Fuzzy math = uncertain future for rural Alaskans
As a math teacher, I know there are many ways to solve a problem, but in the end only one answer is correct.
In Juneau, there is a lot of focus on House Bill 110, which was sponsored by Governor Parnell and provides $2 billion a year in tax cuts to large oil companies. Conoco Phillips spokeswoman Natalie Lowman said the company “has committed to spending $5 billion in the next 3 to 5 years jointly with our co-venturers.”
For me, the math doesn’t work. How does a $10 billion dollar tax break to oil companies equal only a $5 billion return? I’m not a Wall Street investor, but I know I wouldn’t take that deal. It doesn’t make sense to me for the state to give larger tax breaks to companies making money on a resource that belongs to Alaskans.
The oil companies say they need these incentives to do more to bring oil to the market. To me, it’s pretty simple. Oil companies are already making record profits. I support businesses making money, but they now look to Alaska to see how much more they can squeeze from the state in exchange for “perhaps” increased production. There is no requirement that the tax breaks requested will be received only when production actually increases. An oil company saying they will invest a certain amount of money does not necessarily mean more oil production. It only means they have to show investment dollars on paper.
In over 30 years living in the Y-K Delta, I’m very familiar with what happens when the state of Alaska faces budgetary problems. Historically, this has meant a cut in funding to rural communities. In the late 1990s and early 2000s, when the budget was tight, rural Alaskans were impacted through reduced construction and delayed maintenance of public schools. I am concerned when tax breaks are proposed for the largest provider of income to the state. There are no guarantees that the result will be more income to the state in order to provide for Alaskan families and children. What benefit will come to Alaskans to give giant oil companies tax breaks? Will production increase? What will happen if it doesn’t? Will oil companies be required to hire more Alaskan workers? What will happen if they don’t? So far, I haven’t heard answers to these very important questions.
Tax breaks for oil companies may be what is needed to incentivize oil companies to produce more oil. However, we need to solve this problem in a way which ultimately benefits Alaskans. In addition, oil companies need to make commitments to ensure that Alaskans get a fair return on our investment. We need jobs for Alaskans. Where is the requirement that oil companies invest in Alaskans? Will oil companies continue to hire from the Lower 48 instead of putting Alaskans to work?
A recent poll of five hundred voters concluded that over 50 percent of the population believes the current tax amount is low or about right. This should be a wake-up call to those who support the governor’s proposal. Alaskans don’t believe lessening the amount of taxes required by oil companies in our state is necessary.
Barb Angaiak is President of NEA-Alaska, the largest union in Alaska. NEA-Alaska represents over 13,000 teachers and education support professionals from Ketchikan to Kaktovik. She has over 20 years experience teaching in rural Alaska, including at schools in Bethel and Nightmute. She can be reached at email@example.com