The debate over oil tax rates may have implications for the University of Alaska's budget, say industry representatives.

Conoco Phillips Vice President of External Affairs Jack Griffin, who completed a bachelor's degree in Natural Resource Management at UAF in 1982, said that if the Alaska legislature goes through with its plans to increase tax rates on oil producers, there will be a negative impact on institutions that benefit from oil profits via donations from the industry.

The university has received $22.8 million in contractually negotiated donations since 2000, including $4.78 million in 2005.

Griffin said Alaska's economy could be affected more broadly as well. "Everyone ought to be interested and perhaps concerned," Griffin said. "The industry projects employ thousands of people, including UAF engineering grads, and some, not all, of these projects will become uneconomic if taxes are raised."

Griffin said that tax hikes will cause oil companies to move more of their investment out of state. "We look all over the world, and there are places with higher tax rates, but it's usually cheaper to do business, or there are bigger fields, or less environmental regulations," he said. "When Alaska raises taxes it makes itself relatively less attractive, and for the university this could impact both charter funding and appropriations from Juneau."

Doug Reynolds, an associate professor of economics at UAF and the author of a book on gas line development issues, said that the perspective of the companies is skewed by self-interest. "They're arguing from their perspective," he said.

Reynolds agreed that the money from the oil industry is significant, but said that any loss would probably be mitigated by a bigger state contribution. "That money goes to a lot of things around here, including some professorships, and you could lose some of that," he said. "On the other hand, Alaska could gain an extra $500 million or $1 billion."

Jack Griffin said that according to an industry sponsored analysis, the proposed tax increase will eventually decrease investment in future projects by 20 percent and oil production by 2 percent, which will lead to a serious drop in revenue. "For the first five years the state comes out ahead, but after five years the drop in investment catches up," he said. "If taxes are higher, the state will collect more in the short term, but lose more later."

Reynolds said that he does not predict a drop in investment. "You can take any scenario you want and view it in the worst possible circumstances," he said. "But industry profits will be secure in Alaska, secure for a long time to come. They're not going anywhere."

Kate Ripley, the university's director of public relations, said that the university isn't planning for a drop in charter donations. "We're not doing any major planning based on that scenario playing out one way or the other," Ripley said. "A lot of things are up in the air right now. Like a lot of people, we're just waiting to see how it all plays out."

With current oil prices the industry is taking record profits, but Griffin said that oil prices would not necessarily stay as high as they are now. Griffin said that a reduction in investment, and in donations to Alaskan institutions, just makes sense if industry expenditure is higher. "We base our philanthropic giving on how much we produce, and with less to give we give less," he said.

He also acknowledged that the barrage of high-cost advertising in Alaskan media outlets may have turned off some Alaskans. "We just want to get people thinking and to acknowledge that there's a trade-off," he said.