Alaska editorial: Special session sends the wrong message

Posted: Tuesday, August 14, 2007

Gov. Sarah Palin has, unfortunately, chosen to call the Legislature into special session later this year to make some changes to the new - new - petroleum profits tax.

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The tax has been in place for less than a year, and already the governor is wanting to change it.

There are a couple of significant problems here.

First, what sort of message is the governor sending to the oil industry, which says it needs fiscal stability from a host government to make wise business decisions?

A bad one.

Imagine if your bank representative called you up to say that the terms of your small business loan were going to be revisited. You've been thinking that the loan has been working out well for you, but the bankers don't think it's working out all that well for them, so they want to make some changes. Yet you've already made some investment plans for the coming years based on revenue projections that are closely tied to how much you'll be paying in loan financing. Maybe you don't make those investments.

A second, and just as important, problem is the likelihood that the Legislature won't have the time to do an adequate job in dissecting the issues that the governor wants them to consider. Special sessions can run just 30 days. And with the governor calling for the session to begin Oct. 18, a 30-day session would take legislators right up to Thanksgiving and the onset of the holiday period. It's extremely unlikely that legislators would want to follow that with a second session, one that could take them right up to Christmas, so for all practical purposes the governor is asking that changes to the oil tax be handled in one 30-day stretch.

That might be acceptable if key legislative committees could begin meeting now to review what the governor wants done, but that seems unlikely. The administration's own report about its research into the oil tax won't be available until Sept. 4, giving 40 House members and 20 Senate members just six weeks to prepare so that they are not entering the special session at square one. That should be a particular concern for the Legislature's 13 freshmen, who constitute just over 20 percent of the Legislature - a substantial block that wasn't in office when the oil tax was thoroughly debated.

All told, legislators will have maybe 10 weeks to prepare themselves, debate the points, propose amendments to whatever proposal is made, analyze those amendments, hear from the oil companies, hear from Alaskans, hear from the governor's people, hear from consultants, and debate and vote on a final revised oil tax bill.

That's not good.

And the chosen time period itself could be a problem, although the governor says it is what legislators have recommended. Do they not know that it coincides with the annual Alaska Federation of Natives convention? The convention runs Oct. 22-27 in Fairbanks, which will be hosting more than 3,000 Alaska Natives - including Alaska Native legislators and corporation leaders - from around the state. The convention runs for fully one-fourth of the time of the special session. Where's the logic of overlapping these two events and possibly excluding some important people from the oil tax discussion?

None of this inspires public trust in the system. And yet public trust is the very thing that the administration cites as the reason for needing a special session. Revenue Commissioner Pat Galvin, speaking at Gov. Palin's news conference on Aug. 3, said there has been a "breakdown" in public trust regarding the oil taxes. The commissioner mentioned the bribery scandal involving oil field services giant VECO Corp. as a supporting reason for a special session, but there is virtually no way for the Legislature to prove that the outcome of the oil tax votes of 2006 would have been any different. Rather, those who honestly voted "yes" because they believed in it will feel enormous political pressure to demonstrate "independence" by voting to alter the oil tax and go against what they may truly believe is right. That should be considered unacceptable.

Alaska without question isn't served well by such a compressed review of the oil tax.

The Legislature is required to heed the governor's call to convene in special session, but wise heads in the House and Senate should recognize that the governor has put them on a rushed schedule. They should also remember that rushed schedules lead to bad decisions, and they should act accordingly to spare Alaska a trauma it doesn't need and cannot afford.



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