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A business perspective on Alaska oil tax reform

Jim Jansen

Alaska is not competitive with alternate petroleum investments, and our production is falling in spite of record high oil prices and record investments in most other oil regions.

Opponents to tax reform say we should continue to tax oil to the maximum because Alaska is going out of business anyway. This "tax to the maximum now" and let the future be damned, is a one-way ticket to the poor house.

Our kids deserve an explanation of how this "going out of business plan" will support Alaska's long-term economy.

Opponents to fair and competitive oil taxes say we must have guarantees that the producers will produce more oil.

We have few guarantees in business. We earn our future security by providing good service to our customers at competitive rates. Do you guarantee that you will shop at your favorite grocery store? Of course not. These stores earn your business every day. Their future is dependent upon maintaining you as a customer and earning new customers. This requires being competitive.

Do you have any idea how quickly companies like ours (Lynden) would go out of business if we were not competitive? We would be gone very soon.

The oil industry can invest anywhere in the world, and they do. For example, Lynden is operating aircraft in Papua New Guinea and trucks in Canada, Texas and North Dakota because of a lack of petroleum opportunities here at home.

Alaska earned its petroleum investment over the past 50 years. We worked with the oil industry as partners; we provided competitive tax rates and a reasonable regulatory environment. That changed with ACES in 2007 when we legislated a huge tax increase making Alaska a poor investment region.

The governor's proposed tax bill is not perfect and I believe the legislature has improved it within the Governor’s guiding principles. The important thing is that it gets done this year, and that it achieves a balanced, fair and competitive tax structure for Alaska, one that motivates investment again.

Alaska's economic future can remain strong, and our long-term petroleum investment can be earned.

We can all prosper – the oil industry, Alaskans, and your local grocery store – if we provide good service at competitive rates.

If you plan to leave Alaska within the next 3 to 5 years then today's tax policy is perfect for you. "Suck on that oil lollipop until it's gone." If you care about our kids, and Alaska's future, then tax reform is the answer.

Let's be better than our federal government. Let's not tax and spend away our kids’ future. Let's be competitive and remain prosperous for the long-term.

Jim Jansen is the chairman of shipping and logistics company Lynden Inc., co-chairman of the Make Alaska Competitive Coalition, and has been an Alaska business leader for 43 years.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch, which welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com.