Dismantling the NYT's Misrepresentations of Governor Palin's Record

An article in the New York Times today discusses both the call by some in Alaska to dismantle two of Governor Palin’s energy related legislative victories and the claim by others that they are responsible for Governor Palin’s great fiscal record and Alaska’s strong fiscal health.

Current Alaska Governor Sean Parnell is seeking to make changes to Governor Palin’s oil tax structure–”Alaska’s Clear and Equitable Share” (ACES) legislation. This legislation replaced Governor Murkowski’s corruption-tainted oil tax plan. Governor Palin’s plan primarily taxed oil company’s net profits on production, which encouraged greater capital development and investment than Murkowski’s gross tax structure. ACES also provides oil companies with tax credits for investment in future production. Moreover, Governor Palin signed ACES into law in order to make the oil tax structure more in line with the state constitution which stated that natural resources (i.e. oil) belong to the people and need to be developed for the maximum benefit of Alaskans.

While Governor Parnell has stood with Governor Palin on AGIA (the natural gas pipeline), in rejecting federal earmarks, and in opposing Obamacare, he is among those who have called for reforming Governor Palin’s ACES legislation:

Gov. Sean Parnell, Ms. Palin’s fellow Republican and former lieutenant, has announced that it is his top priority to undo parts of major oil tax increases that Ms. Palin made law. He argues that high state taxes, not just federal regulations, are preventing oil companies from exploring new drilling in Alaska and therefore jeopardizing future state revenues.

“Lower taxes means more competitive,” Mr. Parnell said last week. “It means more jobs.”

The reality doesn’t match up to the Governor Parnell’s claims. The number of oil companies filing with the Alaska Department of Revenue has doubled indicating that competition has indeed increased. Alaska has the second most business friendly tax set-up — up two spots since the passage of ACES. Additionally, a report from Governor Parnell’s Department of Revenue indicated that 2009 yielded a record high in oil jobs. Even more recently, the newest employment numbers from Alaska show that oil job numbers were higher in January 2011 than in January 2010, indicating that jobs are growing at the seasonal level. Parnell argues that state revenues are in jeopardy, but it is estimated that his proposal would reduce revenues by $100-200 million. Governor Parnell is right on other issues, but the numbers tell a different story than he asserts when it comes to ACES.

The New York Times actually conceded that Governor Palin’s ACES contributed to Alaska’s surplus and strong fiscal health. However, some Alaskan legislators are trying to to laughably claim otherwise:

Compared with many states, Alaska is in fine shape in the short run. It is sitting on a $12 billion revenue surplus, a sum driven directly by the high price of oil. Taxes on oil production provide nearly 90 percent of state revenue. Some of the surplus comes from the increased tax on oil production, tied to the price of oil, that Ms. Palin supported in 2007. But not everyone is willing to give her credit for helping to create a nest egg for Alaska.

“We’re probably the most fiscally sound state in the union,” said Bert Stedman, a Republican who is co-chairman of the Senate Finance Committee and one of the Legislature’s most influential members. “I’d say she had little to nothing to do with it.”

Mr. Stedman, meanwhile, said the state was in good shape in part because lawmakers in both parties – armed with the surplus – pushed through major spending projects that have limited the recession’s impact.

Let’s take a look at Senator Stedman’s voting record, shall we? Stedman voted “No” on ACES, which did contribute to Alaska’s $12 billion surplus. However, Stedman did vote “Yes” on Governor Murkowski’s corruption-tainted oil tax plan. Stedman also voted to override Governor Palin’s veto of stimulus funding in 2009.

Also, as a part of the both the Senate Finance and Legislative Budget and Audit committees since 2005, Stedman helped craft and voted for every operating and capital budget proposal brought before the state Senate. Governor Palin vetoed hundreds of millions of dollars from the FY2008 capital budget alone, and in full made the largest veto cuts in the state’s history.

Additionally, Governor Palin cut the state budget by 9.5% during her time as Governor compared to Governor Murkowski, indicating that Governor Palin’s fiscal restraint, not legislative spending, was the cause of Alaska’s fiscal strength. It’s quite obvious that Governor Palin’s record shows far greater fiscal responsibility than Senator Stedman’s, and Governor Palin can rightly take far more credit for Alaska’s fiscal health than Senator Stedman.

The New York Times also questions the progress of Governor Palin’s natural gas pipeline project–the Alaska’s Gasline Inducement Act (AGIA)–which will bring natural gas from the North Slope of Alaska through Canada to the Lower 48 as an additional means of achieving energy independence. Governor Palin’s pipeline project was done in a transparent free-market friendly manner with proposals available for public consumption-- a far cry from the behind-closed-doors pipeline discussion with oil companies that were commonplace and unsuccessful in previous administrations. The New York Times argues that neither gas suppliers nor federal permits had been obtained for the project.

However, at the end of the first open season for bidding by gas suppliers this past summer, there were “several major players” who had submitted bids. Additionally, the pipeline company TransCanada and oil company ExxonMobil, both partners on AGIA-backed pipeline project, have had discussions with BP-ConocoPhilips to work together on the project. Additionally, the permitting process with both American and Canadian regulatory agencies has made “significant progress,” and the progress is right on track with time projections.

Despite what the media and Governor Palin’s detractors say, her record has been effective and fiscally sound. It’s ironic that the New York Times’s attempt at journalism in highlighting misrepresentations of Governor Palin’s record comes shortly after they announced that they will be charging for access to their site due to shrinking readership. So, while they generate faux concern for Governor Palin’s fiscal legacy, they should probably be more concerned with their own.

To be fair, I don't think most people realized how high the highest rate would be until well after it was passed (sound familiar). Many in the state legislature had their hand in the convoluted wording. It takes a team of lawyers and accountants to figure it all out.

You are being fair and understanding indeed. I too try to be most careful and give the benefit of the doubt where possible.

But in this case I respectfully disagree. You and I would not excuse a teacher that assigned a textbook to students without fully understanding what's in it. We would not excuse a doctor that assigned a pill without knowing fully what's in it. We would not excuse a financial adviser who recommended a financial security without knowing it. I cannot excuse lawmakers for doing the same; it's their duty to know.

The only reason we may be even tempted to excuse such a behavior is that we've gotten too used to it: there is probably not a bill nowadays that wouldn't be hundreds of pages long. We are tempted to think, "Yes, it is truly hard to stay on top of so much detail." Yes, it is hard. But, if it is too hard, they should not pass such bills. This country not only survived with simpler and less numerous laws but even grew and became prosperous. I simply cannot accept this status quo and excuse law makers for not understanding the bills they themselves pass.

Well, yes and no. First of all no matter how ACES is presented it’s not a “Palin” bill. She didn’t write it, though she did battle for provisions that were supposed to limit the effective tax. There was a huge anti-oil fervor in AK at the time. Some of it justified, much of it was as it turned out overblown and stoked by what we later learned to be prosecutorial misconduct and malfeasance on the part of the FBI. Palin was elected to to clean things up. ACES was indeed viewed as a tax increase to punish big oil for their buying and owning the State Government. The problem was that it got out of hand and became a frenzy for certain “left leaning” politicians both Republican and Democrat. The public was a big cheerleader all the while not fully grasping the actual bill contents. So she was at fault for maybe not putting the brakes on. But, a lot of Alaskans own a portion of the blame; including myself. Hind sight is 20-20. Now we have to fix it..........that much is clear.

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