Dems in Alaska Legislature Eye Oil Tax Increases…at What Cost?

August 31, 2021

As the Alaska Legislature slogs on in its quest to finalize a state budget for 2021-22 – currently halfway through its third 30-day special session, following its standard 121-day foray – the battle lines between camps in both the State House and Senate appear only to be hardening.

Following the second special session, an eight-member bipartisan and bicameral working group spent nearly a month, working to find a solution to the sticking points around the amounts of the Permanent Fund Dividend and a long-term fiscal plan.  That effort produced hope from both the working group and many who testified during public hearings, that middle ground could be reached.

But when lawmakers returned to Juneau, gridlock once again became the functional effort, and most of the past two weeks of the special session have been spent without either body meeting formally.  Without gaveling into session, neither the House nor Senate can move legislation forward.  Without that movement, there can’t be official progress made.

This weekend, Democratic members of the House (Garan Tarr of Anchorage) and Senate (Tom Begich of Anchorage, and former US Senator Mark Begich’s even more liberal brother) grew frustrated with the inactivity, announcing that once their respective bodies gavel in, they’d be introducing revenue measures to help pay for government.  Their solution?  Hammer the oil industry with decreased production credits (Begich) and increased royalty payments (Tarr).

At a time where only a quarter of state government revenues come from oil and gas activities (with nearly two-thirds coming from a draw against portions of Alaska’s nearly-$82 billion Permanent Fund), any efforts to squeeze extra money from the industry that employs – directly and indirectly – nearly one-quarter of our private-sector workers seems counter-productive.

But that’s what eco-left politicians are known for.  Attack the industry, attack its workers, and hope that better energy solutions and better jobs come down the road.

It would be short-sighted, disastrous, and bad news for Alaska if Tarr’s and Begich’s plans gain any traction in their respective bodies.  Power The Future will be keeping an eye on this situation, and will continue to fight for Alaska’s energy community.