Daily Sitka Sentinel

March 8, 2013 Letters to the Editor

    Stedman: Right Balanced
    Needed in State Oil Tax

By Sen. Bert Stedman

Alaska State Legislature
    Recently I’ve been quoted in the media urging the Senate to tap the brakes on SB 21, the governor’s oil tax reduction bill. I firmly believe that a more deliberate and calculated approach is needed in order to strike the right balance in our oil tax structure and I’ll explain why. The people of Alaska own a world-class oil basin on the North Slope.
    The revenue generated from our legacy fields, namely Prudhoe and Kuparuk, provides funding for 90 percent of our state services. The mechanics of that tax system and the level of government take derived from it are front and center in the oil tax debate. It is a one-time payment for the removal of the people’s resource. According to the Department of Revenue’s fiscal note for SB 21, which describes the fiscal impact to the state, the passage of this bill will reduce the state’s revenue received from oil production by an average of $750 million per year through 2019. At the same time we debate how much less the state should charge the oil industry to extract our resources, the Legislature is beginning a multi-year reduction in the state’s operating and capital budgets.
    The current version of SB 21 as amended by the Senate Resources Committee sets the government take (the total tax collected by the state and federal government) in the legacy fields at 63-65 percent. Last year, the Senate received testimony from our consultants that a 70-75 percent government take in the legacy fields is reasonable, though maybe slightly high, compared to other petroleum producing regimes. Under ACES, the government take at current oil prices is around 70 percent. As the price of oil increases, the percentage of government take also increases as a result of the progressivity calculation built into the tax code. At higher oil prices, I agree the splitting of profit cash is too heavily weighted on the side of the state. This puts the state in a competitive disadvantage to many other oil basins.
    I applaud the governor and the Senate for finally focusing their efforts on fixing the structural flaws in ACES. I’m encouraged to see that SB 21 addresses the problem of the tax credits in ACES which are too generous and at certain oil prices can result in the state’s paying out more in credits than it receives in tax. That’s absurd. The bill also eliminates progressivity which I believe is a mistake. As I mentioned earlier, the current rate of progressivity is too high at higher oil prices and I believe it should be modified, but not eliminated. Without some level of progressivity, we will have a regressive tax regime which means the share of profits to the state decreases as the price of oil increases.  That’s unacceptable for any sovereign that has a fiduciary responsibility to the people who own the resource.
    A fair splitting of the resource wealth between the owners, you, and the oil industry along with tax stability and predictability is the primary goal and objective that must be achieved in any bill that passes. If these goals and objectives are not achieved the industry will not have a tax regime stable enough to predict and model with confidence. We will continue to, yet again, change the tax environment.
    It is foolish for the state to relinquish hundreds of millions of dollars per year from already profitable and economic legacy fields where the tax structure is not broken. To do that while simultaneously telling the people who own the oil to tighten their belts because the state is going to run unnecessarily high deficits will be a hard pill for the public to swallow. Rushing any significant oil tax reduction bill through the legislature without a thorough understanding of its impacts will result in a lack of public support for the ensuing budget cuts and an unstable tax regime for the oil industry to operate under.




Police Letter Response

Dear Editor: Who is this guy in Juneau who thinks we need more cops in Sitka? Anyone know him? What’s his angle?
Ron Rau, Sitka


