Alaska business perspective on Governor Palin, including her oil tax increase...
Palin: Strengths, weaknesses hit national scene
alaskajournal.com
Palin also went after the petroleum industry for new taxes. Murkowski had increased state taxes on oil producers, but Palin came in with a proposal to tweak and increase the tax law. Palin's own tax proposal was relatively modest but state legislators* added changes that boosted its effects substantially. Now Alaska boasts some of the highest taxes on oil production in the world.
Bashing Big Oil is good politics in Alaska as elsewhere, and so far there has been no apparent downside to Palin's initiatives. Over time there may be. It may be that her pipeline initiative with TransCanada will complicate, rather than facilitate, the industry's efforts to build a gas pipeline. If that happens, and the big construction project is delayed, one of Palin's big accomplishments will be hollow.
Likewise her oil tax increase. While it was the Legislature that ramped up the tax, Palin didn't oppose it. The tax is now so high that some industry development projects on the North Slope are being delayed and cancelled. With oil production from the Slope declining at rates of more than 6 percent a year, the state badly needs investment in new oil projects to keep production up.
If the decline rate steepens and oil prices drop, the state's rosy financial situation could turn bleak, which could be a problem with a bloated state budget. If Palin's run for national office is unsuccessful, she may return to Juneau to face big drops in revenue and higher expectations for services from constituents.
*Her allies on this were Democrats and "maverick" Republicans |
