Samuels wants Parnell T.V. ad pulled

FEBRUARY 8, 2010 - 4:25 PM

From Sean Cockerham in Anchorage --

Candidate for governor Ralph Samuels is calling for a halt to a T.V. ad featuring Gov. Sean Parnell that’s being aired by a non-profit advocating against domestic violence and sexual assault.

But a third candidate running in the Republican primary for governor, Bill Walker, says it is Samuels who needs to back off.

The Samuels campaign wrote a letter Friday to Parnell’s campaign manager, Michelle Toohey, complaining about the ad and saying KTUU Channel 2 pulled it from broadcast after hearing Samuels’ concerns. The Samuels campaign wants the ad scrubbed from any other stations as well.

“While this is an important message for Alaskans, using Governor Parnell, a declared candidate for election in a contested GOP primary, as a television spokesman raises serious questions about whether these ads constitute a political use of television airtime,” the Samuels campaign wrote in a letter Friday to Parnell’s campaign manager, Michelle Toohey.

The Samuels campaign is arguing that the ad could represent “an improper in-kind contribution” by the Alaska Network on Domestic Violence and Sexual Assault to Parnell. Samuels’ campaign manager, Suzanne Armstrong, also cited the fact the group receives government grants and said it’s not allowed to advocate for a candidate as a nonprofit.

Armstrong said that, in order to avoid possible campaign finance violations, the Parnell campaign should reimburse the Alaska Network on Domestic Violence and Sexual Assault $600 to cover the ads that have run so far on Channel 2.

There are four television ads in the campaign, which has a theme of “Alaska Men Choose Respect. The Parnell ad features the governor talking about how his grandfather was an abusive alcoholic, and how his father chose to be different and taught Parnell and his brother to respect others.

The Parnell campaign hasn’t responded to the criticism of the ad, although the governor’s office sent a statement saying that:

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Does Alaska need a transportation permanent fund?

FEBRUARY 8, 2010 - 3:00 PM

From Lisa demer in Anchorage --

One of the state House leaders is proposing a big change in how road and other transportation projects are paid for in our state.

State Rep. Peggy Wilson, R-Wrangell and chair of the House Transportation Committee, talked to reporters this morning about a proposed constitutional amendment to create a new permanent fund, just for transportation.

She said the federal money is drying up and the idea is to create a pot with state dollars. Projects wouldn't have to go through all the federal red tape though they'd still have to meet the same construction standards, Wilson said. Her committee has been working on this since last year. Members traveled to villages and communties, looking at roads and airports. She introduced two measures to accomplish the idea on Friday.

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Begich at DSCC fundraising event with "who's who" of lobbyists

FEBRUARY 8, 2010 - 11:32 AM

From Sean Cockerham in Anchorage –

Alaska Sen. Mark Begich was among a group of Democratic senators who spent the weekend of Jan. 29-31 in Miami Beach at a fundraising event that included dozens of corporate lobbyists.

A guest list for the Democratic Senatorial Campaign Committee event was obtained by Politico, which said it involved a “who’s who of 108 senior Washington lobbyists,” including representatives of banking, tobacco, oil and drug interests.

Begich spokeswoman Julie Hasquet said the Alaska senator did not do any fundraising in Miami. “He was a guest at a fundraiser for the DSCC,” she said in an email.

The Democratic Senatorial Campaign Committee raises money to help elect Democratic senators.

Begich was among a dozen Democratic senators at the DSCC Winter Retreat at the Ritz Carlton South Beach Resort. The event included receptions and “informal conversations with senators.”

Companies with representatives who signed up for the Democratic fundraiser include Altria (formerly Phillip Morris), the American Banker’s Association, Eli Lilly, the defense contractor Lockheed, Walt Disney, Anheuser Busch, Marathon Oil, Ford Motor Company, and many others. Top independent lobbying firms also sent representatives.

