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Industry-backed group fighting repeal of Alaska's new tax-cut legislation

Alex DeMarban
Consumer Energy Alliance is using its website to drum up opposition to "Vote Yes: Repeal the Giveaway," the Alaska-based referendum effort that is gathering signature across Alaska.
Stephen Nowers illustration

An industry-backed national group that has fought climate change legislation has joined an effort in support of retaining the governor's newly passed tax cut that will largely benefit oil producers BP, ConocoPhillips and ExxonMobil.

Consumer Energy Alliance is using its website to drum up opposition to Vote Yes: Repeal the Giveaway, the Alaska-based referendum effort that is trying to gather enough signatures to put the measure on the August 2014 ballot and eventually overturn the tax cut.

Critics argue that Gov. Sean Parnell's tax reduction will cost the state more than $1 billion annually with no hope of increased oil production. Supporters contend that lowering taxes on oil companies will spur development, helping the state in the long run.    

Visitors to the Consumer Energy Alliance site can sign a resolution putting them "on record supporting a competitive Alaska." The Make Alaska Competitive coalition is also hosting the resolution on its website.

The resolution says repealing Senate Bill 21 -- recently signed into law and christened the More Alaska Production Act -- would cause "massive" tax increases while reducing Alaska's revenue and global competitiveness, among other problems.

It says oil production is in "free fall" and "legislative hearings demonstrated" that Senate Bill 21 "will result in more oil production and more revenue for the state and the Permanent Fund."

In reality, it's possible the bill won't lead to new production. Even key legislative supporters called it a "crapshoot" and "gamble" that didn't guarantee development, though at least one defended his view by maintaining that the status quo would put the state at even bigger risk.

The status quo, of course, is legislation forced through the Legislature in 2007 by former Gov. Sarah Palin with strong Democratic support. The law offers a sizable credit to spur reinvestment in Alaska and increases taxes on oil producers as the price of North Slope crude rises.

Senate Bill 21 is set to go into effect Jan. 1. The referendum won't be voted on until next year. If Senate Bill 21 is repealed, Palin's legislation will be reinstated as the law of the land.

Steve Pratt, Alaska contact for Consumer Energy Alliance, could not be reached late Thursday to explain why the group got involved in the Alaska effort. The governor was recently in Houston, Texas, attending a panel organized by the group.

As for the ongoing signature-gathering effort, an official with Repeal the Giveaway said the group is on track to collect more than 30,000 valid signatures before the July 13 deadline.

Some 1,000 mostly-unpaid signature-gatherers are helping across the state, said campaign coordinator Pat Lavin. He estimates the group has collected about 10,000 signatures so far.  

"The response has been strong," he said, adding that "it remains a heavy lift," because of the short-time frame to gather signatures and a requirement that the group must collect signatures from at least 30 of the 40 legislative districts in the last election.  

The group has raised $24,147 through May 15 from 47 donations, most under $500, according to a 30-day disclosure report filed with Alaska Public Offices Commission.

Former lawmaker and state constitutional delegate Vic Fischer, a primary sponsor of the tax-cut repeal, is by far the biggest donor, slapping down $5,000. A handful of others have thrown in $1,000, including former state representative Chancy Croft, author Jack Roderick, and oil and gas attorney Craig Richards.  

A state-based group is also fighting the repeal effort, and has spent about $30,000, mostly on radio ads, an official said. "We Are Alaska," is funded entirely by the Alaska Support Industry Alliance, said Rebecca Logan, chair of the campaign and general manager of the alliance.

"We Are Alaska" doesn't have to register or file disclosure reports, said Logan, referring to a recently issued advisory opinion from the lawyer of the Alaska Public Offices Commission.  

But the group will voluntarily file quarterly reports starting sometime in July, she said.  

"This is precedent setting, so that's why we asked for an advisory opinion," she said, noting that a state law passed in 2010 largely addressed voter initiatives but said little about referendums.

The advisory opinion said groups opposing a referendum during the signature-gathering stage aren't required to register with APOC, Logan said.  

The opinion has yet to be approved by the commission's board, which is slated to consider it at a public meeting on June 6.  

Asked why groups on different sides of the same effort would be given different reporting requirements, the head of APOC said the opinion was based on the law.

"That's the way the law reads. We have to go by what it says. We're not making judgments," said Paul Dauphinais.

Contact Alex DeMarban at alex(at)alaskadispatch.com