By Senator Kim Elton
October 22, 2007
I seek this common ground in the turbulence of the pervasive, expensive, and overwrought ad campaign by the oil industry. Industry advocates continue their blitz of focus-group-honed messages that mislead, misguide, mischaracterize, miscast, misapply, misreckon, and misstate in an effort to get the legislature to again misfire on oil taxes.
I offer as evidence the oil industry's 'PFD Test' newspaper ad and mailer, the "Got Milked" newspaper ad, and the 'Jaws 5' newspaper ad. Crafting a new oil tax, the advocates say, will harm future permanent fund dividends, squeeze more out of poor ol' Bessie so bureaucrats can get a milk mustache, and lead to a shark feeding frenzy with Alaskans being the great whites.
I'm sure extensive and expensive polling identified these touch-button issues for the oil industry and focus groups vetted and honed the PFD/milked/shark messages that most effectively resonate with Alaskans. But it's too bad the polling and focus groups focus simply on message instead of, as Stephen Colbert might say, the "truthiness" of the messages.
Let's take these three scare messages from the oil industry in order and really test their truthiness. First, the 'PFD threat' ad: any message that suggests your PFD is threatened by this special session on oil taxes is baloney, piled high and served without mustard or mayo. In fact, the Alaska legislature has a history that demonstrates we've always inflation-proofed the corpus of the permanent fund, even though we're not constitutionally compelled to do so, and we've often deposited additional dollars into the corpus of the fund beyond what we're constitutionally compelled to do instead of going on a spending spree.
The inflation proofing and those other large appropriations to our permanent fund account for more than $1,000 of the $1,654 in this year's PFD checks. Instead of spending all the extra dollars, we used a lot of 'em to protect our future. These extraordinary appropriations to the permanent fund absolutely did not fatten government but did fatten your PFD and the permanent fund. I'd suggest we need to continue to protect our future by receiving a fair share for oil we own so we can continue to grow our fund and our future.
The 'milked' ad has Bessie the cow astraddle the pipeline. Bessie's udder is attached to the bottom of the pipeline and dollars are being milked from Bessie's pipeline udder into a "Big Bucket o'Bureaucracy". This 'milked' ad may be clever enough to win awards from marketing cognoscenti but that doesn't mean it should capture our hearts and minds.
To go with that Bessie visual, the ad narrative alleges Alaska wants to "milk more taxes" out of oil production just so state government can have more money to spend. The ad continues the milked theme saying: it's time to get Alaska "moo-ving" toward a sustainable future by letting industry get a fair share for their investments.
If they can stretch a metaphor, so can I--this ad is udderly misleading. First, let's remember that last session we set aside a billion bucks to forward fund education and sent $50 million back to the constitutional budget reserve. That billion plus did not go to bureaucrats and that, of course, doesn't comport with the big bucket o'bureaucracy vision the oil industry is spreading. Instead it was a billion dollars that didn't grow the bureaucracy but will maintain the essential service of education and will add to our rainy day fund that we've drawn down over past years.
Finally, the third ad: the shark (that being an over-the-top depiction of us) taking bites out of the pipeline. This one really got Daniel Johnston (a world-renowned expert on oil and gas taxes who has worked for oil companies and taxing regimes almost everywhere) in high dudgeon during his testimony to legislators yesterday. He noted the ad with the shark chewing on the oil pipeline makes it seem like oil companies will scurry to holes in the reefs while Alaska is out a huntin' (actually this colorful language is mine but that's what he meant). Don't believe it, he added (those are his words).
A bit later, Mr. Johnston said Russia on a good day is 50 times worse than Alaska on a bad day when it comes to oil policies and oil companies still invest in Russia. I'd add to his observation that other regimes have government take rates far higher than Alaska; they sometimes shoot at oil company workers; they sometimes kidnap field workers, and have been known to nationalize oil company investments.
So, who you going to believe, multi-national oil companies (whose economies are larger than most nations) that characterize us as sharks, or the more angel fish portrayal of oil tax experts?
Each time I see these three
ads, I have to remember: the enemy is not corrosion of the permanent
fund, the enemy is not bureaucrats at Bessie's udder, the enemy
is not sharks at the pipeline, the enemy instead is b.s.
About: Senator Kim Elton (D) is a member of the Alaska Legislature representing Juneau.
Received October 19, 2007 - Published October 22, 2007
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