In 2007 the Alaskan Legislature passed Alaska’s Clear and Equitable Share, known as ACES. Today, as decision makers and stewards of publicly owned resources continue a spirited debate on the merits and drawbacks of ACES, it is clear that we need factual information to make properly informed decisions.
On matters of great fiscal impact such as oil taxes, we lean heavily on the professionals at Department of Revenue to provide us with complete and accurate information about policy changes and how they impact the State of Alaska treasury. These folks regularly present information to committees and to individual legislators, sharing practical problems of past legislation and anticipating future potholes with potential public policy.
Our fiduciary responsibility to the citizens of Alaska demands an accurate public ledger of all income and expenditures. In this pursuit we have repeatedly sought two kinds of information from the Governor and his folks at the Department of Revenue:
- A completed audit of one year of tax receipts under ACES.
- A complete audit and disclosure of capital expenditure tax credits under ACES, with project specifics, to gauge the relevance of credits.
Since oil began flowing down the pipeline and Alaska began collecting revenue from its common property resource, the state has audited the tax returns, ensuring that Alaska collects revenue in accordance with its tax law. Past audits have revealed major discrepancies. Recent co-Chairmen of the Senate Finance Committee, Senators Stedman and Hoffman, provided expanded resources to the Department of Revenue to promote timely audits of tax receipts. Almost seven years have passed since the passage of ACES, yet we still have yet to see even a single year’s completed audit.
Generous capital expenditures are component of ACES intended to help explorers and developers get over the hump to become producers and to encourage existing producers to develop new oil. Critics complain the credits are too lenient – last month the Governor pointed to a runway and his Deputy Commissioner of Natural Resources mentioned a dining hall on the Alpine oil field -examples of credits gone awry. Instead of cherry picking examples that might bolster their arguments, we have asked for a complete and full report on all the credits. Tell us what we bought with the billion per year state investment in North Slope development. While we may differ on how best to position the state for the future, the data on which we base our conclusions should be the same. Open the books and let the Legislature make policy decisions based on facts, not anecdotes.
With the absence of either of these pieces of information (audits and credits) the legislature is walking blind on oil tax changes. The Governor’s own consultants admit his proposed giveaway will be in the billions and includes generous reductions even on production already “in the pipeline” as it were . That’s money for building and maintaining roads and schools and for providing the services on which all Alaskans depend. We should not make decisions to reduce services to children and for public safety without first having clear picture of state revenue – past, present, and future – painted with facts, not bankrupt political conviction.
Senator Berta Gardner
Anchorage, Senate District H