To the editor: Gov. Mike Dunleavy has cast the debate over Alaska economics into an either/or choice: Either we have a functioning state government that supports the university, VPSOs, public schools, the ferry system, etc., or we have a PFD payment. It’s not that simple.
Since the Parnell administration sharply lowered oil taxes in 2013, through Senate Bill 21, the oil tax credit bill, the state of Alaska has run at a deficit. At the time the bill passed, the state of Alaska had $17 billion in savings and ran a surplus. Those good times are gone. Proponents of the measure claimed increased production would offset the lower tax rate. However, production has remained flat, while per-barrel revenues have dropped. The combination of stagnant production, falling oil prices and reduced taxation has contributed to, though not wholly caused, our financial troubles.
The fact is we can no longer rely on the oil industry to be Alaska’s cash cow. While oil companies have thoroughly lined their own pockets, ours are increasingly looking pretty empty. We supply $1.2 billion in tax credits to the oil industry but cannot fund public education. Any honest financial debate should include a consideration of those oil tax credits, as well as income taxation. Dunleavy has never put that on the table.
But the larger picture is that oil prices are falling worldwide; that we are past peak production; that oil consumption creates a host of health, safety and climate issues; and that no amount of political rhetoric can turn back that clock. Oil is an industry we should not bet on at the expense of the rest of our economy.
Thousands of Alaskans are employed by the university system, by tourism, by health and social services, and by commercial fishing. All of those economic engines will be damaged by Dunleavy’s reckless line-item vetoes. I, for one, would rather have a job than a PFD. But most of all, I’d like to see fair and firm taxation of the oil companies, long-term investment in a broad-based, healthy economy and a government that meets its obligations to all Alaskans.