Testimony on HB 4005 and 4006: Mining and fishing taxes
May 27, 2016 • House Finance Committee
Good evening. My name is Marleanna Hall, and I am the Executive Director for the Resource Development Council for Alaska. I represent 100s of members in the private sector, including mining, fishing, tourism, oil and gas, and forestry companies.
My members are truly the life-blood of Alaska’s economy. We believe the best approach to expand the economy and generate new revenues for the state is to harvest more seafood, mine more minerals, produce more oil, and attract more tourists.
With regard to HB 4005 and 4006, raising taxes on companies that are experiencing low commodity prices and reduced investments is a terrible idea.
Increasing taxes on our natural resource industries will not encourage the development of new mines in Alaska, it will not boost investment the private sector, the very sector Alaska depends on. Higher taxes in this low-priced commodity environment will likely deter investment and lead to lower state revenues and a weaker private sector over the long run. Furthermore, the legislature should not be focused on increasing taxes until after a responsible budget has been developed.
Going back to HB 4005 and 4006, a major concern RDC has with these bills is that the administration has not conducted a risk analysis on the impact to the resource sectors. The effect of this tax proposal must be fully reviewed and unintended consequences, including potential impact on future investment, must be considered.
As an example in the fishing industry, my members are being asked to pay more taxes with the potential of decreased capacity in the management of the fishery resources, a resource that is currently one of the best managed in the world.
In the mining industry, exploration activities are sharply down. This bill will not help return Alaska to a place that companies will want to invest millions of dollars in exploration and development of new mines.
When you incentivize something, you get more of it. We need to incentivize the private sector to invest more in Alaska to create more wealth, provide more jobs, and ultimately provide more revenue to the State of Alaska.
Co-chairs and members of the House Finance Committee, I thank you for the opportunity to offer RDC’s perspective of HB 4005 and 4006 today and urge you to reject the legislation.