Two former commissioners and several lawmakers are criticizing Gov. Bill Walker’s decision to veto more than $430 million from the state’s budget. The money would have gone to pay tax credits to oil companies.
The commissioners said Walker’s decision destroys the state’s credibility with the industry it depends on to develop oil and gas resources.
“What seems to have developed in this particular moment is the Governor having to kind of take hostages in order to get the legislature to act on what he wants them to act on with regard to a fiscal plan,” former Department of Revenue Commissioner Patrick Galvin said.
Galvin is currently the Chief Commercial Officer for Great Bear Petroleum, one of the independent producers that’s waiting on those payments the state is putting off.
Galvin and former acting commissioner of the Department of Natural Resources, Marty Rutherford, wrote an editorial in the Alaska Dispatch News saying the state’s refusal to pay its tax credit bill could have a chilling effect on development.
Galvin said the Governor’s veto will be felt not just by companies like Great Bear, but by all of the businesses that support the oil and gas industry in the state.
“It has an impact down the chain for all of the business that company wanted to do and they were expecting to get these payments and now they’re basically stuck waiting to see when the state will ultimately pay its bill,” Galvin said.
Rutherford has not returned repeated calls seeking comment since she stepped down as acting DNR commissioner in late June.
Lawmakers have also pushed back against Walker’s veto. Members of the Senate Finance committee grilled tax division director Ken Alper on the veto during a special session meeting in Anchorage on Wednesday.
Alper told legislators that the Governor’s decision to veto the credits is necessary without a comprehensive fiscal plan to bring the state out of its budget hole.
“In the absence of that, suddenly the governor’s larger concern is, how are we going to keep the lights on two or three years from now? We’re on a path to deplete the constitutional budget reserves a year from now.”
Alper’s explanation, and his presentation on the hundreds of millions in deferred credits that will hang over the state in future budget years, drew the ire of Fairbanks Republican Sen. Pete Kelly.
“Yeah Ken, what you’ve done, it appears to me, is you’ve put together a slide that essentially cries out ‘Help. Stop me before I make another irrational veto.’ Because as Sen. MacKinnon said, you created a problem and now you’re saying that somehow the problem — that the Governor created with the veto — that we have to make a complete fix, or a complete change to our oil taxing regime rather than just have him start acting a little more savvy.”
The state House has invited the Senate to meet Friday to discuss voting to override the tax credit veto and the more than $1 billion Walker stripped from the budget. That includes a $1,000 per-person reduction to Permanent Fund dividends this year.
The Senate has yet to accept the invitation. They’ll need a three-quarter majority vote, or 45 of the 60 legislators, to overturn any of the Governor’s vetoes.
Rashah McChesney is a photojournalist turned radio journalist who has been telling stories in Alaska since 2012. Before joining Alaska's Energy Desk, she worked at Kenai's Peninsula Clarion and the Juneau bureau of the Associated Press. She is a graduate of Iowa State University's Greenlee Journalism School and has worked in public television, newspapers and now radio, all in the quest to become the Swiss Army knife of storytellers.
