Legislators Expect Bill to Lower State Oil Taxes Next Session

Among the issues legislators anticipate dealing with during next year’s session is a revived effort by the Parnell Administration to lower the state’s taxes on oil production. The House passed House Bill 110 that lowered taxes last year. But the Senate refused to advance it until the administration and the oil industry provided more information on the taxes’ effect on production and employment. The Senate this week contracted for a study to get some of that information – particularly to determine who is working in the industry, what they are doing, and if they are Alaskans. Jim Calvin is president of the McDowell Group Consultants – the company that will do the study. He says the job is to assemble a look at all the information available on the labor force for the state’s oil industry.

Much of the data the study will need is confidential, and some will have to come from private companies and will require voluntary cooperation. Calvin says a complete labor picture for the industry includes such support activities as camp services, transportation and security. He says the work force also includes professional services that take part in North Slope oil fields.

The McDowell Group has extensive experience in oil industry research in the past – a fact recognized by Anchorage Republican Representative Mike Hawker. Hawker was skeptical of the study when it was first proposed, but says he now anticipates a valuable return from McDowell. However, Hawker cautions, the employment study will not address the issue of oil production – and that is the heart of the tax reduction case.

The final report is due to the Senate Finance Committee on December first for use during next year’s session.

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