Alaskans are the beneficiaries of the state’s investment. Our constitution requires the State of Alaska to manage our resources to the maximum benefit of the people. Government’s fiduciary duty to its citizens is to make prudent investments and establish a sustainable budget. The State of Alaska must make responsible and wise business decisions, as we are an owner state. The current oil and gas tax credit system, with its many layered and net operating loss credits, does not do that.
Alaska receives essentially no income from the development of our jointly held oil and gas resource in Cook Inlet, and very little from many of our other leased land. This means in some cases we are actually paying these outside corporations to take our oil. We may potentially use Permanent Fund revenue and/or impose tax measures on the people of Alaska to make these payments to the oil industry. If the current oil credit and tax system remains unchanged in the 2017 fiscal year the net impact of severance taxes collected compared to payout in credits to oil corporations, will result in a net loss of at least 725 million dollars. The cost of these unsustainable oil industry subsidies is about 1,000 dollars out of each Alaskan’s pocket. This is not fair to the Alaskan people, who rightfully own that resource.
As a fiscally conservative legislator who has a duty to put the best interests of Alaskans before outside companies, I cannot support the current system with my vote.
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