Two of the key mantras recited by those testifying in favor of HB 110 (and nearly all of the pro folks identified themselves as working for oil companies or oil industry support organizations) were:
- We need this for jobs for Alaskans (variation: I want my children to be able to find a job here and stay in Alaska)
- All the jobs are moving to North Dakota where the tax environment is much better for the oil companies.
Jobs for Alaskans Mantra
Back in April already, Patti Epler reported at the Alaska Dispatch that Parnell's Labor Commissioner said jobs were increasing and that a large proportion of the jobs were going to non-Alaskans. Of course, anyone who has flown to Anchorage from Seattle on a Saturday or Sunday knows those planes are full of Outsiders flying back to their oil jobs. You can't help but overhear them discussing the hassles of commuting between the Lower 48 and Alaska.
The Anchorage Daily News had an article last week on the Senate Labor and Commerce Committee hearing in Anchorage recently where the Senators expressed:
"dismay over a state Labor Department finding that more than half of the new hires in Alaska oil and gas jobs during the third quarter of 2010 weren't state residents."The oil companies quoted in the article claim that most of their employees are Alaskans [possibly they are now, but were they when they were hired?] and the problem is with contractors. But the point is the claims were about how important the tax cut was to preserve Alaskan jobs - they didn't distinguish between oil company and contractor jobs back at the hearings.
North Dakota's Tax Environment is Taking All Our Jobs
The reason people gave for the oil boom in North Dakota was a more favorable tax structure. They didn't say anything about the fact that it's a lot easier to get oil from North Dakota to the other Lower 48 states. But I noticed recently an article that suggests North Dakota's low unemployment level and general good economy has a lot to do with their state bank.
In a response to a New York Times blog article that claims North Dakota's low unemployment is based on oil, Ellen Brown in Yes! magazine compares North Dakota to other oil states:
Oil is certainly a factor, but it is not what has put North Dakota over the top. Alaska has roughly the same population as North Dakota and produces nearly twice as much oil, yet unemployment in Alaska is running at 7.7 percent. Montana, South Dakota, and Wyoming have all benefited from a boom in energy prices, with Montana and Wyoming extracting much more gas than North Dakota has. The Bakken oil field stretches across Montana as well as North Dakota, with the greatest Bakken oil production coming from Elm Coulee Oil Field in Montana. Yet Montana’s unemployment rate, like Alaska’s, is 7.7 percent.
She goes on with further comparisons and points out that North Dakota has weathered the housing crisis better than other states.
North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008.To my knowledge, Alaska has also been in 'continuous budget surplus' during that time. So that does suggest we need to check Brown's data carefully.
But she finally concludes
If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank. [emphasis added]
Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state. In 2010, according to the BND’s annual report:
This is a point that the strongly 'anti-socialist' supporters of the $2 billion tax cut haven't mentioned about North Dakota.The Bank provided Secured and Unsecured Federal Fund Lines to 95 financial institutions with combined lines of over $318 million for 2010. Federal Fund sales averaged over $13 million per day, peaking at $36 million in June.
Talking about 'socialism' the supporters of HB 110 never talked in much detail about Norway. But a gaggle of Alaska legislators went there this summer to study their oil policies and there's a long Alaska Dispatch story on Norway's oil policies, including this:
In addition to depositing all of its oil and gas-related tax revenues into its savings account, the Norwegian government owns 67 percent of the shares of Statoil, a publicly traded oil and gas company based at Stavanger, just north of Oslo at the center of the nation's petroleum industry. All of the government's Statoil dividends go into the savings account. [emphasis added]The article also compares Alaska's Permanent Fund with Norway's equivalent fund:
. . . [O]ur $40 billion fund is not big enough to replace oil when oil eventually runs out. Norway's fund is big enough and getting bigger at a rate of $50+ billion per year! Norway estimates the fund will top $3 trillion before oil and gas runs out. That is enough to "pay out" $120 billion per year at their 4% pay out limit and still keep the fund inflation proofed. Calculate what that amount works out to for each of 700,000 Alaskans. Stunning. And to think they made their first deposit into their fund in 1996 while we started ours in 1977.
HB110 and the Alaska Redistricting Board
The governor (and we have to remember that before becoming governor he was a lobbyist for Conoco-Phillips) didn't get his bill passed in part because the state Senate is split 10 Republicans and 10 Democrats and their coalition wouldn't pass the bill.
But the key change that the Republican dominated (4-1) Alaska Redistricting Board accomplished was to put two Democratic Senators from Fairbanks into the same district, to put Democratic Senator Al Kookesh into the same district as Republican Senator Bert Stedman in Southeast, and to give Anchorage Democratic Senator Bettye Davis a much more conservative district. Knocking out just one Democrat from the Senate makes it an 11-9 Republican majority. And possibly enables a new version of HB 110 to pass in the future.