Begich Refuses to Take Position on Energy Tax Hike

Murkowski, business groups, labor unions oppose effort to roll back new tax structure

Mark Begich
Mark Begich / AP
June 26, 2014

Alaska’s Democratic Senator refuses to take a position on a controversial state ballot measure that would dramatically hike taxes on the state’s energy companies.

Ballot Measure 1 would repeal a 2013 law that reduced the state’s tax burden on oil companies, the backbone of Alaska’s energy-dependent economy. Sen. Lisa Murkowski (R., Alaska) recently blasted the repeal proposal.

Her colleague, Sen. Mark Begich (D., Alaska), has refused to take a position on the issue, highlighting tensions between Alaska Democrats who are looking to increase state revenues on the state’s fossil fuel resources and the national party’s environmentalist base.

"I'm not going down that path with you," Begich said in March when asked about his position on Ballot Measure 1. "I think it's a great debate that's occurred."

In fact, that debate is very much ongoing, and the fight over the measure has pitted liberals in the state against pro-business Republicans and labor groups whose members depend on the oil industry.

Alaska voters will weigh in on the measure on Aug.19, the state’s primary day.

Murkowski spoke out forcefully against the measure last week at an event with energy companies and labor unions involved in the industry.

"Our reality in this state is that oil and gas has been our bread and butter," Murkowski said. "It has been what has brought the jobs, what has brought our economic security."

Five labor union locals, traditionally considered Democratic allies, joined Murkowski at the event. "Support from organized labor provides a critical, bipartisan grassroots component to our effort," said the leader of the "Vote No on 1" campaign.

The closest Begich has come to a position on the measure has been to proclaim the need for "certainty in a tax structure."

Former Alaska natural resources commissioner Dan Sullivan, who is running to unseat Begich in November, said the senator’s ambivalence is a sign that he supports increasing energy taxes.

"It seems Senator Begich supports passage of Ballot Measure 1, but he won't come clean with Alaskans," Sullivan said in a statement. "Mark Begich should be honest about his support for Ballot Measure 1 and his misguided vision for Alaska's future."

Though Begich has not taken a position on the measure, the Democratic Party of Alaska has vehemently criticized Senate Bill 21, the law that the measure would repeal, and attacked Sullivan for supporting it.

SB 21 scrapped a tax structure devised in part by former Gov. Sarah Palin (R.). The law increased taxes on oil producers as the price of oil increased, and eased those taxes as it came back down.

The state’s oil producers said that structure was too burdensome, and could discourage investment in Alaska’s North Slope.

SB 21 opponents derided the measure as a giveaway to those companies that would drain state coffers. But observers say that the law is actually increasing state revenue as more energy companies opted to invest in the state.

The number of oil rigs operating in the North Slope hit record levels this year under the SB 21 tax structure.

The Begich campaign did not respond to a request for comment on whether or not he supported SB 21.