Alaskans uphold tax system for oil companies



SEATTLE — A hard-fought ballot referendum that would have overturned Alaska’s system of taxing oil industry profits, put to voters last week but until now considered too close to call, has failed by a narrow margin, with absentee ballots counted this week nailing down the outcome.

The referendum, Ballot Measure 1, drew millions of dollars in contributions from oil companies and raised political passions across the state. Former Gov. Sarah Palin, a Republican who has rarely commented on Alaskan political issues since resigning in 2009, even waded in with a ferocious and, to some voters, surprising attack on the oil tax policies of her successor, Gov. Sean Parnell.

Parnell pushed his tax overhaul through the state’s Republican-controlled legislature last year, replacing a system called Alaska’s Clear and Equitable Share that had been Palin’s hallmark achievement — signed in 2007, before she became the Republican vice-presidential nominee.

Parnell’s opponents, led by Democrats, said his plan was too generous to the oil companies in tax breaks and incentives, and they gathered enough signatures to put the question of repeal to voters.

Supporters of the tax system, in a campaign largely financed by the oil companies, fought back. In a barrage of television ads, supporters said that Parnell’s plan was showing results in encouraging new investment and oil production, crucial to Alaska’s economy in adding jobs and tax revenue, and that going back to Palin’s system risked disaster.

With the new results posted late Tuesday night, the repeal measure failed by 8,443 votes out of about 172,000 cast.

A leader of the repeal drive, state Sen. Bill Wielechowski, said the narrow defeat and the pledges the oil companies had made, especially that production would increase, were important in creating pressure to make the new system as good as promised.

“We’ve got them on the record now, and we have an army of Alaskans who are going to be ready to hold them accountable,” said Wielechowski, D-Anchorage. “If they live up to their promises, that’s a victory for Alaska.”

For Parnell, who is running for a second full term in November, the ballot measure was also in some ways a personal referendum. But with the vote so close, his two leading opponents — a Democrat and an independent who were both in favor of repeal — may try to keep the tax debate alive, people in both parties said.

First Published August 26, 2014 8:00 PM

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