Ballot Measure 1 changes existing oil tax structure
FAIRBANKS, Alaska (KTVF) - Ballot Measure 1, known as the Fair Share Act, will appear on Alaskan ballots in the general election on November 3rd.
According to the ballot’s language, its purpose is to change “the oil and gas production tax for certain fields, units, and nonunitized reservoirs on the North Slope.”
According to the measure, it will apply to those oil fields which are north of 68° latitude, produced more than 40,000 barrels a day over the previous calendar year, and more than 400 million barrels cumulatively.
This applies to three oil fields in the North Slope region of Alaska. The tax being collected under this act is always between 10 and 15%, depending on the price of oil.
The act further stipulates that all filings related to payment of the tax will be public record.
Robin Brena, co-sponsor and chair of Vote Yes for Alaska’s Fair Share, says the measure “represents needed amendments to a failed existing production tax system, Senate Bill 21, in which our fair share was taken from us about 6 years ago.”
Brena explained, “Five years before Senate Bill 21, we brought in about $19 billion in net production taxes, and five years after we brought in zero. As a result of Senate Bill 21 there’s been a complete collapse of our production revenues in Alaska.”
He said, “It’s going to devastate the Alaskan economy if Ballot Measure 1 does not pass. We’re going to lose our PFDs. The University of Alaska Fairbanks is going to be tanked even more than it is now.”
According to Brena, Senate Bill 21 involved the oil industry writing its own taxes. “The biggest dollar item is massive credits. We just started giving them our share to bring us oil that would’ve been produced anyway, and that had been produced for three decades with no credits at all.”
Brena went on to ask, “Do you really believe that you’ll be better off by taking less for your oil than anybody else in the world gets, a third of what we used to get, a third of what our sister states get, and a fraction of what other major-resource countries get throughout the world?”
Joan Johnson, a Fairbanks volunteer with One Alaska, an organization opposing the measure explained that the Ballot Measure 1 involves a complicated tax structure. “It has lots of weights and measures, and a lot of details in it that are not clear as to how it will actually be applied or impact the companies that invest in Alaska,” she said.
Johnson added, “It’s not real straightforward, but it could increase their taxes for their investment in the state of Alaska with the oil and gas industry anywhere from 150 to 300%, which could make it very detrimental to encouraging companies to even do business in oil and gas.”
“I hear this term ‘Fair for Alaskans.’ Well, Alaskans right now, we don’t receive or have a personal income tax, we don’t have a sales tax, and we also receive a Permanent Fund Dividend from revenues that come from the oil and gas industry. So as I search every other state in the United States, I don’t know of another state that has all of those benefits,” she said.
She added, “Those benefits come due to the oil and gas industry investing in Alaska and being here.”
According to Johnson, oil producers paid $600 million in production tax to the state of Alaska in 2019, with the state receiving $3 billion over a six-year average. “If those dollars were gone, where would the state get their money?”
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