A remarkable event occurred on Wednesday, Oct. 25. The CEO's of three major Alaska companies, fierce competitors in the telecommunications industry, set aside their competitive differences to come together and speak out against Ballot Measure 2, the gas reserves tax. They joined a prestigious group of members of the Alaska State Chamber of Commerce, including some of Alaska's most prominent business leaders to unite against Ballot Measure 2. It is a group concerned about the state's future. They came as leaders, not representing their companies, but as Alaskans deeply understanding the repercussions of passing this initiative.
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Ballot Measure 2 is detrimental to the future of this state. The impact of its passage would have a chilling effect on investment. The Alaska State Chamber has long supported the construction of a pipeline project to transport North Slope natural gas resources to market.
The intent of Ballot Measure 2 purports to be an "incentive" to advance a pipeline project by taxing a development into existence. But any good business leader knows that taxes do not provide an incentive. The conditions and mechanisms outlined in Ballot Measure 2 are highly punitive, unduly burdensome, and in some cases, ambiguous. The conditions imposed by the initiative are counterproductive to the economics and, thereby delays - and potentially derails - the advancement of any pipeline project.
The proposed tax presents both constitutional and legal challenges that will almost certainly be mired in litigation, further delaying the development of Alaska's natural gas. During the expected litigation, the revenues (estimated at $1 billion a year) will not be deposited into the general fund, and will instead be deposited into an escrow account.
Ballot Measure No. 2 would set a dangerous precedent for other resource industries in Alaska.
Petroleum experts and other experts say this ballot measure will have a profound, negative effect on Alaska's economy; make a gas pipeline project uneconomic; discourage new exploration for oil and gas; and send the message that Alaska is closed for business.
We are a state open for business. Let us keep it that way. We are a state rich in resources and proud of our developments, and we need to focus on our prospects for growth. Implementing new taxes will not entice or force the gasline project to go forward. It will have a chilling and lasting effect on future investment in the Alaska.
The Alaska State Chamber of Commerce urges voters to join with these and many other businesses from across the State to send a resounding message by voting NO on Ballot Measure 2.
Keep in mind - what's next? Tax all our fishermen on the uncaught fish in the sea?
Please vote Nov. 7 for the future of this state.
Wayne A. Stevens is the president and chief executive officer for the Alaska State Chamber of Commerce.