By Jason Grenn
When I served in Alaska’s legislature, I relied on data to inform decisions. Alaskans know the numbers have been tough in our state for years.
The thing to remember about numbers is even when we don’t want to make hard choices, they persist in guiding us.
If we strip away the anxiety of the moment and focus instead on what the numbers show, Alaskans should vote to reject Ballot Measure One. Not only do the numbers demonstrate why voting no is in Alaskans’ best financial interest, but they prove how the ballot measure’s supporters are distorting the facts.
Let’s examine a few examples, and clarify something. I no longer serve in the legislature, but work full-time in the non-profit sector. No one is paying me to advocate one way or the other.
It is absolutely false to say that Alaska has received no oil production tax revenue during the last few years. These numbers are public and published by the state’s department of revenue.
North Slope oil companies have paid state taxes every year since oil was first produced decades ago. For the time period in question, Alaska received over $8.7 billion in taxes, and $13.8 billion in total revenue from oil companies since 2014. Those payments account for approximately 90% of Alaska’s tax revenue from business during the time period.
If Alaskans want to change oil tax policy, they should demand transparency from the proponents, and hold legislators’ feet to the fire. Certainly, oil taxes will be discussed again in Juneau in 2021 by an entirely new legislature. This is the proper place to make massive changes to complicated tax policy.
Ballot Measure One’s supporters also falsely claim the current oil tax structure, Senate Bill 21, has failed. Again, this is proved untrue using real, publicly available numbers.
Our current oil tax structure has resulted in more oil production and more revenue for the state than was projected under the old tax structure, even with the massive drop in oil price. In 2013, the state’s department of revenue projected that 2019 North Slope oil production would clock in at 425,000 barrels per day, even with oil prices over $100 per barrel.
Instead, we saw production levels reach nearly 500,000 barrels per day in 2019. Doing some quick math, the state is more than $1.5 billion dollars to the good in total revenue as a result.
Perhaps the most concerning and misleading argument being made by Ballot Measure One supporters is the notion that voting yes is some kind of silver bullet that will solve the state’s fiscal crisis. At today’s low oil prices, it won’t come anywhere close to filling the gap, and will make state finances even worse when production decline accelerates from lack of drilling.
The COVID-19 pandemic and painfully low oil prices caused North Slope producers to shut down almost all drilling on the North Slope, and significantly cut back on planned investments.
That alone should put a chill down the spines of Alaskans, but the question becomes: when does drilling and investment come back? Does it? Oil price and the ballot initiative will both drive those decisions. Even if oil prices recover, passage of Ballot Measure One will slow down Alaska’s North Slope recovery, and with it, the recovery of Alaska’s economy.
A brave, unflinching examination of the facts proves Ballot Measure One is a bad idea that should be rejected by voters. Now is not the time, and the ballot box is not the place.
• Jason Grenn is a former Independent Alaska legislator who serves as co-chair for OneAlaska.