Far apart politically and geographically, lawmakers talk oil and gas taxes

Rep. David Talerico, R-Anchorage, Sen. Cathy Giessel, R-Anchorage, and Sen. