My grandparents and their children moved to Alaska in 1964. Since then, my family has called Alaska home, and owned 12 Alaska-based businesses. My grandparents were drawn to Alaska for the increased opportunity oil finds would bring their young family. The rest of us have stayed because Alaska, with a strong oil industry, remains a land of opportunity.
Alaska’s state budget, which relies heavily on oil revenues for funding, has been a point of contention for the last few years. The sudden economic impacts of the COVID-19 virus and a squabble over oil production between Saudi Arabia and Russia have caused the price of oil to plunge to less than $1 per barrel, placing Alaska’s state budget in grave peril. It is going to be a rough time in Alaska until these situations resolve, and it is anyone’s guess when that will happen.
Our state’s economy depends on oil and gas production. Unfortunately, Alaska now faces pressure and uncertainty from within our own state; we must decide if we will act as a long-term partner with oil producers and reap the benefit of future decades of growth and development, or stifle future development in our state by voting for the latest oil tax ballot measure.
Ballot Measure One would raise taxes on our Alaskan oil producers by 150 percent at these low prices, and by 300 percent at the higher prices we saw earlier this year. Despite this massive increase, proponents claim the measure will not hurt oil investment in Alaska. Such an assertion defies logic and flies in the face of basic economic theory. This would be true at normal oil prices, but is especially true when prices are low.
To provide context for what such a tax increase would mean for a family or business, we need look no further than Ballot Measure One chair, drafter, and funder Robin Brena. Robin Brena is an owner in a company that owns about $20 million in Anchorage real estate. In 2019, Brena’s company paid the Municipality of Anchorage more than $300,000 in property taxes.
Of course, as an LLC, he paid no state corporate income tax. If the city increased taxes on his company by 300 percent, he would be required to pay the city almost $1 million in additional taxes each year. Without a doubt, such an increase would change how he spends his money, how he does business, and how and where he invests. This shift would have a negative impact on the people he employees and their families, as well as the businesses that lease space in his buildings.
Fortunately for Robin Brena, he can probably weather a major economic downturn in Alaska’s economy. Many Alaskans, however, cannot. We need the oil industry to thrive in order for our economy to thrive.
There are many promising opportunities for Alaska on the horizon. Through significant prior investments, oil companies have made big discoveries, like the Pikka and Willow oil fields, which can provide decades of opportunity for Alaskans. Soon we may have ANWR lease sales, which will be another potential boost to our state.
We cannot jeopardize generations of opportunity for Alaska families and small businesses by enacting an overreaching tax that will drive investment dollars to more competitive areas in the world. Please join me in protecting Alaska families and small businesses by voting no on Ballot Measure One.
Jodi Taylor is the co-chair of OneAlaska.