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Begich pushes to limit corporate contributions; Alaska campaign finance regulators wait for direction

FEBRUARY 5, 2010 - 11:14 AM

From Sean Cockerham in Juneau –

Alaska Sen. Mark Begich is asking the Legislature to back his attempts to curtail the recent U.S. Supreme Court ruling allowing corporations and unions to spend unlimited money in elections.

In the meantime, Alaska campaign finance regulators are waiting for lawmakers to tell them what to do.

Heres’s what Begich, a Democrat, is proposing:

-- Banning corporations that are more than 20 percent foreign owned from spending money on campaigns.

-- Requiring approval from shareholders before corporations can spend money for political purposes.

-- Requiring the top official in a corporation (CEO, CFO, etc.) to personally appear in the political advertising.

Begich wants the Alaska Legislature to support Congress in putting such limits on the ruling, and to change state law to require corporations to disclose their spending in Alaska elections.

Under the Supreme Court ruling, corporations and unions can't give directly to candidates. But they will be able to spend unlimited amounts on advertisements for, or against, those on the ballot.

Alaska's ban on corporate contributions has been challenged by the Wasilla-based Conservative Patriots Group in the wake of the ruling. It asked the Alaska Public Offices Commission to rewrite the regulations by Feb. 15 so the group can support candidates for Anchorage Assembly in the April municipal election.

APOC director Holly Hill told me yesterday that her agency can’t change its regulations in a way that conflicts with Alaska law – and the law still technically is that corporations and unions can’t spend on campaigns, even though the Legislature’s lawyers say that law now appears void.

“We have been advising the public that before they take any action to financially support certain candidates to review the laws and regulations carefully and to ask for a formal advisory opinion under AS 15.13.374 if they would like clarity about a specific action they are about to undertake.” Hill told me in an email.

The attorney general’s office, which is in charge of enforcing Alaska election law, meanwhile is still reviewing the Supreme Court ruling and what it means for state elections.

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Palin e-mails show Todd Palin was active participant in administration (Updated with how to search)

FEBRUARY 5, 2010 - 7:57 AM

Former Gov. Sarah Palin and husband Todd Palin after she gave a farewell speech prior to her resignation in Fairbanks last July. (Bill Roth/ADN)

UPDATE: Crivella West, the company that worked with msnbc.com on the public-records request that resulted in release of the Palin e-mails, has created a searchable database of the e-mails. Sean Cockerham, our reporter in Juneau, says people in Capitol offices were busily clicking away when he was up there earlier today. (You may need to hit the link a few times; evidently the site is getting a lot of traffic and is slow to load.)

The Associated Press, which had a parallel records request, has moved its own story here.

From David Hulen in Anchorage --

This from msnbc.com this morning, under the headline, Palin e-mails reveal a powerful ‘first dude’.

Excerpt:

Nearly 3,000 pages of e-mails that Todd Palin exchanged with state officials, which were released to msnbc.com and NBC News by the state of Alaska under its public records law, draw a picture of a Palin administration where the governor's husband got involved in a judicial appointment, monitored contract negotiations with public employee unions, received background checks on a corporate CEO, added his approval or disapproval to state board appointments and passed financial information marked "confidential" from his oil company employer to a state attorney.

Also withheld: a discussion of how to reply to "media questions about Todd Palin's work and potential conflict of interests."

Read more here.

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First hearing on bill to roll back oil taxes set for Monday

FEBRUARY 4, 2010 - 11:43 AM

From Sean Cockerham in Juneau –

The state House next week will take up two of the biggest issues of the legislative session: whether to lower oil taxes and what to do about the U.S. Supreme Court ruling requiring states to allow unlimited corporate and union election spending.

The House Resources Committee on Monday at 1 p.m. will hold the first hearing of the legislative session on a bill to lower oil taxes.

It will take up House Bill 308, sponsored by Anchorage Republican Rep. Craig Johnson, who is co-chair of the resources committee.

