An article in the New York Times today discusses both the call by some in Alaska to dismantle two of Governor Palin’s energy related legislative victories and the claim by others that they are responsible for Governor Palin’s great fiscal record and Alaska’s strong fiscal health.
Current Alaska Governor Sean Parnell is seeking to make changes to Governor Palin’s oil tax structure–”Alaska’s Clear and Equitable Share” (ACES) legislation. This legislation replaced Governor Murkowski’s corruption-tainted oil tax plan. Governor Palin’s plan primarily taxed oil company’s net profits on production, and its flexibility based upon oil prices and its tax credits encouraged greater capital development and investment than Murkowski’s tax structure. ACES also provides oil companies with tax credits for investment in future production. Moreover, Governor Palin signed ACES into law in order to make the oil tax structure more in line with the state constitution which stated that natural resources (i.e. oil) belong to the people and need to be developed for the maximum benefit of Alaskans.
While Governor Parnell has stood with Governor Palin on AGIA (the natural gas pipeline), in rejecting federal earmarks, and in opposing Obamacare, he is among those who have called for reforming Governor Palin’s ACES legislation:
Gov. Sean Parnell, Ms. Palin’s fellow Republican and former lieutenant, has announced that it is his top priority to undo parts of major oil tax increases that Ms. Palin made law. He argues that high state taxes, not just federal regulations, are preventing oil companies from exploring new drilling in Alaska and therefore jeopardizing future state revenues.
“Lower taxes means more competitive,” Mr. Parnell said last week. “It means more jobs.”
The reality doesn’t match up to the Governor Parnell’s claims. The number of oil companies filing with the Alaska Department of Revenue has doubled indicating that competition has indeed increased. Alaska has the second most business friendly tax set-up — up two spots since the passage of ACES. Additionally, a report from Governor Parnell’s Department of Revenue indicated that 2009 yielded a record high in oil jobs. Even more recently, the newest employment numbers from Alaska show that oil job numbers were higher in January 2011 than in January 2010, indicating that jobs are growing at the seasonal level. Parnell argues that state revenues are in jeopardy, but it is estimated that his proposal would reduce revenues by $100-200 million. Governor Parnell is right on other issues, but the numbers tell a different story than he asserts when it comes to ACES.
Despite what the media and Governor Palin’s detractors say, her record has been effective and fiscally sound. It’s ironic that the New York Times’s attempt at journalism in highlighting misrepresentations of Governor Palin’s record comes shortly after they announced that they will be charging for access to their site due to shrinking readership. So, while they generate faux concern for Governor Palin’s fiscal legacy, they should probably be more concerned with their own.