I am against ballot proposition 1, which is designed to nullify SB21 and reinstate the failed tax policy called ACES on North Slope oil production. SB21, the current tax law, is a reasonable and fair tax that has encouraged development of more oil production, and will put more oil in the pipeline. My opposition to ballot measure 1 is grounded in my belief ACES was a tax structure that discouraged oil investment in Alaska and helped to accelerate the decline in North Slope production.
My father, Walter Hickel, was the founder of our company, Secretary of the Interior under President Nixon and twice Governor of Alaska. He was a believer in the “owner state” and a strong proponent of resource development including oil.
It was during his first term as Governor that Prudhoe Bay was actually discovered. He surely believed that oil companies should pay for the extraction of oil, but he did not believe in confiscatory taxation that would act to bar development of Alaska’s resources. He was a fiscal conservative who believed that fair taxation on oil and other industries was in sync with the owner state philosophy. ACES was not a fair and equitable tax. It was complex, understood by few and needed revisions.
Our family-owned company is not a member of the oil industry. Our company serves Alaskans and others with hotel rooms, food and beverage outlets, office and retail spaces to rent, and we are developing residential lots in south Anchorage. We serve the tourism industry, the convention business, business travelers and government employees of the federal and state governments. Our business is certainly influenced by the oil industry, but only because the oil industry is the primary driver of the overall Alaskan economy and the Alaska state government.
If the Alaskan business climate is unfavorable, we see reduced revenue. This affects our company and each one of our associates who depend on that economy for their livelihood. When the business climate is positive, we see precisely the opposite effect, and each of our associates can realize a better standard of living. I personally believe that SB21 has caused increased business activity on the North Slope and throughout Alaska, contributing to a stronger and more vibrant economy by providing and sustaining jobs in our company and elsewhere in the hospitality and real estate industry.
Our family believes that Alaska is the best place on earth to live and raise our children. We are, therefore, committed to the longer-range view for our decisions. ACES was a short-term idea — it maximized government revenue with an unprecedented level of oil tax.
This year is the antithesis of 2010-2013 when oil taxes were high with the corresponding decline in oil production. The current environment encourages investment activity in many sectors of the economy, for example, oil, tourism and retail to name just a few. Hickel Investment Company will accelerate the development of Resolution Pointe, our home subdivision in South Anchorage, by making the capital investment in the infrastructure of the last three phases in 2015 — three years ahead of schedule.
A repeal of SB21 which reinstates ACES without tax revisions will in the long term have a negative impact on the economy, all Alaskans and our company.
As a lifelong Alaskan, born and raised in Anchorage, I believe that voting no on ballot measure 1 is good for the people, the economy and the state of Alaska.
• Walter J. Hickel, Jr. is the chairman and CEO of Hickel Investmen Company and Hotel Captain Cook.