Parnell Believes Senate Leaders Dragging Feet on Oil Tax Changes

Rosemarie Alexander, KTOO – Juneau

Governor Sean Parnell says Senate leaders are dragging their feet on oil tax changes he believes would spur future development and jobs.

In a news conference Tuesday morning, Parnell said he’s spoken and written to Senate committee chairmen with no confirmation they plan to take up the legislation.  The House Resources Committee has been holding hearings on the oil and gas production tax.

With the session approaching the half-way point, Parnell says the Senate should also be hearing the bill.  It would provide oil industry incentives and credits beyond those already in state law.

Parnell claims oil companies are leaving the state because of the tax regime.  He says the bill would create tens of thousands of new jobs over 30 years.

But in testimony last week before the House Resources committee, representatives from Exxon Mobil, BP and Conoco-Phillips said they could not guarantee greater investment in Alaska if oil taxes change.  They said such decisions are based on numerous variables – not just taxes.

Under Parnell’s proposal, the state could lose up to $2 billion a year in revenue.  But the governor says it’s important to look out 30 years.

Senate President Gary Stevens – a Republican – says many senators are skeptical of Parnell’s claims that oil companies would step up investment and exploration if the state were to expand its tax credits.

An oil and gas consultant to the Parnell administration recently told House members that it’s difficult to assess the impact of tax changes on the oil and gas industry, because the state requires companies to provide little data.  He noted the state already gives generous tax credits and other deductions, and allows producers to convert tax credits to cash.

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