Jim Jansen

GUEST COMMENTARY: Now is a terrible time to increase oil production taxes

With the pandemic threatening our lives and our livelihood, oil prices at rock bottom, the loss of the visitor industry for the season and commercial seafood at risk, this is a terrible time to raise oil production taxes by as much as 300 percent. Ballot Measure 1 is a vicious and dangerous attack on the future of our state. It sends the message that “If you invest here, we will increase your taxes every time we run out of money.” People say this is an oil company issue. It’s not. It’s an Alaska issue. Oil companies can take their money and invest it anywhere in the world — and they will. But where do the rest of us go? This is where we have our homes, families, jobs and businesses. This is where we plan a future for our kids and grandkids. Where do we go when the pipeline shuts down, the jobs dry up, home values collapse and there is no one left to support our tax base, our charities and our economic way of life? Other industries, like mining, tourism, seafood, and the many service businesses, will ask the question: who’s next? Why would they want to invest here? Why would anyone invest in a state that is trying to kill itself? Proponents of Ballot Measure 1 imply that the oil industry pays little or no taxes. That’s wrong. In the past five years, according to information provided in a prior article by oil economist Roger Marks, the oil industry paid an average of almost $3 billion per year in taxes and royalties and kept about $1 billion. That’s a government take of 74 percent of the pretax value. The Lower 48 government take was about 64 percent. Increased oil production is the best solution to Alaska’s budget problems. The oil industry has plans to spend $24 billion over the next 10 years, which could boost our oil production by several hundred thousand barrels per day. This investment would stop — and oil production would decline to dangerous levels — if we overtax this important industry. Why risk driving away what a 2019 study by the McDowell group noted is a $5 billion annual payroll, 77,000 jobs, $4 billion in annual payments to Alaska businesses? This money runs throughout our economy and supports so many charities and events that provide needed services to so many in our state. We are extremely concerned that if Ballot Measure 1 were to pass, it would begin an economic death spiral for Alaska. Our economy is fragile, and this initiative could tip us over the edge. They call this the “Fair Share Act”: • Is it FAIR that you will no longer have a job? • Is it FAIR that your house will be worth less? • Is it FAIR that your children will have little to no opportunity to stay and work in Alaska if this initiative passes? • Is it fair that there is no industry left to pay for government services, our schools and support our charities? A better name would be “The Job Killer Act of 2020.” We have a choice: • More oil or more taxes • A strong economy or recession • Jobs or no jobs This is not the time to destroy what we have left in Alaska. Jim Jansen and Joe Schierhorn are members of the OneAlaska campaign opposing Ballot Measure 1 and the KEEP Alaska Competitive Coalition. Jansen is the chairman of the Lynden Companies. Schierhorn is the president and CEO of Northrim Bank.

GUEST COMMENTARY: Passing the baton for a competitive Alaska

I’ve learned that getting old is much like a mature oilfield. There comes a time to pass the reins in order to remain competitive and productive, a time for the younger and more energetic to take the lead. That’s how we keep our businesses — and our oilfields — competitive and productive. Here at Lynden, young, smart, hardworking people continue to replace us old warhorses. The same happened in Cook Inlet, and now it’s spreading across the North Slope. These transitions are natural, appropriate and good for Alaskans. The time has come for BP to sell its aging Alaska assets, just like Chevron, Shell and Marathon did in Cook Inlet. Prudhoe Bay is in decline and as it enters its twilight years, it needs a different kind of operator, one that can bring innovation to old problems, one that can reduce costs and operate more efficiently. It also needs a tax and regulatory environment that is stable and competitive. We all know that BP has worked hard to slow the severe decline at Prudhoe Bay. For two years after Senate Bill 21 passed, production actually increased. But BP was struggling to bring investment dollars to Alaska with Prudhoe Bay competing against projects in more than 78 countries across the globe. I have worked with BP in Alaska for nearly 50 years and admire their accomplishments, their generous support of our charities, their employment of so many outstanding Alaskans and Alaska contractors and their positive economic impact on our state. That said, BP understands that mature, high-cost oilfields require nimble operators. We should be thankful that they turned to a company like Hilcorp. Hilcorp is a proven entity that not only turned Cook Inlet around, it is working miracles at North Star and Milne Point. It knows how to make older, declining fields productive again, and it has not hesitated to make the investment needed to breathe new life into these aging assets. As Alaska grapples with recession and budget constraints, it is critical that we do everything possible to keep our resource industries competitive, that we attract new investment and grow our oil production. That’s the best way to provide good jobs, to pay for our government services, including schools and roads, and to support our charities and our Permanent Fund. That’s why it is important that we support companies like Hilcorp, which is willing to invest the billions of dollars it takes to acquire old fields and make them productive again. That’s their job. Our role is to ensure our state is competitive in the global marketplace and stop threatening the industry with increased taxes and unstable tax policies. Increased production is essential to maintaining a healthy economy. Transition from retiring Alaskans to the next generation of employees and from the large oil companies to smaller, more aggressive and nimble companies is not only a natural progression, it is healthy for Alaska. Jim Jansen is the Chairman of the Lynden Companies and a Co-Chair of the KEEP Alaska Competitive Coalition.

