The Senate plans to take a fast, but completely fresh look at oil taxes when it begins work later this week on changes to the state’s tax regime. A new bill that will be used to set up the plan will be introduced Friday morning and is already scheduled for a hearing in the Resources Committee that afternoon.
Resources Co-Chair Joe Paskvan of Fairbanks, says the bill will not present a specific plan – but will leave the details open for public debate and decisions.
“Friday, I’m hoping to have the Department of Revenue spend its time defining what they perceive as the problem, hoping they will not address their solution to the problem, but use their time to define the problem so you don’t bury a problem in a solution,” Paskvan said.
Finance Co-chair Bert Stedman says the deliberations will hit high gear next week as Resource Members are invited to join the Finance Committee in joint, daylong meetings.
“On Monday and Tuesday in Finance we’re going to have Pedro Van Meurs spend two days morning and afternoon – about an hour and a half each session — to go over Alaska’s fiscal regime and where we fit in and how the arctic fits in around the globe,” Stedman said.
Pedro Van Meurs is an international expert on oil and gas economics who consults for governments putting together tax regimes. He has worked for former governors Tony Knowles and Frank Murkowski and presented material to legislators during the interim.
Stedman says that the state’s consultants and representatives from the oil companies tell him that the main issue that needs to come from any new bill is a realignment of what’s called the “progressivity” element. That’s a variable tax rate that pays the state more as the price of oil increases. He says the Finance Committee will deal with some of the finer fiscal points leading to a final version.
Senate President Gary Stevens says he expects to have the bill through both Senate committees in time to leave the House thirty days to deal with the measure before the statutory end of the session.