Public Comments On Gov. Parnell’s Oil Tax Cut Proposal

The public got its first chance to comment on Gov. Sean Parnell’s proposal to cut taxes on oil companies on Tuesday, and most of the testimony broke along familiar lines.

Representatives from mining, timber, and trucking groups showed up at the Capitol in person, and they spoke before the Senate’s pipeline throughput committee first. They offered support for the governor’s bill, saying that it would discourage oil companies from leaving Alaska for states with lower tax rates.

Aves Thompson represents the Alaska Trucking Association.

”We’re not the tax experts. We don’t know how to do. But we do know that something is wrong. There is something out of balance that needs to be fixed. And it is our firm belief that it needs to be fixed now,” Thompson said.

Once the committee started taking testimony over the phone from legislative information offices across the state, opinion diversified. About half of those callers criticized the governor’s plan to do away with a windfall profits tax and overhaul the way credits are awarded.

One of those comments came from a voice that was very involved in last year’s oil tax debate. For two-and-a-half minutes, former legislator Joe Paskvan testified that oil companies could take advantage of the tax cut to ramp up production without reinvesting in new infrastructure and exploration – something he described as “super harvest mode.” He also suggested that the argument that the current tax structure is behind the drop in oil production is a red herring.

”The throughput decline started in 1989 and has nothing to do with tax policy,” Paskvan said.

Paskvan was one the senators who opposed Parnell’s previous attempts to lower taxes on oil companies, and he lost his seat in November.

The TAPS Throughput Committee is scheduled to hear more public testimony on Thursday.

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