Johnson's bill could result in a billion dollars less in state revenue in a year when oil prices are as high as they are now. The bill is co-sponsored by the other chair of the resources committee, Mark Neuman, as well as Republican Reps. Jay Ramras. Charisse Millett, Kyle Johansen and Mike Hawker.

The House State Affairs Committee a week from today (Thursday) at 8 a.m. will hold a hearing on the Supreme Court ruling that effectively strikes down Alaska's ban on corporate and union election spending.

“It’s irrelevant whether we agree or disagree with the Court decision,” said State Affairs Committee Chairman Bob Lynn, an Anchorage Republican. “The court’s decision has created a political earthquake with repercussions that must be resolved before the upcoming 2010 elections. It’s probable that new legislation will be required to comply with the court’s decision.”

His hearing follows yesterday's hearing on the issue in the Senate Judiciary Committee.

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"There are now no limits on independent expenditures ..."

FEBRUARY 3, 2010 - 10:41 AM

From Sean Cockerham in Juneau –

A preliminary opinion from the Legislature’s lawyers says all bets are now off when it comes to corporate spending in Alaska elections, with no limits or any requirement for disclosure.

“Given the silence of our state statutes and the likelihood that our existing statutes will not be enforced following the (U.S. Supreme Court’s) holding in Citizens United, there are now no limits on independent expenditures made by for-profit corporations and no statutory disclosure, identification, or reporting requirements for those disclosures,” said the opinion from legislative counsel Alpheus Bullard.

Bullard wrote that it appears to apply to labor unions as well, although he found that was not made explicit in the recent U.S. Supreme Court decision.

His opinion was a first pass on the subject, and the Legislature’s lawyers are liable to have more to say on the subject at a state Senate Judiciary Committee hearing this afternoon.

Lawyers from the Alaska Department of Law will also be at the hearing to talk about what the Jan. 21 U.S. Supreme Court ruling is going to mean for Alaska elections. They're expected to talk about what the state's official position will be.

Corporate campaign contributions in Alaska were against the law prior to the U.S. Supreme Court ruling. Under the ruling, corporations and unions can't give directly to or coordinate with candidates.

But they will be able to spend unlimited amounts on advertisements for -- or against -- those on the ballot. The justices split 5-4, with the majority ruling that the government should not bar political speech.

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Democrats: Alliance ads on oil taxes "dishonest"

FEBRUARY 2, 2010 - 12:49 PM

From Sean Cockerham in Juneau –

State House Democrats today were assailing the industry ads calling for a rollback in state taxes on oil company profits.

“The Alliance ads are dishonest,” said Anchorage Democratic Rep. Les Gara. “When jobs are up, it’s not OK to lie to Alaskans in seeking a tax break. When investment is up it’s not OK to lie to Alaskans to get a tax break. When profits are up, it’s not OK to lie to Alaskans to get a tax break.”

Gara cited the recent Alaska Department of Revenue report saying that oil industry jobs and investment have risen in the state since Alaska increased its oil taxes in 2007. Conoco Phillips has taken $6 billion in profits from the state since the tax change, the Democrats said, describing it as the company's most profitable oil province in the world.

House Democratic Reps. Harry Crawford and Beth Kerttula joined Gara at an event in the Capitol this morning to talk about the Alliance ads, saying jobs were down when the state had lower taxes. Kertulla said the ads “just made me crazy.”

The Alliance ads highlight Alaskans who say they lost their jobs in the industry.

The Alliance has a website with arguments for reducing the state's oil taxes.

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Millett files bill to lower oil taxes

JANUARY 29, 2010 - 6:43 PM

From Sean Cockerham in Juneau –

There was another bill introduced in the state House today to roll back oil taxes.

This one was filed by Anchorage Republican Rep. Charisse Millett. Her House bill 321 would reduce the base rate for how much the state taxes oil company profits from 25 percent down to 20 percent.