GUEST COMMENTARY: Loving salmon, and against ‘Stand for Salmon’ initiative

I love salmon, but I care deeply about Alaska too. That’s why I oppose the salmon initiative. I doubt that there is anyone in Alaska that wants to protect salmon more than me. Transporting salmon, by aircraft, barges and trucks is a major part of our business, and sport fishing is my favorite pastime. Fishing has been and will continue to be a mainstay of Alaska’s economy and way of life for most Alaskans. The proponents of the so-called “Stand for Salmon” ballot measure want you to believe their proposal is just about protecting salmon, and that it won’t hinder development. If that were truly the case, I would support the measure, but unfortunately, once again, outside groups are trying to stop development, kill jobs and destroy Alaska. The “Stand for Salmon” initiative would make it extremely expensive and difficult for any type of development or community project. Whether it’s building a mine, repairing or building roads, developing an oilfield on the North Slope, or building a home, this initiative would be a major permitting impediment. We need to protect our unique and cherished ecosystems, especially in areas like Bristol Bay which rely so heavily on commercial and sport fishing industries. Many Alaskans were led to believe this would stop the Pebble Mine, but the initiative goes way beyond stopping one project in Alaska. Instead, it negatively impacts all resource development. This is a broad effort to attack Alaska statewide, and that’s why I decided to join the effort to defeat the initiative before it destroyed our state. The fish habitat ballot measure would cripple many industries by adding layers of unnecessary rules and regulations that would serve only to slow down or stop development and community projects, large and small. Building roads or runways in rural Alaska is already an expensive undertaking. Piling burdensome regulations onto those projects makes them harder to fund, if they are funded at all. Fortunately, once Alaskans find out the true meaning and purpose of this ballot measure, they are speaking out against it. Our Attorney General Jahna Lindemuth said the measure “would have the effect of categorically blocking certain mines, dams, roads and pipelines.” The Laborers and Teamsters unions oppose the measure because it would cause statewide job loss. Aaron Schutt, the president of Doyon, Ltd., one of the Alaska Native corporations, said “there will not be another significant project built in rural Alaska if this initiative passes.” Once again, Alaska needs to rally against an ill-conceived ballot measure that will be a huge roadblock to our state’s economy. Stand for Alaska is the name of an impressive coalition of businesses, native organizations, and individual Alaskans who love salmon but care about Alaska too. Lynden is a proud member of this group and we will help push back on the false narrative that Alaskans must choose between development and habitat protection. We can have both and have for many years. For more information about our coalition and the ballot measure, visit standforak.com. If the Alaska Supreme Court allows this ballot measure on the General Election ballot this November, I’m firmly voting no, and I encourage my fellow Alaskans to do the same. Jim Jansen is the chairman of Lynden and a supporter of Stand for Alaska.

