House Debates Governor’s Oil Tax Proposal

Dave Donaldson, APRN – Juneau

Thursday, the House opened debate on a tax proposal Governor Sean Parnell hopes will increase jobs and production in the state’s oil fields.  Final debate is scheduled for tonight.

Members so far have rejected three amendments. With few exceptions voting was along strict caucus lines.  Anchorage Democrat Les Gara said all the minority amendments had one common goal – to get a return for the money the oil companies will get in lower taxes.   He said that the governor’s bill would provide $6 billion over the next five years in incentives for the industry – and it sets no requirements from the industry.

“You can either write a bill that is based on a hope, wing and a prayer that the oil companies will give the money back even though they’re allowed to take it out of state,” Gara said. “But writing a bill that says you can take all the money out of state if you want is not as smart as writing a bill that says you only get the tax breaks if you increase production, hire Alaskans,  put more oil in the pipeline.”

The version of the bill on the floor today is not exactly what the governor originally asked for in January, although changes made in the House Finance Committee did diminish the tax breaks the industry would receive.

In their proposed amendments so far, Democrats have wanted to set goals for the industry to meet; they want the companies to disclose what they would do with any tax credits they receive; and want guarantees that work would be done with the money the companies’ request.  Also among the proposals was an amendment that would have simply expired the governor’s changes in 2014.

Republicans objected.

Anchorage’s Anna Fairclough argued that a requirement to revisit the tax in three years would make Alaska less competitive.

“What the proposed HB 110 does is push Alaska to be more competitive in a global market,” Fairclough said. “It’s about giving certainty when people – Alaskans – go into corporate board rooms and have to compete for projects globally.”

“A 2014 sunset creates instability in a company being able to plan for their future.”

The bill will be put to a vote in Thursday night’s session.

Download Audio (MP3)