It’s a different approach then the bill filed earlier by Anchorage Republican Rep. Craig Johnson to reduce oil taxes.

Johnson's House Bill 308 wouldn't change the basic rate of Alaska's oil production tax. But it would cut in half the "progressivity" surcharge the state collects when oil prices are high. The Legislature's 2007 tax rewrite includes a 0.4 percentage point tax increase over the base tax rate for every dollar the price of oil rises above about $56 per barrel.

Johnson's bill would bring that surcharge down to 0.2 percentage points.

Johnson's bill could lead to a billion dollars less in state revenue in a year when oil prices are as high as they are now. I haven't seen a good dollar estimate for Millett's bill.

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Sitka Assembly member: Kookesh also pressured that city

JANUARY 29, 2010 - 10:12 AM

From Sean Cockerham in Juneau –

In the wake of the Craig controversy, a Sitka Assembly member has come forward with a charge that Albert Kookesh also used his position as state senator to pressure that city not to oppose a Congressional bill giving federal land to the Native corporation Kookesh works for. “It’s pretty much like what he did in Craig,” said Jack Ozment, the Assembly member.

Ozment is talking about a 2008 meeting in Sitka when the Assembly there was considering a resolution opposing the Sealaska lands bill. Kookesh, Sealaska’s board chair, was at the meeting representing the corporation.

“When I’m not serving (on) the Sealaska board I’m also a state senator,” the Democrat from Angoon told the Assembly. “And as a state senator I’ve done a number of things that benefit Sitka. And I just want to remind you of it because I’m an Alaska Native and I’m doing good things for Sitka.”

He pointed out every year he votes on the budget for Mt. Edgecumbe, the state-supported boarding school in Sitka for rural students. Kookesh, a Mt. Edgecumbe graduate, said he worked hard to reopen Mt. Edgecumbe when it closed, and that it would be devastating for Sitka if it closed again.

“I’m also a member of the majority in the Alaska Legislature with Senator Stedman and the discussion about the cruise ship tax is a valid one. And I sit as a member of that organization that’s going to help decide those taxes, and I think that Sitka is going to benefit and do very well with the cruise tax initiative and with the impact to this community.”

Kookesh spoke next about the declining population in Southeast Alaska, and said Sealaska was trying to stimulate the economy. He said Sealaska is working to deal with Sitka’s concerns in the lands bill.

Then Kookesh did something that he didn’t do when he made his controversial comments in Craig last month:

He said he wanted to make a “clarification point”:

“I’m a state legislator. I’m a member of the state Senate. Those comments I made about helping Sitka are the same comments I would make to any community in Southeast Alaska. I would not, no matter what you do on this resolution, do anything to hurt Sitka. I’ve got family members and a lot of cousins and relatives who live here. So my commitment of course is to Southeast Alaska.”

He finished by saying Sealaska is a good neighbor and talked about the dividend the Native Corporation it gives its shareholders.

“We would really appreciate a resolution in support of our legislation, and if you can’t see your way to do that then accept Sitka Tribe’s motion to you that you stay neutral,” Kookesh told the Assembly.

Sitka didn't end up passing its resolution opposing the Sealaska bill. The Craig City Council this week wrote a letter with a list of concerns on the bill.

Listen to all of Kookesh's comments here:

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Push in Legislature to oppose Cook Inlet beluga habitat plan

JANUARY 27, 2010 - 12:33 PM

From Sean Cockerham in Juneau –

Anchorage Republican Rep. Charisse Millett filed a resolution today asking the Legislature to oppose the proposed federal designation of critical habitat in Cook Inlet for beluga whales.

The resolution is liable to pass quickly. House Speaker Mike Chenault, a Nikiski Republican, only referred it to a single committee.

“The conservation benefits, which are entirely uncertain and speculative, are outweighed by the costs and impediments posed by designation of critical habitat in this instance in most, if not all, of the proposed designation area,” said the resolution, which would be sent to the president, members of Congress, federal officials, and Alaska government leaders.

