Citizen group hands in petitions for voter referendum on oil tax change
A citizen group dissatisfied with the Legislature’s action to reduce oil taxes earlier this year handed petitions with 50,000 signatures to state election officials Saturday calling for a voter referendum to repeal the law.
The signatures are more than enough needed to put a referendum on the August, 2014 state primary election ballot, supporters said.
The "Vote Yes - Repeal the Giveaway" group needed 30,169 signatures from registered voters, or 10 percent of the total turnout in the last statewide election, to get the question on the 2014 ballot.
Critics of Senate Bill 21, a bill passed by the Legislature April 14 and signed recently by Gov. Sean Parnell, say the law reduces taxes on industry without adequate guarantees that new investments will be made.
"This bill that they passed is against the interests of Alaska," said Vic Fischer, a former state senator and one of the prime sponsors of the signature-gathering drive, told a group of about 50 tax-cut opponents gathered outside state election offices.
In petition drives organizers always push to have more than the minimum number of signatures because some are inevitably rejected after they are checked by elections officials. Signers must be registered to vote in Alaska. Signatures must be checked within 60 days under state law. With 50,000 signatures handed in, Fischer said he is confident there will be enough valid signers to quality for the ballot.
Prior to passage of Senate Bill 21 Alaska had one of the highest tax rates on oil and gas in the world. Under the former law the “total government take” of taxes and state royalty on Alaska production averaged about 74 percent of net profits, consultants to the Legislature said.
As a result, industry investment in new Alaska production has lagged in recent years while investment has boomed in other U.S. producing regions.
The tax change made in the bill that passed lowers the effective rate to between 60 percent and 65 percent, the consultants told legislators.
There would be short-term negative effects on state revenues of about $300 million a year, but if the tax change stimulates investment the negative effects could be easily offset by new production, state revenue officials have said.
The state revenue department has estimated that $5 billion in new North Slope investment would stimulate enough production to pay for the tax and create over $1 billion a year in new revenues by 2019.
One of the consultants, Barry Pulliam, with Los Angeles-based Econ One, said that “it would be a tragedy” if Alaskans voted to repeal the tax change.
“It would be a long time before Alaska could dig its way out of that,” Pulliam told an oil and gas conference in Anchorage last week.