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Gov. Parnell Outlines Priorities In State Of The State Address

Gov. Sean Parnell’s State of the State address last night underscored the priorities he’s been pushing throughout his administration. He called for a comprehensive crime bill that would levy harsher penalties on sexual predators, and he set a goal of improving Alaska’s high school graduation rate from 70 percent to 90 percent.

The bulk of the Governor’s speech focused on energy.

“Alaska’s North Slope has billions of proven barrels, and billions more waiting to be discovered,” Parnell said. “What we do not have is a tax system that attracts new investment for greater Alaska oil production.”

Parnell’s plan to change that is to set the tax rate on oil at 25 percent, and get rid of progressivity. He argued that doing so would simplify the tax code and encourage oil companies to invest in Alaska instead of elsewhere.

On the natural gas pipeline front, the governor said he has set new benchmarks for the project.  Parnell has set a deadline of Feb. 15 for private parties involved in the project to get specific.

“Let me be clear: That means describing and detailing the project and pipeline specifications,” Parnell said. “More specifically, it means telling us the size of the pipe and the daily volume of gas.”

“It means telling us the location of the gas treatment plant, and detailing the number of compressor stations to move the gas along.”

Democratic minority leaders say they doubt the oil tax changes would increase production. Senator Johnny Ellis characterized them as a “giveaway.”

“If Alaska stops getting its fair share for our oil resources it will bust our budget, and that means politicians will look to sales and income taxes and a potential raid on your PFD.,” Ellis said. “That’s not scare tactics, that’s what’s coming, if this bill passes.”

This is the governor’s third attempt to get major oil tax changes through the legislature.

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