The National Marine Fisheries Service has proposed designating more than 3,000 square miles of Cook Inlet as critical habitat for the Inlet's beluga whales. According to federal estimates, the Inlet's beluga population has declined from 1,300 animals in 1979 to 321 in 2009. The Cook Inlet belugas were listed as endangered a little more than a year ago.

NMFS officials say the designation would require other federal agencies to consult with them before approving projects in the proposed critical habitat areas.

That could mean changes to projects like seismic drilling for offshore oil and gas, the federal regulators say, but they don’t anticipate it will result in rejection of energy projects. The feds also said they don’t plan to plan to scrutinize the state-managed salmon fisheries, although state fish and game officials are worried activists would sue to get federal involvement.

Read the proposed resolution of the Alaska Legislature with its long list of objections by clicking here.

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Sealaska CEO: unfortunate that media is focusing on Kookesh controversy

JANUARY 26, 2010 - 6:02 PM

From Sean Cockerham in Juneau –

Sealaska CEO Chris McNeil today called the controversial comments that state Sen. Albert Kookesh made to the Craig City Council earlier this month an “incongruous choice of words." McNeil said it’s unfortunate the media is focusing on them rather than the issue of Sealaska’s lands bill in Congress.

Kookesh, an Angoon Democrat who represents Craig in the Legislature, is drawing ethics allegations after coming to the city council meeting to lobby on behalf of the Sealaska bill. Kookesh, who is Sealaska’s board chair, brought up the city’s funding requests to the Legislature as the council talked about whether to send Congress a letter opposing the Sealaska bill.

"I am the state senator that represents Craig. I'm not a vindictive person," Kookesh told the council. "I see you're going to have your 2010 capital projects on the table here tonight. And who's it going to go to? It's going to go to me. And to (Rep.) Bill Thomas, who is also a Sealaska board member. We have to be good neighbors."

‘There are times you are going to need my help and Bill Thomas' help," Kookesh said. "And this is a time we need yours."

Sealaska CEO McNeil’s statement today described it as a “brief, unguarded moment,” and praised Kookesh as a dedicated and passionate advocate for Southeast Alaska villages.

Here’s McNeil’s full statement:

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Democrats protest Cohen's removal from cruise science panel

JANUARY 26, 2010 - 1:40 PM

From Sean Cockerham in Juneau –

Six Democratic legislators are protesting the removal of Haines environmental activist Gershon Cohen from a state science panel that's working on cruise ship wastewater treatment issues.

Two senators and four representatives wrote Gov. Sean Parnell today. They said it appears Department of Environmental Conservation Commissioner Larry Hartig removed Cohen from the panel after members of the cruise industry complained about his appointment. The legislators suggested it’s an issue of First Amendment free speech rights.

“Our understanding is that Commissioner Hartig… informed Mr. Cohen he had been removed from the panel, because, in the commissioner’s words, Mr. Cohen would be “an advocate” for clean water. This is ironic because of the presence on the panel of others with the distinct responsibility of advocating on behalf of the cruise lines,” the legislators wrote.

Cohen was a co-sponsor of the 2006 initiative that put strict limits on cruise ship sewage discharge and a $50 per-passenger head tax on the industry. The Democratic legislators wrote that Cohen has a PhD and is uniquely qualified to be on the panel, something they said the Parnell administration acknowledged in a press release after appointing him last month.

Hartig told the Alaska Public Radio Network earlier this week that Cohen has spent years advocating his position, and he questioned Cohen’s ability to now take an independent look at the cruise ship wastewater treatment issues from srtictly an technological and economic perspective.

Sens. Bill Wielechowski and Hollis French signed the letter of protest, as did Reps. Beth Kerttula, Berta Gardner, Mike Doogan and Les Gara.

