Dunleavy wants 90% property tax cut for gas line for 30 years

Gov. Mike Dunleavy wants a 90 percent property tax cut on gas pipeline facilities for 30 years.

He told legislative leaders last week of his plan, according to this solid report today in the Anchorage Daily News.

There are a lot of problems here that make it unlikely the 90 percent cut will take place.

First and foremost, there is nothing to show what evidence underlies Dunleavy’s choice of 90 percent, which means no one should trust the number.

It seems likely that 90 percent is what Glenfarne asked for, assuming the company knew there is no chance of a 100 percent tax cut.

Second, he hasn’t invited legislators, local governments and Alaskans to have a say on what the correct number should be.

Third, there is no evidence that Dunleavy has done any work to work this into the alleged so-called imaginary fiscal plan that is so important he is keeping it a secret.

Fourth, Dunleavy’s claim that this is the only thing the project needs from the state is laughable.

“Two borough mayors reached for this article raised concerns about the proposed tax rate, including whether local revenue from it would be offset by other benefits, and why the Dunleavy administration has chosen it as a starting point for legislative discussions without their input,” the Daily News said.

The ham-handed governor hasn’t learned that edict and insults don’t work.

“It has to be transparently and fairly negotiated between the involved parties in good faith, and we’re standing by ready to engage in that process and move Alaska and that project forward,” Kenai Mayor Peter Micciche, a Republican, said of whatever tax break Glenfarne needs to support the project.

“But I can’t imagine that a 90% reduction in local revenues associated with oil and gas properties has any chance of moving forward.”

Dunleavy also says there is nothing else that the state has to do to juice the project.

This is not true. The oil companies that own the gas that has to be sold to make this project go will want a guarantee that the state will not raise taxes in years to come.

Dunleavy is claiming that the state already took care of this a decade ago with a law that sets the tax rate for gas.

But that law can be changed by future legislators, a situation that will make the oil companies reluctant to sign long-term deals to sell the gas. Project proponents will claim that the oil companies will have to sell the gas under term of their leases, but that could lead to a long court fight.

Dunleavy told the Daily News that if the Legislature can put aside unimportant matters, “such as recognition of tall people’s week or, you know, some of the bills that we do down there, we’ll get some substantial things done just like they do in other states in much less time.”

Dunleavy hasn’t introduced a bill to celebrate tall people’s week. But if he did, it would have about as much chance as his 90 percent tax cut for 30 years.