Alaska legislative leaders are demanding Alaska Republican Gov. Mike Dunleavy address an “overall pattern of peculiarities” in the state’s collection of oil and gas tax that has left them uncertain whether the state is really getting all the revenue it’s due.
Senate President Gary Stevens and House Speaker Bryce Edgmon outlined their concerns in a letter to the governor over the Department of Revenue’s ongoing pattern of stonewalling legislators’ efforts to determine whether the state is collecting unpaid oil taxes or cutting sweetheart deals at the expense of the state treasury.
The letter specifically calls out suspicious behavior on the part of Department of Revenue Commissioner Adam Crum, who has ties to the oil and gas industry and is expected to be a Republican candidate for governor in 2026. It notes that Crum fired a high-ranking Department of Revenue official when the legislature began investigating the tax bills.
“The ongoing obstructions by the DOR must not be allowed to become precedent for future administrations,” said the letter. “We must reinforce, not erode, the norms of oversight and accountability that are vital to Alaska’s republican form of government. By impeding (the Legislature’s) ability to exercise fiscal oversight, evaluate the efficacy of revenue policies, and make informed decisions regarding the stewardship of billions in public funds derived from Alaska’s most critical natural resources.”
The letter, first reported by the ADN, requested that the governor sign Senate Bill 183 into law. The measure would strengthen the Legislature’s auditing powers, a function already outlined in the Alaska Constitution, by requiring the state to provide requested information.
Senate Bill 183 passed with near-unanimous bipartisan support, clearing the Legislature on a combined vote of 49-10, enough to overcome a potential veto by the governor. Sen. Elvi Gray-Jackson, the chair of the Legislative Budget and Audit Committee, sponsored the bill after years of butting heads with the administration.
“If executive branch agencies can pick and choose what information to provide or in what format, then they can intentionally or not obstruct the Legislature’s ability to perform independent oversight on behalf of the public, effectively hiding billions of dollars from public view,” she said during the Senate floor debate on the measure. “Frankly, this is action we should have taken some time ago.”
At the heart of the issue is Alaska’s oil and gas tax system, which is complex even by tax standards. It works on a net profits model, which allows companies to deduct expenses against their tax bill, and requires the state to conduct regular audits to ensure it’s collecting the money it’s due. It’s a years-long process that yields assessments covering underpaid taxes and interest, which can take several more years to resolve through appeals and settlements.
The scope and scale of those underpayments can be tremendous. The last time the state got a public look at those numbers was in 2018, right before Dunleavy took office, when the state reported that it had issued $1.3 billion in assessments – unpaid taxes and interest – covering the tax period from 2006 to 2011.
However, the fate of those assessments – whether they were paid, appealed, or, more troublingly, settled on terms favorable to the oil companies – remains unknown.
The Dunleavy administration has never issued an updated report, and when the Alaska Legislative Budget and Audit Committee ordered Legislative Auditor Kris Curtis to update the report in 2020, the state refused to provide usable information.
“Reluctance on behalf of the Department of Revenue to provide information from the audit perspective raises a lot of red flags,” she said. “I have concerns from an audit perspective of why, and I would like to help determine that. Not just for you, but for the public.”
Instead, legislators have had to track deposits to the state’s Constitutional Budget Reserve to gauge the outcome of the settlements. That, however, would suggest that the Dunleavy administration may have been settling the tax bills by less than 50 cents on the dollar, amounting to hundreds of millions of unpaid dollars. And that’s not to mention the tax years beyond the years covered in the last report, which would be 2012 and on.
As legislators face lean budget years, it’s money that could have gone a long way toward paying for schools or other critical infrastructure that has been lagging. However, they concede that there could be more pedestrian explanations for the drop-off in deposits, such as collapsing oil prices or higher operating expenses. Without the information, they cannot be certain.
“We’re dealing with hundreds of millions into the billions of dollars, this is not decimal dust,” said Sen. Bert Stedman, R-Sikta, at a Senate Rules Committee in late April. “(Settlement payments) appear to have precipitously dropped the last couple of years for whatever reason. That alone would warrant a review because it sticks out. It could very well be a function of price and expenditures, as well as how the internal business is performing or not. Without a review, it’s an open question, but it definitely sticks out.”
And not only does the stonewalling prevent legislators from knowing whether oil taxes have been collected, but it also has deprived them of information they say would be useful in understanding the oil tax system as they contemplate potential changes. Legislators have eyed reworking the state’s oil and gas tax regime as it faces massive budget deficits, but those efforts have also largely been stymied by the industry-friendly Dunleavy.
Tempers flared at a House Rules Committee meeting on SB 183, which Revenue Commissioner Crum refused to attend. Crum instead sent a representative, who insisted that producing the report would be too much work for the administration.
“I find it appalling — absolutely appalling — that our Commissioner of Revenue could not manage to be here,” said Rep. Louise Stutes, a Kodiak Republican who chairs the House Rules Committee, telling the Department of Revenue’s representative at the hearing that “I’m not buying your story. This is a huge red flag for me.”
She said either the state has the information and is trying to hide it, or doesn’t have the information and isn’t properly monitoring the state’s oil tax system. Both, she said, are troubling developments for the state.
Senate Bill 183 has been transmitted to the governor for consideration. He has until June 19 to sign it into law, veto it or allow it to become law without his signature.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Bluesky.