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Chenault wants to use permanent fund earnings for in-state gasline

JANUARY 25, 2010 - 12:03 PM

From Sean Cockerham in Juneau –

House Speaker Mike Chenault just introduced a bill calling for a statewide advisory vote on using permanent fund earnings to build an in-state pipeline bringing North Slope natural gas to the Railbelt.

Such a pipeline is seen by legislators as a backup if the proposed big natural gas pipeline to the Lower 48 isn’t coming anytime soon.

The most commonly discussed route for an in-state gas pipeline is from the North Slope down the Parks Highway to Point Mackenzie area, and the project is estimated to cost at least $4 billion.

If Chenault’s HB 312 passed, voters in the August primary election would be asked:

“After paying annual dividends to residents and inflation-proofing the Alaska permanent fund, should permanent fund investment earnings be appropriated to help pay the costs of constructing an in-state natural gas pipeline?”

Chenault, a Nikiski Republican, said he thinks voters would agree to use fund earnings for the project. Senate Finance Committee Co-Chair Bert Stedman, R-Sitka, didn’t seem really excited about Chenault’s bill, saying new bills are introduced all the time and he hasn’t looked this one over yet.

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Oil industry launches ad campaign calling for oil tax reduction

JANUARY 25, 2010 - 11:18 AM

From Sean Cockerham in Juneau –

The oil industry today launched a television and Internet advertising campaign aimed at convincing the Legislature to lower oil taxes.

It’s by the Alliance, a trade group for Alaska oil and mining contractors. The effort is called “FACES OF ACES,” a reference to the state’s ACES tax system, Alaska’s Clear and Equitable Share.

The T.V. spot features a forbidding sound of tolling bells and the words “Real Alaskans, Real Casualties of Alaska’s Oil Tax Policies,” followed by a series of black and white photos of people.

It ends with the statement that ACES is costing jobs and needs to be fixed.

The ads are running on commercial stations as well as Gavel to Gavel, which broadcasts the legislative session and is on all day long in offices at the Capitol.

The Alliance is urging people to contact their legislators and the governor.

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New Wheeler report

JANUARY 24, 2010 - 8:46 AM

We have a story today about a new report from City Attorney Dennis Wheeler raising new questions about the accuracy of financial information given the Assembly and others during the final months of the Begich administration.

Download the full report here.

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Judge sides with Palin on emails

JANUARY 22, 2010 - 4:54 PM

From Sean Cockerham in Juneau --

A superior court judge today ruled in favor of Sarah Palin in the lawsuit filed by Andree McLeod against Palin's use of personal email accounts for state business.

"A great number of Alaskans may share McLeod's belief that the governor and top staff should not be communicating by unsecure, private accounts, but if such actions are not prohibited by state law, then closing this perceived "loop-hole" is a matter for the consideration of the Legislature. It is not this Court's job to legislate a ban to a lawful practice," the ruling said.

Judge Patrick McKay also terminated a ruling from last year that ordered Palin to preserve e-mails she's sent from or received at private e-mail accounts.

McLeod and others have been seeking Palin's emails.

McLeod said in the lawsuit that Palin and her officials violated the public records law by using off-the-record networks to communicate about state policy and matters of public concern.

Gov. Sean Parnell banned his predecessor's e-mail practices after taking office in July, but the Attorney General's office fought McLeod's lawsuit.

We'll have a full story up as soon as it's ready. In the meantime, read the ruling here.

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Leg. ethics dings Cowdery - more than a year after he pleaded guilty in court

JANUARY 22, 2010 - 9:06 AM

From Sean Cockerham in Juneau --

The Legislative Ethics Committee has finally released a ruling that, shockingly enough, concludes that convicted former state Sen. John Cowdery violated state ethics rules as well as criminal law when he conspired with Bill Allen to try and bribe Sen. Donny Olson.

The legislative ethics committee didn't recommend any penalties for Cowdery, saying his federal bribery conviction and sentence to serve six months in home confinement and pay a fine of $25,000 was enough punishment.