GUEST COMMENTARY: It’s time to accept the governor’s compromise

It’s time to accept the governor’s compromise. We must end the standoff in Juneau because the option of doing nothing is devastating to Alaska, and delivers a crippling blow to our fragile economy. Another year of stalemate would deplete our reserves and would fail to reverse our slide into recession. The Walker administration outlined the potential impacts of a shutdown of state government on Thursday, June 8. The specter they painted is grim: Closed commercial and sports fisheries, ferries parked, no driver’s licenses, death certificates or marriage licenses and the list goes on. After calling the Legislature into special session, the governor proposed a compromise to break the legislative deadlock. The compromise is a masterful blend of all of the ideas and positions currently on the table from the governor, the Senate, and the House. It is less than perfect and has plenty to make everyone “equally unhappy.” That said, it is a bold and significant step in creating a long-term sustainable budget that, while at a substantially reduced size, provides essential services, invests in education, and encourages business investments and jobs. A complete plan would have included a budget that does not reduce any savings account. This compromise likely falls short of that by about $300 million but that is a far cry from the $3.5 billion dollar deficit a year ago. An 85 percent accomplishment of a historical change in our state financial framework is a victory in good governance and a legacy for future Alaskans. The components of the compromise begin with a reduced budget. When the oil revenues tumbled in 2013 the budget was almost $8 billion. The new budget under this compromise would be close to $5.5 billion, almost a one-third reduction in state spending. Second, using some of the earnings of the Permanent Fund and the Constitutional Budget Reserve would produce approximately $2 billion to reduce the deficit and still pay a $1,000 dividend to every Alaskan and inflation-proof the principle. A fuel tax increase of 8 cents per gallon this year and then 8 cents the following year, making Alaska still one of the lowest fuel taxes in the nation, would produce $80 million per year new revenue intended for highway maintenance. Next a broad based progressive education head tax on both residents and non-residents would produce approximately $100 million in new revenues, which would be intended in this and future years to be spent only on education. The elimination of cashable oil tax credits reduces expenditures by another $1.2 billion over the next 10 years. The net effect would reduce the fiscal year 2018 deficit from more than $2.5 billion to approximately $300 million. It would provide the continuation of vital public services. It would help maintain our bond rating, which is at serious risk. And it would maintain the Constitutional Budget Reserve at a prudent level. In short, it would solve 85 percent of our budget crisis and set the stage for the next Legislature to fine tune our fiscal framework and produce a truly balanced budget. In the spirited debate over the last two legislative sessions on the purposes of a fiscal plan there have been passionate advocates for many principles: ensuring that the sacrifices include all stakeholders from individual residents to oil companies, substantially reducing the level of state spending, establishing a fundamental fairness in who pays for additional revenues, in cutting the budget we do not put the burden on most vulnerable or on the educational investment in the next generations, and that we must protect our savings as they are the sources of a sustainable budget. The governor has included all of these values in his compromise. The amount and the balance may fall short and not satisfy each advocacy. But please let their idea of perfection of our new fiscal reality be the continuing agenda for future legislative deliberations and actions. It must not be the basis for a continued gridlock, calling it quits, and falling off the fiscal cliff. No other state in the nation has the opportunity to permanently fund almost 40 percent of its budget with earnings from its savings. By taking this giant step forward toward fiscal stability Alaska can turn the corner, attract investment, rebuild its economic foundation and pass on a legacy of opportunity and prosperity. It’s time to complete the people’s business in Juneau, to be responsible and to put the long-term interest of Alaska first. ^ Jim Jansen is Chairman of the Lynden Companies; Marc Langland is the retired Chairman and CEO of Northrim Bank; Tony Knowles is a former Governor of Alaska.

COMMENTARY: Stable tax policies, balanced fiscal plan required for a stronger Alaska

Alaska is at a tipping point and Alaskans have a choice to make: Either keep Alaska competitive and fix our fiscal crisis or continue down a path that ends in a failed economy. We are co-chairs of the KEEP Alaska Competitive Coalition, a broad-based group of Native corporations, unions, businesses and individual Alaskans who understand that fair and consistent tax policies for our resource industries are essential for Alaska’s economic future. We are 5,000 members strong. We are not the oil industry and we take no funding from the oil companies. We are also longtime Alaskans who remember an Alaska before oil. We understand that Alaska is better with oil than without. The oil industry has paid for up to 90 percent of state general fund spending the past 40 years. Even in these days of low oil prices and low production rates, oil provides 67 percent of the state’s unrestricted revenues and supports one-third of our economy. Our heavy dependence on oil has given us a great ride, but it’s not sustainable. It’s not economic reality. You can’t take in revenues of about $1.5 billion, spend approximately $4.5 billion per year and continue to do nothing about it. And, if most of our revenue, and most of our jobs, come from the resource industries, you can’t tax away their incentive to invest and still expect to have a sustainable economy. The solution to our fiscal crisis is not that hard. We can develop a durable and sustainable fiscal plan by following these methods: • Continue to cut the cost of state government; • Reduce the PFD; • Use a sustainable percentage of value of our Permanent Fund earnings to fund state services; • If necessary, increase revenue through some combination of taxes, and do it now to maintain stable and competitive taxes for our resource industries. Alaska has much to be thankful for and on which to build an economic future. Alaska’s abundant natural resources are the envy of the world. At today’s production rate, we have more than 40 years of proven oil reserves remaining on the North Slope, and we have much more to discover and develop with the necessary infrastructure on the Slope, the Trans-Alaska Pipeline System and the Valdez Marine Terminal and a road to the oil fields. The mineral reserves in Alaska are among the biggest in the world. We have the largest wild salmon and pollock stocks on Earth. Alaska is not only rich in opportunity; it has one of the best labor forces in the country. And most Alaskans want to remain here. The United States is the most politically secure, economically strong and safest nation in the world. Why not market these attributes, be competitive and make Alaska the economically vibrant state it can be? Here’s what we can do: • Support a solution to Alaska’s fiscal crisis that includes cuts, restructures the Permanent Fund and require new taxes if necessary. • Urge our legislators not to kill our resource industries with unstable tax policies and overtaxation. • Tell our legislators to be responsible and find a solution to our fiscal crisis in the current session. • Talk to our employees, friends, neighbors and others so they understand the urgent need to fix our deficit on a sustainable basis. Our goal is to support a solution that includes stable tax policies and a balanced fiscal plan. Jim Jansen is chairman of Lynden. Marc Langland co-founded Northrim Bank and served as its chairman until he retired at the end of 2015.
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