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Alaska Oil Tax Cuts Veto Referendum (August 2014)

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Oil Tax Cuts Referendum
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Type:Veto referendum
State code:Senate Bill 21
Referred by:Citizens
Topic:Taxes on the ballot
Status:On the ballot
The Alaska Oil Tax Cuts Veto Referendum is on the August 19, 2014 primary ballot in Alaska as a veto referendum. The referendum seeks to repeal Senate Bill 21, also known as the Oil and Gas Production Tax, which was passed by the Alaska State Legislature and grants tax breaks to oil companies. To land the referendum on the ballot, supporters had to collect at least 30,169 valid signatures by July 13, 2013. They ultimately collected more than 45,000 signatures by the deadline, with supporters claiming the total was actually in excess of 51,000.[1][2][3][4]

The full text of SB 21 can be found here.

Background

Under the current tax code, oil companies pay a base rate of 25 percent on the first $30 of net profits from a barrel of oil, plus a 0.4 percentage point increase in tax rate for each subsequent $1 in profit per barrel. Under S.B. 21, oil companies will pay a base rate of 35 percent, but the additional add-on tax matching the market price of oil will be removed. Given the new provisions detailed in SB 21, it is estimated that the tax on oil will be approximately 14 percent.[2]

Text of measure

In Alaska, veto referendums are currently worded in such a way that a "yes" vote repeals the law in question, while a "no" vote upholds it.

Support

Supporters of the referendum have created a campaign called "Vote Yes! Repeal the Giveaway!". The referendum's proponents include former Fairbanks mayor, Jim Whitaker; former governor and state representative Jay Hammond's widow, Bella; and former senator, Vic Fischer.[5] Supporters claim the bill only benefits oil companies, not Alaskan citizens. They are confident oil companies will come to Alaska with or without the added incentive of a tax break.[1] After the measure was officially certified in early September 2013, Whitaker said,"I think all Alaskans should be pleased that we have a chance to make a decision individually about something that is going to affect the future of our state for a long time. And this is our shot. This is our chance to do what we think is right."[6]

Opposition

Gov. Sean Parnell (R) sponsored and strongly supports Senate Bill 21, and therefore is against the effort to repeal it. The governor claims the tax break will entice oil companies to come to Alaska and boost production. Alaska relies heavily on revenue from oil to balance its budget.[1]

Path to the ballot

See also: Laws governing the initiative process in Alaska

On March 20, 2013, the Senate passed SB 21 with a vote of 11-9.[7] On April 13, 2013, the House passed the bill 24-15.[7]The bill was signed into law by Gov. Parnell on May 21, 2013 and will take effect on January 1, 2014. In order to get the referendum on the August 2014 ballot as planned, supporters must gather 30,169 signatures. The campaign must obtain these signatures from at least 10 percent of the number of voters who participated in the prior general election, and signatures must be gathered in 30 of the 40 House districts, with at least 7 percent of eligible voters in each district signing. The deadline for signatures was July 13, 2013.[1][8][2]

Supporters collected over 45,000 signatures - well above the number required - and exceeded their goal by more than 50 percent. Pat Lavin, one of the referendum effort's organizers, stated, "It's exceeded my expectations." Though support for the referendum has been strong, a 2005 measure that sought to ban aerial wolf hunting will likely maintain the record for the most number of signatures collected. That measure, which was ultimately successful at the polls, garnered more than 55,000 signatures. On September 3, 2013, Division of Elections Director Gail Fenumiai officially certified the referendum, noting that supporters had met all signature requirements.[6]

Alaska Oil and Gas Production Tax, SB 21 Senate Vote
ResultVotesPercentage
Approveda Yes 11 55%
No945%


Alaska Oil and Gas Production Tax, SB 21 House Vote
ResultVotesPercentage
Approveda Yes 24 60%
No1537.5%

Use of veto referenda in Alaska

If this issue makes the ballot, it will be the fourth time Alaskans used their right of veto referendum. They used it first in 1968, with the Voter Registration Referendum, again in 1976, with the Compensation and Retirement Referendum, and most recently in 2000, with the Alaska Land-And-Shoot Referendum.

See also

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