The legislative ethics committee took its sweet time: the ethics complaint against Cowdery was filed back in August 2008, following his federal indictment. Cowdery pleaded guilty to a conspiracy charge in federal court in December 2008 and was sentenced in March.

The committee members decided to wait until after the federal case was over and apparently just now got around to wrapping up what is pretty much a formality at this point. The committee used Cowdery's guilty plea in federal court as evidence he did indeed conspire to bribe in violation of the ethics code.

The records show the committee discussed the matter during its meetings on Aug. 19, 2008, Nov. 19, 2009 and Jan, 5, 2010.

No word on who filed the complaint.

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Wielechowski and McGuire: fund Susitna dam and Chakachamna

JANUARY 21, 2010 - 7:07 PM

From Sean Cockerham in Juneau --

The co-chairs of the Senate Resources Committee want to put millions of dollars toward the massive Susitna dam project. Democratic Sen. Bill Wielechowski and Republican Sen. Lesil McGuire want $6 million spent for preliminary work on the Susitna River project, which could cost at least $4 billion to build.

They’re also proposing the state spend $3 million to explore the viability of a competing dam project at Chakachamna Lake across Cook Inlet from Anchorage.

A recent state-funded study said the Susitna project, unless it was greatly scaled back, would provide far more power than the state needs.

Consultants Black and Veatch said even a scaled-back Susitna dam would not be as cost-effective as the Chakachamna project, which has an estimated cost of $1.6 billion.

Wielechowski and McGuire, both of Anchorage, said both projects need to get state funding at this point, because it’s possible that Chakachamna doesn’t pan out and they don’t want to give up on Susitna. The state is also pursuing a “bullet line” to bring North Slope natural gas to the Railbelt, and if that happens it’s hard to see the power need for either big dam project. But the bullet line is far from becoming a reality.

Wielechowski and McGuire are proposing a total of nearly $300 million in state spending for energy work, two-thirds for the “Railbelt Energy Fund” for future power development projects in the region. They also want $25 million more spending for renewable energy projects, $25 million for weatherization, $8 million for rural power system upgrades and millions more for bulk storage facilities and the creation of an emerging energy technology fund to develop new technologies.

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Galvin:oil industry jobs and investment up but drilling down

JANUARY 21, 2010 - 3:49 PM

From Sean Cockerham in Juneau –

Revenue Commissioner Pat Galvin wrote a letter today to legislators interested in lowering oil taxes, telling them oil industry jobs and investment in Alaska are up but drilling activity has been down.

Galvin's letter was a response to questions posed by 15 state representatives in early December. The legislators said they were worried the ACES oil tax system the Legislature put in place in 2007 was “doing more harm than good.”

They wanted statistics on oil and gas activity and employment since the tax passed.

Galvin wrote back today that the state had its highest industry employment in history in 2008, with 12,800 jobs and annual average earnings of $113,541. The 2009 numbers are preliminary, he said, but are expected to be even higher.

He also wrote that industry spending has risen since the Legislature increased oil taxes in 2007. Galvin told the legislators that revenue department forecasts based in company tax information indicate it will keep going up. “Based on a review of taxpayer reports, the growth of overall capital spending is primarily attributable to drilling, seismic and other projects, and not pipeline repairs and other maintenance costs,” Galvin wrote.

Legislators who want to cut oil taxes argue that many of the current oil industry jobs are in temporary maintenance projects to renew aging fields and that with declining production the state will be in trouble once that work is finished.

Galvin also reported that the state approved 175 permits to drill last year, which is the lowest number since at least 2000. It was down from 203 in 2008 but was only slightly less than the 177 permits in 2007. The downward trend of fewer drilling permits started in 2005, Galvin wrote, before the state raised oil taxes.

"It is unclear, however, what specifically may have caused the downturn in permitting. Generally speaking, industry activity is most closely correlated with oil prices, which climbed rather steadily through the period in which permitting declined," Galvin wrote.

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