Supporters of Gov. Sean Parnell’s oil tax bill resent tying the consequences of losing billions in tax revenue to adequately funding our schools. They say it is a false choice. They might be right if there were any evidence that the tax breaks to big oil would result in more oil in the pipeline. Instead, here in Alaska, we have a 10-year track record where extremely low tax rates (12 percent to below 1 percent) coincided with the Kuparuk field on the North Slope actually declining by 7 percent. Sen. Bill Wielechowski goes further, stating, “We’ve had a 20-year experiment in Alaska with low taxes. During that timeframe, it did not create new production. It did not create new investment.” Furthermore, those representing big oil before the Legislature shy completely away from making commitments to produce more oil if the governor’s bill becomes law. Having neither evidence, nor commitment to link huge tax breaks with actual production increases by the major producers, Alaskans are left with making a real choice, not a false one. Do we want to further enhance the profitability of companies currently netting about $6 million every day in profits from Alaska, or do we want to maintain a fair and equitable tax rate that would allow us to make modest adjustments to the base school allowance?
On one hand we have a governor who proposes to give billions to big oil without any assurance of increased production in return, yet in the same breath he defends no increase to the base school allowance stating, “we need results first”.
In defending his double standard, Governor Parnell cites the unacceptable 70 percent high school graduation rate seen across the state. While this is indeed unacceptable, why doesn’t the governor take the next step and ask school districts what they are doing to increase graduation rates? If he did he would get a full report. Most importantly, why not ask school districts if they are willing to be held accountable in exchange for funding? If he asked, the answer would be a resounding ‘yes’.
Taking the Juneau School District as one example, graduation rates are up. They’re now 71.4 percent for 4-year and 79 percent for 5-year graduation. The district has new, higher standards for what students should be able to do at each grade level and has implemented Measures of Academic Progress (MAP) to measure how students are performing and progressing toward these higher standards. Furthermore, they have increased graduation requirements from 21.5 to 23 credits. These are just a few of the measurable steps that the Juneau School District has taken. Other school districts are stepping up as well. If the governor wants accountability and measurable standards as justification for increasing the base allowance for the first time in three years, it’s there.
Efforts to increase graduation rates only succeed with strong and stable funding, not starting and stopping based on funding that varies from year to year. Nor is it helpful when the only adjustment upward in school funding is based on rising energy costs to heat the schools and to drive school buses. The Juneau School District has already reduced 92 positions in the past three years. They, like school districts across the state cannot absorb more cuts without foregoing higher graduation rates. Yet, this will certainly be the case now and for the foreseeable future if the governor’s oil tax bill passes as is. For example, the administration’s own fiscal analysis projects a total loss of $5.4 billion to the state’s treasury over the next six years. With this drastic reduction in revenue, what are the prospects that education will be adequately funded?
Alaska’s oil is our oil and we should be fair in our tax structure. Legislators on both sides of the aisle acknowledge that we need to adjust the tax rate on the high end when the price of oil soars. Alaska’s schools are our schools, and deserve to be funded at levels that not only keep up with inflation but also sustain core programs aimed at increasing the high school graduation rate above 70 percent. This is a goal shared by legislators on both sides.
It is our oil, but on the issue of oil taxes, our governor acts more like a former employee of Conoco Phillips and contractor of Exxon. The question is, will the Legislature follow suit? For the sake of our schools, I hope not. For the sake of our schools, I hope all the parents and teachers who lobby school districts for fewer cuts, will understand the connection and begin lobbying the Legislature for level-headed action on oil taxes. Nothing short of Alaska’s future lies in the balance.
• Troll is a long-time Alaskan with more than 22 years of experience in fisheries, coastal policy and energy policy. She resides in Douglas.