Gattis
  • Monday, July 11, 2016 10:08am
  • Opinion

Alaska is facing an unprecedented budget crisis. This is largely due to a continuing decline of oil production, a precipitous drop in oil prices, and an unwillingness by some to make the necessary changes in state government to save money. How we respond to this crisis will define what Alaska and our economy will look like over the next decade and beyond.

Governor Bill Walker’s vision for dealing with this crisis is extremely different from mine. The governor wants to impose an income tax and a sales tax on hard working Alaskans. He also wants to raise taxes on the fishing, oil, and mining industries, as well as products like motor fuels, tobacco, and alcohol. On top of all that, he wants to restructure the permanent fund dividend program, taking the majority of Alaskan’s dividend to spend on government.

Likewise, because of his antagonistic behavior towards the oil industry, these extra costs to Alaskans will likely continue to increase well past his time as governor. His recent attacks could decimate resource development in Alaska and jeopardize the only economic development he seems interested in – the gas pipeline – which has very questionable economics in the world market already.

All of these actions are contrary to my point of view. I don’t believe that we can tax ourselves into prosperity, or that the Alaska should pursue projects when private industry is skeptical of whether or not they will even pencil out.

I am simply not willing to vote for any new taxes or reductions to your permanent fund dividend until Alaska makes significant structural changes to Alaska government and further reduces spending. More government has never been the solution in Alaska, and it certainly won’t be this time.

Additionally, I’m extremely troubled by Governor Walker’s recent attacks on our oil industry. Alaska’s North Slope is still a world class resource-rich basin. The best way to solve the Alaska’s financial problems is to stop the decline of our oil production. With the right tax and regulatory policies, the North Slope can and will be the answer to Alaska’s financial woes. However, Governor Walker’s recent maneuvers, first on newer independent companies and now the major producers, are putting that in jeopardy.

Senate Bill 21, which was passed just a few years ago, provided incentives for companies willing to invest and explore for oil and gas. New companies came to Alaska, drilled, made discoveries, and are putting new fields into production. Several very promising discoveries have been made.

Even in the face of cratering oil prices and shrinking exploration budgets, Alaska has continued to attract new players who are investing in exploration and development that will lead to more production, more jobs, and more revenue for the Alaska.

These companies invested on the North Slope based in part on the Alaska’s promise to partner with them through the credit program, which was broadly supported. Unfortunately, all of this momentum is now in jeopardy because of Governor Walker’s reckless decision to veto money to pay for previously earned tax credits for the second year in a row. After this devastating action against the independents, Governor Walker is now threatening the majors by claiming they are in default on their Plan of Development for Prudhoe Bay.

A lot of companies are now wondering if Alaska is a place that can be trusted. I fear the Governor’s actions will ensure that oil production in Alaska declines. Some of the smaller independent companies doing business here will likely be driven into bankruptcy. Alaskan vendors will be unpaid and Alaskans will lose jobs. Many promising drilling projects will be postponed or cancelled. And Alaska will be known around the world as an unstable sovereign that does not keep its word. Meanwhile, Governor Walker only seems to care about one thing: building the AK LNG project as fast as humanly possible. But the Governor cannot connect the dots. The AK LNG project has little chance of success because nobody will partner with a state that can’t be trusted and refuses to honor its commitments.

Further, his ranting desires for the Alaska to “go it alone” simply are too costly, complex, and mostly importantly – too risky for Alaska. My perspective is very different than Governor Walker’s. Talking with more and more Alaskans, it is appearing that the governor insistence on stubbornly pulling against the will of Alaskans, will get us nowhere. Alaska’s economic future is not a piece of rope we can play tug of war with.

— Rep. Lynn Gattis

More in Opinion

Alaska Chief Medical Officer Anne Zink promotes getting immunized with the flu shot this winter. (Photo courtesy Alaska Department of Health and Social Services)
Immunize when you winterize

An annual flu shot plus the COVID-19 vaccine protects Alaskans and our health care system, too.

(Peter Segall / Juneau Empire File)
Opinion: Dunleavy’s first act as governor was unconstitutional

That’s according to a ruling by Senior U.S. District Judge John Sedwick.

This Aug. 3, 2021, photo shows Juneau International Airport.  The Federal Aviation Administration shared recommendations on Thursday for improving aviation safety in the state. (Michael S. Lockett / Juneau Empire File)
Opinion: How the FAA will improve the margin of aviation safety in Alaska

Alaska depends on aviation more than any other state…

Central Peninsula Hospital is seen in Soldotna on Wednesday, Oct. 13, 2021. (Camille Botello/Peninsula Clarion)
Voices of the Peninsula: Perspective of an educator in a ‘high-risk’ group, part 2

During some of the darkest days of my time in ICU, it was obvious where we all live is a special place.

Lawmakers havereturned to the Alaska State Capitol for a fourth special session. (Peter Segall / Juneau Empire File)
Opinion: Revenues should be determined before more PFD spending

The governor believes the dividend drives the entire calculation. Sadly, he has it backwards

Ronnie Leach. (Photo provided)
Point of View: For Domestic Violence Awareness Month, #weareresilient

At the onset of COVID-19, we expanded our services in a way to ensure COVID-19 consciousness.

Rep. Don Young talks during a June 2021 interview with the Empire. (Ben Hohenstatt / Juneau Empire File)
Opinion:Where’s Don Young when America needs him?

Once upon a time, avoiding political controversy was completely out of character for Young.

Peter Zuyus
Voices of the Peninsula: Seniors appreciate vaccination efforts

To those who have worked to encourage vaccination we say: Be proud, you are, in fact, saving lives.

Jackson Blackwell (courtesy photo)
Voices of the Peninsula: Carbon dividends are the bipartisan climate solution

By levying a gradually increasing price on carbon, U.S. emissions will be slashed by 50% in 15 years.

Gov. Mike Dunleavy holds a press conference at the Capitol on Tuesday, April 9, 2019. (Juneau Empire file photo)
Dunleavy: Facts Matter

Political opportunists care more about spreading political untruths than accepting the facts.

Steve Hughes. (Photo provided)
Voices of the Peninsula: We are all victims of COVID-19

It is disturbing to hear, as a triage nurse, the many reasons cited for not getting a vaccine that are based on misinformation.

Opinion: LGBTQ+ Alaskans deserve respect and dignity

Like every state that lacks equality, we need federal protection.