ANCHORAGE — Many Alaskans chart state history along a timeline of before oil and after, so crucial were those first big strikes in the late 1960s in making the state what it is today. Now a proposal to shake up the way oil companies are taxed — headed for a vote Tuesday in a statewide referendum — has stirred a passionate public debate.þþAt stake is the fate of major tax breaks and incentives for the oil industry, part of a system that was pushed through the Republican-controlled Legislature last year by Gov. Sean Parnell, who billed it as a way to stimulate new drilling in the aging oil fields of the North Slope, where production has been in decline for decades. þþCritics of the measure say it excessively benefits oil interests, and are seeking to reinstate a previous tax package known as ACES, or Alaska’s Clear and Equitable Share, signed into law in 2007 as a hallmark achievement of Gov. Sarah Palin.þþThe standoff has special urgency here because oil tax revenue makes up the largest share of the state’s general fund, eliminating the need for a state income tax or sales tax. As tensions have risen, both sides have issued dire warnings that the wrong vote on Tuesday could spell disaster.þþ“It’s a failed policy that gets you no money — good luck with that,” Les Gara, a Democratic state representative from Anchorage who favors repealing Governor Parnell’s system, said at a debate on Friday before a business group in Wasilla, Ms. Palin’s hometown. Under the Alaska Constitution, mineral resources are owned collectively by state residents, and under the new law, he said, they could be sold in some circumstances to oil companies for almost no revenue in return.þþ“By a show of hands,” Mr. Gara asked the lunchtime audience, “how many run a business and say you’ll sell your stuff for near zero or a negative value? How many?”þþMr. Parnell, in an interview, agreed that the stakes could not be higher. “Will our children and grandchildren inherit a state full of jobs and opportunity? Or are we going to go back to the unsustainable path of decline that we were on? That’s what this is really about,” he said.þþMs. Palin, the 2008 Republican vice-presidential candidate, had been mostly quiet about the ballot measure, but she came out late last week with a blazing attack in favor of repealing the Parnell plan. In an online column and a video at her new subscription-based website, she railed against the “outside influence” that she said had infiltrated state politics.þþ“For years outside Big Oil tried to tell us, ‘Hush now, little Alaskans, just trust us to do right by you,’ ” Ms. Palin wrote on her Facebook page, which has 4.3 million “likes,” about six times the population of Alaska. “We won’t be suckered again by multimillion-dollar P.R. campaigns and crony capitalists wanting us to fall for scaremongering.”þþMs. Palin’s broadside accentuated and compounded what had already been a collection of strange bedfellows, aligning her with some of the most liberal Democrats in the Legislature and a smaller group of Republicans who support Ballot Measure 1, an effort to reverse the legislation championed by Mr. Parnell, who was Ms. Palin’s lieutenant governor and succeeded her when she resigned in 2009.þþContinue reading the main story Continue reading the main story þþþþSupporters of the Parnell plan, led by the oil companies — who have outspent the supporters of the old Palin plan by about 10 to 1 — said the ACES law had been aimed at punishing the industry after a bribery scandal. They also said that it made for bad economics, with a progressive tax structure that increased and decreased revenue collection based on the price of oil and the producer’s level of investment. They credit the new system for a turnaround, with declines in oil production flattening out since the law took effect on Jan. 1.þþ“I don’t want to back to the good old days; they weren’t that good,” said State Senator Cathy Giessel, a Republican and leader of the “Vote No on 1” movement. She said that a “philosophy of hatred” toward oil companies would backfire among Alaskans who understand that the industry had changed the state for the better.þþMr. Parnell said he had not responded directly to Ms. Palin’s comments and planned to argue “facts rather than slogans,” in defending his system. But he said the history was clear that the ACES system — which he once supported and helped push into law — had been a failure.þþ“We just cannot ignore the guaranteed decline that Alaska experienced under ACES,” he said. “I believe Alaskans deserve a more secure future.”þþSupporters of the Palin plan (though few call it that, because Ms. Palin remains as polarizing a figure here in her home state as she is in the lower 48) said its regulations had teeth and pointed to the oil industry’s distaste for it as proof. Three of the biggest oil companies in business here — BP, ConocoPhillips and ExxonMobil — have together contributed more than $7.8 million this year to the “Vote No on 1” campaign.þþ“What’s at stake is whether Alaska is going back down the old path of being exploited by absentee owners, which is the history of Alaska since the Russians first came,” said Victor Fischer, a leader of the drive to restore ACES. Mr. Fischer is a 90-year-old former urban planner and World War II veteran who helped draft the State Constitution, which took effect when Alaska gained statehood in 1959. He said that he was not sure what Ms. Palin’s re-emergence could mean, but that even if it swung only a few votes among her Tea Party followers, it could be significant in a tight election.þþVoters in Tuesday’s primary will also be selecting a Republican nominee to face United States Senator Mark Begich in November for the hotly contested Senate seat that could swing control of the chamber. All three contenders have expressed opposition to a return to the Palin law, while Mr. Begich has said he will stay out of the fight and let the voters decide. There have been no reliable and independent opinion polls on the tax issue, but both sides acknowledge that the results will probably be close and that turnout could be much higher than the 25 percent to 30 percent that is typical for an August primary.þþThe odd new wrinkles of the tax debate were evident on Thursday night in a heavily Democratic neighborhood in downtown Anchorage, where “Vote Yes” signs supporting repeal dotted many lawns, and where the idea of Ms. Palin as an ally was met with head-scratching by people like Brian Risinger, 35, a burly, bearded longshoreman.þþ“I don’t listen to anything she has to say,” said Mr. Risinger, who planned to vote in favor of reinstating the Palin-era system. “No one really cares what she does.”þþEconomists agree that the stakes in Tuesday’s vote are high, but that both sides are probably overselling their product.þþ“This is the big issue of our day,” said Gunnar Knapp, an economist and the director of the Institute of Social and Economic Research at the University of Alaska. “But it’s not like either choice can bring you nirvana.” þ
Source: NY Times
