Homer Alaska - Letters

Story last updated at 9:24 PM on Wednesday, March 9, 2011

Giveaway not worth the gamble

Having read numerous articles in the Anchorage Daily News, I have reached the conclusion that Gov. Sean Parnell's proposed tax cuts that may result in a loss of $2 billion or more in state oil production revenues with nothing guaranteed in return are, at best, a gamble and, at worst, a royal giveaway to the oil and gas industry. Oil prices are increasing right now with the unstable situation in the Middle East, but notably, as oil prices rise, oil company profits also are soaring. Exxon Mobil just had a 53 percent increase in its fourth-quarter profits of last year, $9.25 billion. Overall, Exxon's revenues for 2010 were $383 billion. Chevron had a 72 percent fourth-quarter profit last year, while ConocoPhilips had a 46 percent increase. These figures were in a New York Times article published on Jan. 31, 2011.

So with these huge profits in mind, and the fact that oil companies had record profits the last time the oil prices soared, I don't see the need to give away $2 billion annually for nothing in return. If anything, we should keep collecting these taxes and put the money into a fund that will eventually help run the state when revenues do decline. Running a state on revenues from a non-renewable resource means that we should carefully plan for the inevitable time when these resources will no longer be plentiful. With careful planning and savings, we could have a state budget run on profits from a permanent fund dedicated to this purpose.

So to keep this short, I do not support Gov. Parnell's plan to cut production taxes for oil companies. Alaska's oil tax structure is not as high as some others in the world. Let's not make a big giveaway to the oil companies with really no information to know how much it is truly going to cost and without knowing if we even get anything in return. Isn't that really what a giveaway is a one-way exchange?

Let Rep. Paul Seaton, Sen. Gary Stevens and Gov. Sean Parnell know what you think about the governor's plan.

Nina Faust