There are multiple sides to every issue, and Juneau’s Democratic representative, Sam Kito III, made sure to touch on both sides of two of the hottest topics in Juneau these days.
The first of those being: When Alaskans go to the polls this August, should they repeal SB21? The state’s new oil tax system has been labeled a “giveaway” by Democrats while officially called the “More Alaska Production Act” by its supporters.
The second issue, whether the state should build a road out of the capital city, doesn’t carry the same debate-sparking potential statewide. But in Juneau, “The Road” can be as divisive as any other piece of public policy.
Speaking to the Juneau Chamber of Commerce crowd, Kito was noncommittal on both issues while highlighting aspects of each that concern him.
During his opening remarks, Kito started to discuss the SB21 issue, but quickly reverted back to prepared notes before offering his opinion. During a question and answer session following his speech, Kito was asked if he — like “the majority of Alaskan businesses” — is opposed to the repeal of SB21.
“I’m still in the decision-making process here; I wasn’t around when SB21 passed,” Kito said.
In a Q&A published in the Juneau Empire when he was appointed earlier this year, the Juneau Democrat took a stronger stance.
“I don’t know all the details. I do know I have concerns we’re giving money away in a time we’re seeing declining budgets ... at this point, I don’t believe (SB21) was the best way to move forward,” Kito said in that report. We went on to say, “... at this point, I am personally in favor of repealing SB21.”
He told the chamber that oil prices are at a “sweet spot” where both SB21 and the previous oil tax system are producing the same returns for the state, but that world events could indicate oil prices are on the rise — a fact that, if true, would result in less money for the state under SB21.
“If (oil prices are) going to be increasing, I’m concerned that, perhaps, we may have left money on the table that, with our declining revenue situation, could be very important for state services,” Kito said.
Republicans and other supporters of the new oil tax structure have pointed to billions of dollars of new investment on the North Slope as supporting evidence for their cause. Opponents say that is a facade by oil companies and not indicative of better days ahead.
The road is “estimated at over $500 million to complete,” Kito said. “Do we receive $500 million in commerce or revenue back to the state or the city? That’s a tough one to support.”
He said that while the road would eliminate a costly ferry route that runs north from the Auke Bay ferry terminal, the project’s savings are mitigated by its proposed shuttle ferry near Haines.
“You still have 12 hours worth of fuel ... and then you’re going to have an additional 65 miles of road to maintain,” Kito said. “I haven’t seen the numbers that show that to actually balance out to the state’s favor, so I’m concerned we actually end up increasing the operating budget.”
He told the audience that, for him, this issue is about the timing of the project rather than it’s non-fiscal merits.
“I’m not sure this is the right time to spend a significant amount of money on a project that the state doesn’t seem to get any revenue from,” he said.