ANCHORAGE — Major oil companies are spending heavily to retain tax cuts approved last year by the Alaska Legislature, campaign spending reports indicated.
The tax cuts could be repealed by Ballot Measure One, placed on the August primary ballot by referendum. BP and ExxonMobil each have donated more than $1.3 million in the “Vote No on One” campaign, the Anchorage Daily News reported Sunday.
The Vote No group raised $3.5 million as of Wednesday, according to reports filed with the Alaska Public Offices Commission. The group has begun radio and television advertisements urging Alaska voters to reject the measure.
An opposing group, “Vote Yes —Repeal the Giveaway,” raised just more than $104,000 through the end of the year, according to its last report. Most of the money was spent to gather signatures.
Former state Senate President Chancy Croft, who backs the referendum, said he had previously told a reporter he expected the Vote Yes group to be outspent 10-to-1.
“So I was wrong,” he said Friday. “They are going to outspend us 50-to-1.”
The oil industry is spending millions to reject the referendum, but “it’s peanuts compared to the amount of tax that’s at stake here,” Croft said.
Proponents of the tax cuts say oil companies will invest elsewhere without tax relief. Referendum backers say the state will lose hundreds of millions in revenue with no guarantee that oil companies will invest in new drilling or production.
The new law cuts oil taxes when prices are high but brings in more when prices are low. The Parnell administration contends that Alaska will receive more revenue under the new tax regime during the budget year that starts July 1.
However, aides of Gov. Sean Parnell have projected a $2 billion drop in revenue this fiscal year because of lower oil prices and declining production.
BP has been the top contributor to the Vote No campaign, giving $1.31 million.
“The Alaska oil tax reform was an important step forward,” BP spokeswoman Dawn Patience said by email. “BP is adding 200 jobs and two new drilling rigs, one rig by 2015 and a second in 2016, for a total incremental $1 billion investment over five years.”
The Vote No campaign director Willis Lyford said the group has spent around $2 million.
“The expenses are high, absolutely,” Lyford said. “We’re running a statewide campaign. We’re running statewide media. We’re speaking to groups and organizations statewide. This is a comprehensive effort because we think there’s a lot of information we need to get out.”
ConocoPhillips has contributed just more than $350,000, according to Alaska Public Offices Commission reports.