To the editor: The efforts of generations of Alaskans from across the political spectrum are under attack by Gov. Mike Dunleavy’s line-item vetoes of the Legislature’s budget. If the vetoes stand, they will undo the efforts that created our strong middle-class economy and our high quality of life. These vetoes must be overridden, and the Legislature’s reasonable budget must be funded by immediately repealing the current oil tax structure (which grants tax credits to the oil companies when the price of oil is low) and replacing it with a flat 20% tax on oil and gas production.
This year the oil tax credits amount to $1.2 billion and are projected to be at least $1 billion each of the next five years as oil prices are projected to stay low. The large international oil companies’ Alaska operations are among their most profitable operating units. These companies do not need a government handout in the form of our oil tax credits. The $1.2 billion saved by eliminating the oil tax credits will fund the Legislature’s budget. There will be no need for the draconian line-item cuts promoted by the governor.
Overriding the governor’s vetoes and replacing the oil tax credits with a 20% flat tax is a fair taxation level and stops the current giveaway to the oil companies. It solves our current budget problem without resorting to the unnecessarily large and destructive budget cuts proposed by the governor.