Walker misleads on oil revenues; reporters bite

JUNEAU - Governor Bill Walker has said it publicly; Rep. Andy Josephson has repeated it. Alaska Democrats are parroting it.

So it must be true that the State of Alaska is giving more money in oil tax credits than it's currently receiving in oil revenues, right?

Actually....it's wrong.

By the governor's own spring revenue forecast numbers, oil is sending more than $1 billion to State coffers this year.

But to hear the governor tell it, oil is only providing $690 million to the State: 

“2017 is the first year that Alaska doesn’t earn positive income out of the oil and gas development. That’s a significant step,” Walker said at his March 21 press conference.

He let the lie get halfway across the world before the truth put on its shoes. The press was quick to repeat it, never questioning the numbers: 

“Josephson noted that the Revenue Department’s spring revenue forecast released on Monday shows the state collecting just $690 million from the oil industry next year, with most of that through royalties. Meanwhile, the state currently expects to pay $825 million in cash tax credits," wrote the Alaska Dispatch, unquestioningly.

There are a couple of problems with Josephson's thinking: $690 million is what is going into the unrestricted general fund. The rest of the $1 billion plus goes into various statutory accounts, such as the Permanent Fund, the Public School Fund, the Constitutional Budget Reserve, and such, as shown on Page 11, below, of the revenue forecast. 

And while it's true that during next fiscal year the state will be on the hook for $825 million in tax credits, it's a problem of the governor's own making: Walker did not pay the tax credits last year that the state owed. He postponed paying $200 million, and the note has come due. The actual amount of tax credits should be $625 million, but Walker kicked the can down the road last year.

Unfortunately, the lie told by the Walker Administration was accepted by media outlets and became the narrative the public is now repeating. People testifying to Senate Finance this week referred to the "fact" as they had read them.

Here's Page 11 of Revenue's Preliminary Revenue Forecast; circled in red are actual oil revenue receipts the State gets in 2016 and 2017:

PG_11.jpg

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