In previous pieces, many in the media -- KTVA, APRN, the Kenai's KSRM are three examples that come quickly to mind -- had bought hook, line and sinker claims by some companies that they were owed, "this year" (APRN) the full amount of any outstanding credits and that the state was "delinquent" (KSRM) as a result of their failure to pay them. See "Now, Alaska Public Media spreads 'fake news.'" https://goo.gl/pXTQf7.
Yesterday's ADN piece finally balances that out, pairing those claims against the reality of what state law provides.
"But some say the companies should have known the potential consequences before they signed up for the state's generous tax credit program. State law shows they risked a slowdown in payments if oil prices crashed and the state's economy tanked. And that's exactly what happened."To be sure, the article continues to include what we have called elsewhere the "whines" by some companies and their trade group that they are owed the full amount of the credits, now. See "But you promissssssed," https://goo.gl/mZMH8U.
But at least the article reveals those to be whines, rather than solid claims based in fact or law. The admission that caught our eye most in that regard was this:
"Regardless of the 'fine print,' companies secured financing and made investments on the expectation of timely payment, said [Carl] Giesler, with Cook Inlet Energy."As we have made clear on these pages and in the article as well, when companies deal with the government (or, in fact, each other) it's all about the "fine print." That's what contracts and, certainly, financing are founded on. Just like companies shouldn't expect relief when dealing with others if they (allegedly) overlook the "fine print," they shouldn't expect relief from Alaska.
The "fine print" is there to protect the parties. The state included limitations on its payment obligations to protect it during periods of low oil prices or production. The companies accepted the risk at the time they entered the program. Rather than live by the terms to which they agreed, however, now that the risks have materialized they are attempting to escape them (and leave the state less well off as a result) by claiming that they "expected" something different.
The state isn't responsible for whatever "expectations" or "impressions" the companies now claim. It is only responsible for the terms of the agreements it entered into. And those terms provide that the state is obligated to put only a given amount of money into the program each year.
As for the claims that the companies were misled into agreeing to those terms by contrary promises, John Hendrix, the governor's chief oil and gas adviser and a former industry executive, deals with those best:
"Hendrix ... said he's skeptical state officials in the past oversold the tax-credit program. He said no official could have guaranteed the state would always have the cash to pay the full tax-credit bill each year, he said. 'Show me the quotes that validate that,' he said."Those now claiming that the state is "obligated" to do so have produced none (other than the two-page, cartoon pamphlet mentioned in the article which itself referenced the statutes) and neither now-Senator Dan Sullivan nor Joe Balash (now-Chief of Staff to Senator Sullivan), the two DNR Commissioners during the period the companies claim such statements were made, have stepped forward with any corroboration of the companies' claims.
Rather, all that the companies are claiming was what, allegedly, was in their minds at the time.
That's not persuasive to us, and indeed, shouldn't be persuasive to anyone, especially at a time that the state is ignoring its actual statutory obligations to others. "The Alaska Legislature tosses out the Rule of Law," https://goo.gl/Fb7iv7.
If the state comes current on those, maybe there is room to start talking about making additional, extra-statutory payments to others. Until then, no one should be.
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