Commentary: Death by one cut

By Jeremy O’Neil

For The Cordova Times

Valdez knows disasters. The entire town site was condemned and painstakingly relocated to its present site after the 1964 earthquake, which took 38 lives in Valdez. In 1989, one of the largest oil spills in history fouled the pristine majesty of our front yard and breadbasket, Prince William Sound, and with it, stole vast stretches of our well-being and livelihood. Through calamities, Valdez has stood as a testament of the Alaska spirit that triumphs over hardship and course-corrects toward a brighter future. Today however, Valdez faces a new danger, Senate Bill 57, a proposal by Gov. Mike Dunleavy that threatens our way of life and categorically attempts to shut the lights off.

As mayor of this quintessential Alaska city, I can state with confidence that SB 57, the governor’s overture to seize municipal property tax revenue from oil and gas properties, would reduce Valdez to a ghost town. By operation, SB 57 alone eliminates 80 percent of City of Valdez funding. Forgetting that Valdez is the strategic home to the country’s northernmost ice-free port or is the cornerstone of Alaska’s economy, this draconian measure would leave us unable to provide the basic municipal services of police, fire, education, roads, utilities, ports and harbors relied on by residents, visitors and commerce alike.

Alaskans are no strangers to property tax. The equitable tax system afforded to local governments and applied to residential and commercial property based on assessed value has worked for more than 100 years. The individual or family pays the same mill rate (tax percentage) as their commercial neighbor. The cruel effect of SB 57, however, diverts essential local revenue to the state, destabilizes the remaining tax system and turns our biggest industry into a “free rider” of community services. By robbing Peter to pay Paul, the governor is only shifting the state’s deficit problem onto local governments. Not only does this slippery slope set the stage for future property tax seizures, but for communities like Valdez, whose economy is largely defined by oil, it is a death blow our remaining taxpayers can’t withstand.

Since 1912, Alaska has recognized the municipality’s right to support and self-govern through property taxes. Decades ago, when oil and gas emerged as the predominant economic drivers for our state, the local government’s right to tax this property was ratified and reinforced. To promote SB 57 to Alaskans, the Dunleavy administration now characterizes this long-accepted right as a “sweetheart deal” afforded communities with oil and gas property. But common sense dictates that you cannot divorce heavy industry’s presence in a community from the risks and responsibilities borne by that community. Since the first barrel of oil, Valdez has been clocking in for the state of Alaska, supporting the infrastructure and workforce necessary to ensure a major part of our state’s economy runs smoothly.

Valdez is a vibrant recreation wonderland situated next to one of the largest industrial complexes in the state. Alaskans enjoy Valdez for its natural splendor and depend on it for its vital role in our economy. The governor has yet to reach out to the people of Valdez and explain how we survive in a post-SB 57 world. As far as I can tell, he is waiting for us to give him proposals on how we are to survive. I’m telling him right now: Valdez doesn’t make it in a SB 57 world. The disaster that is SB 57 goes against basic principles of self-governance and local control, something every Alaskan should be horrified about.

Jeremy O’Neil serves as mayor of Valdez. He is a third-generation Alaskan who grew up on the south side of Fairbanks. He is an attorney and CPA with two degrees from the University of Alaska Fairbanks (Accounting and MBA-Capital Markets) and is a lifetime member of the UAF Alumni Association, having benefited greatly from his in-state education. He and his wife Dahlia are parents to six children.