Gov. Bill Walker is delaying payment of $200 million worth of oil tax credits. The veto is the most significant change the governor made to the state budget.
Signing his first budget, Walker was, for the most part, light with the red pen. The capital budget the Legislature sent him had already been cut from about $600 million to a little more than $100 million, so there were few projects to target. And after two special sessions and a compromise between Republicans and Democrats, Walker decided to mostly leave the worked-over operating budget alone.
The only big adjustment Walker made was on oil tax credits. Walker put off payment of $200 million in oil tax credits to send a message.
“We have to have that discussion about what can we afford — what can we afford in the way of paying companies to go out and do exploration work in our state. That’s really what it comes down to,” Walker said at a Wednesday press conference.
Walker added that the action was a way of sharing the pain among Alaskan people and interests at a time when the state is looking at years of budget deficits.
The payment delay only affects companies who are exploring for oil — not actually producing it. The state will still issue about half a billion in credits to companies that are extracting the resource.
And as far as the delay goes, it’s just that. All of the credits will still have to be paid out eventually, even if they don’t count against this year’s budget. Walker said there isn’t a legal avenue for striking them from the books.
“I’m not aware of any,” said Walker. “We haven’t looked for any, and that’s not the goal.”
The payment of oil tax credits was a major part of Democrats’ agenda this legislative session. The minority party regularly offered amendments that would have cut them from the budget, but all of them were unsuccessful.
Walker told reporters that his move on the budget should push the issue to the forefront when legislators reconvene.
“As we see this growing to the point that it could potentially be the largest expenditure we have in the state — these payments for exploration — that we have to get a handle on,” said Walker.
Including the oil credit delay, the budget Walker signed spends just under $5 billion in state dollars.