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Interior Alaska candidates focus on oil taxes at forum

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Posted: Tuesday, October 23, 2012 11:32 pm | Updated: 11:39 am, Mon Jan 21, 2013.

FAIRBANKS — The Carlson Center was packed Tuesday afternoon for the Greater Fairbanks Chamber of Commerce’s candidate forum for the Fairbanks area’s state Senate candidates.

With two weeks until the election, the six candidates largely focused on oil taxes and related issues.

Candidates included incumbent Sens. John Coghill, R-North Pole, and Joe Thomas, D-Fairbanks, who, thanks to redistricting, are facing off for Senate District A, which includes North Pole and the northeastern area of the borough.

Incumbent Sen. Joe Paskvan, D-Fairbanks, and former Republican Sen. Pete Kelly are competing for Senate District B, which covers the city of Fairbanks.

Republican Click Bishop, who won a hotly contested three-way primary race, and Democrat Anne Sudkamp are vying for Senate District C.

After oil tax legislation stalled out in the last legislative session, all eyes are on how the candidates intend to approach the state’s production tax system.

Thomas defended the current tax regime, dubbed Alaska’s Clear and Equitable Share, and said any problems could be addressed by adjusting it. He said any change should be handled as a business transaction.

“I think it does work, and we have to adjust it,” he said. “You do have to have a business arrangement with the industry. What is it going to take to change the tax system, and not just hope for the best. They should come to the table and tell us what they’ll do differently.”

Coghill said bluntly that he regretted his vote on ACES.

“I voted for ACES, and I was wrong,” he said. “The slope was too high, and it took too much off the top and it makes it more difficult for businesses to invest.”

He said the state should take a strong role in ensuring production is met, but said he felt using a tax system to bargain for investment was a flawed approach.

Kelly criticized Paskvan, and the bipartisan Senate coalition of which Paskvan is a member, for their work on the governor’s oil tax plan. He said ACES puts Alaska far behind other states, among them North Dakota.

“They made their state competitive and we’re suffering the consequences as throughput goes down and down and down,” he said.

Paskvan said that analysis was flawed and didn’t account for the larger picture.

“When you include the reduction for credits for investment, our ranking is in the middle of the pack, when you look at the complete fiscal structure of Alaska and include the royalty, it has a dramatic reduction in the government share,” he said.

He said the booms elsewhere aren’t a result of the tax structure but of the development of shale oil and hydraulic fracturing, a technology that is just starting to get a foothold in Alaska.

“With respect to boom in North Dakota and Texas, it’s all the result of technology not the result of taxation,” he said.

Bishop, who said during the primary race that he’d put Alaska before his party, set a similar tone during Tuesday’s forum.

“An increasing tax rate is not an incentive for companies to produce,” he said. “But I’m not pro-big oil or anti-big oil, I’m Alaskan. In return for those incentives to increase production, I want to make sure contractors and Alaskans get their piece of the pie and include us at the table.”

Sudkamp, who stressed that all the services Alaska provides to its residents is dependent on strong revenue, said she wouldn’t change taxes.

“I’m favor in holding the line with ACES, and not reducing it,” she said.

The candidates also addressed a number of other questions relating to energy relief and job creation. A full video of the forum will be posted on the chamber’s website at http://fairbankschamber.org/.

Kelly and Paskvan addressed a recent slew of combative advertisements launched by both campaigns.

Paskvan, in an ad, described Kelly as a “lobbyist” because he worked as the University of Alaska’s legislative liaison. Kelly fired back with his own ad challenging Paskvan’s use of the word.

“Frankly, it’s a campaign, it’s not a checkers match,” Kelly said. “The senator can say what he wants, and we’ll let the voters decide.”

Paskvan said the issue ended up being bigger than he intended.

“It was a tempest in a teapot, and I think voters need to address the substantive big issue of oil taxes. I suspect Pete and I are long past the negative advertising,” he said.

Contact staff writer Matt Buxton at 459-7544 or follow him on Twitter: @FDNMpolitics.

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