Ducks Unlimited

Dear Editor: The Sitka Chapter of Ducks Unlimited held the annual DU banquet Feb. 23. The great support of local businesses, volunteers and over 100 Ducks Unlimited members resulted in another fun banquet in Sitka that will contribute to waterfowl conservation, throughout the United States, and even Canada and Mexico.
    Sitka’s annual DU banquet has evolved into a popular community event. Everyone who attended was treated to an action-packed evening, including a silent and live auction and a great meal.
    An event such as this is the result of hard work and the contributions of many individuals and businesses. The following contributed greatly to this year’s event: Absolute Tree Care, AC Value Center - Lakeside, Agave Restaurant, Allen Marine Inc., ALPS Federal Credit Union, Arctic Chiropractic, Baranof Island Brewery, Cindy Hartman-Moore, Daily Sitka Sentinel, Davis Realty, Dock Shack Café and Lounge, Ernie’s Old Time Saloon, First Bank, Foreign Automotive, Harris Aircraft, Harry Race Pharmacy and Photo, Jim Faro, KCAW-Raven Radio, KIFW Radio and Problem Corner, Murray Pacific, Northern Sales, Nugget Restaurant, Paula Salte, Precision Boatworks, Russell’s, Sea Mart Quality Foods, Seaside Barber Shop, Sitka Bottling Company, Sitka Flowers, Sitka Sportsman’s Association, The Backdoor, The Barber Shop, Traditional Ways, University of Alaska Southeast, Venneberg Insurance and Westmark Sitka.
    The outstanding meal was prepared by John Wathen’s crew and served by members of the Sitka High School baseball team. Our auctioneer was Jon Morse. The dedicated crew of hardworking volunteers who organized and staffed the event included: Pat Heuer (co-chair), Dave Miller (emcee), Lisa Killinger, Chris and Mariah Leeseburg, Hans and Gerry von Rekowski, Milt and Karen Fusselman, Logan Morrison, Vaughn Hazel, Carol Goularte, David (TJ) Tjomsland and Paula Salte. A special thank you to Orion Sporting Goods for selling banquet tickets and handling firearm transactions, and to Allen Marine for going above and beyond to support the DU banquet.
    DU is a non-profit organization dedicated to wetlands and waterfowl conservation and restoration. Funds generated through voluntary, tax-deductible contributions are used to enhance, acquire and restore habitat. Last year DU conserved nearly 100,000 acres across the United States alone. About 1,000 wildlife species, including several that are endangered, look to these areas for their habitat needs.
    The largest percentage of DU’s conservation expenditure is derived from nationwide fundraising banquets. These dinners are social affairs attended by avid sportsmen and sportswomen – conservationists who really care about the future of their environment. Eighty-one cents of every dollar raised goes directly to wetland conservation and education.
    I sincerely appreciate all the hard work and wonderful support to make the Sitka Chapter of Ducks Unlimited annual banquet a terrific success. Mark your calendars for next year’s DU banquet on Saturday, Feb. 22, 2014, at Harrigan Centennial Hall. We look forward to another fun filled and rewarding DU banquet for everyone to enjoy!
    Thanks to all. Your continued support goes a long way in helping to “Keep ’em Flyin’.”
Greg Killinger and Pat Heuer,
Committee co-chairs,
Sitka Chapter Ducks Unlimited

Oil Giveaway

Dear Editor: Gov. Parnell certainly impressed me when he spoke up against domestic violence and bullying. Likewise, I was very supportive when the First Lady came to town for the unveiling of the Choose Respect mural on the Blatchley Middle School wall and stayed to discuss food and nutrition issues with local activists.
    But our governor’s recent extreme attacks on our resources and his priority for giving corporations what they want instead of what Alaska citizens want, seems to be the opposite of his previous balance. The cruise ship industry sent six lobbyists and over $400,000 to overturn the people of Alaska’s citizens approved ballot initiative for better wastewater management and Parnell gave them what they wanted. The coal mining interests want key words concerning conservation removed from the DNR’s mandate removed and Parnell gave them what they wanted. Mining interests want to be able to take all the water out of streams and leave none for the salmon and Parnell is working on giving them what they want. The Pebble Mine wants the general public’s right of input into permitting decisions removed and Parnell gave them what they wanted. Oil companies want to take our resource at a big discount and Parnell and the lobbyists behind him are working on that.
    The list goes on and on. Corporations that extract Alaska resources and Alaska’s values need a hatchet man to open the door for them to plunder and pillage and enrich their corporate coffers – at the expense of Alaska citizens. Parnell is that hatchet man and Alaskans are the victims.
    The violence in the Congo and Nigeria and so many other places is based on corporate money buying petty politicians to bully their constituents into submission. Why are we any different? We need to stand up to this bullying now and stop being submissive. Contact Gov. Parnell at governor@alaska.gov and let him know for yourself how you do not appreciate the corporate takeover of our natural resources and our rights. It is only by speaking up that we can remind politicians that their interests should be reflecting the citizens and not the corporations.
Spencer Severson, F/V Dryas, Sitka