Parnell Explains Vision of Restructuring Oil Industry Taxation

Dave Donaldson, APRN – Juneau

Friday, Governor Parnell gave more details on how the state’s tax on the oil industry should be restructured – he wants to limit the tax rate oil producers would pay when prices are high – called the “progressivity” element of the tax.

Parnell has in recent weeks suggested changes to the ACES – for Alaska’s Clear and Equitable Share – oil tax regime that passed when he was Lieutenant Governor.  The tax has allowed the state to profit from the high price of oil in recent years.

Friday, before the Resource Development Council, he called for more input from oil companies and set tax revision as the top element of support the state can offer to increase oil development.

The governor’s staff says Parnell has not yet proposed a specific top limit to the tax that would meet the phrase “effectively capping progressivity.”   His press secretary says the idea stemmed from discussions with oil company representatives and others following tax revisions he made during this year’s legislative session.

Ethan Berkowitz, who’s running to replace Parnell in the governor’s office, says the tax limit is an admission that the ACES tax isn’t working.  He says the evidence has been available that the industry is in decline because of the tax – and that, he says, has put the state’s entire economy at risk.

Berkowitz proposed a new, more stable method of determining taxes based on production, not price of oil at the start of his campaign for the office.

Parnell, in today’s speech, called for industry and related companies to discuss the tax proposal in a public forum before the legislature.

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