August 2, 2013 / 9:55 PM / in 5 years

Alaska oil tax referendum headed for tight vote in 2014

ANCHORAGE, Aug 2 (Reuters) - Activists hoping to overturn a sweeping tax break for Alaska oil producers have their work cut out for them, even after getting confirmation that they secured enough voter backing to put a referendum on the ballot next year.

The referendum seeks to void a law that rolls back state oil taxes.

Polls show there is no clear majority either in favor of or against the tax cut signed into law in May, as both sides gather funds for a political battle that goes to the heart of both the state’s key industry and its identity.

State officials confirmed on Friday that 37,644 qualified signatures from registered voters were gathered in support of the referendum, well over the threshold of 30,169 needed to qualify for the 2014 primary-election ballot.

A formal announcement on ballot qualification is not due until later this month, said Gail Fenuniai, director of the Division of Elections. More than 51,000 petition signatures, gathered in about 10 weeks, were submitted.

The new law capped oil taxes at 35 percent, though most producers will pay even less through a series of credits. It replaces a regime that boosts rates as oil prices rise, to a limit of 75 percent, which the governor and other industry supporters say discouraged Alaska oil production.

Referendum supporters say the tax cut is a no-strings-attached giveaway that will cost the state $4.5 billion over the next five years.

A wide-ranging survey taken in late July by North Carolina-based Public Policy Polling found 46 percent of respondents opposed the oil-tax cut, while only 30 percent supported it.

A poll taken last month by Anchorage-based Ivan Moore Research found 49 percent favoring the referendum, with 42 percent opposed. Anchorage pollster Marc Hellenthal did another a poll at about the same time measuring voter opinions on candidates who back the referendum and found a near-even split.

That may change next spring, when a big state budget deficit is expected, Hellenthal said. The argument then may be, “If you hadn’t given the money back to the oil companies, we wouldn’t have this problem,” he said.

The Alaska oil-tax debate has raged for years, but mostly at the legislative level, said Gerald McBeath, a political science professor at the University of Alaska Fairbanks. What is new is putting the question directly to voters via the ballot, he said, and the debate remains clouded in uncertainty.

“Nobody really knows if this decrease in oil taxes will actually increase production, and if so, how much,” he said.

Even before the petition signatures were turned in on July 13, industry supporters were spending money to fight the referendum.

A political group called “We Are Alaska,” representing oil-field-service companies, reported that it spent $45,717 on advertisements in June urging people not to sign the petitions. The spending was reported in a quarterly campaign-disclosure report submitted to the Alaska Public Offices Commission.

Established to campaign for pro-industry political candidates, “We Are Alaska” collected $139,348 in the first six months of 2013, according to its disclosure report.

The group backing the referendum - “Vote Yes - Repeal the Giveaway” - raised $63,974 in contributions in the first six months. It spent $28,240 on efforts to get the referendum on the ballot, according to its disclosure report.

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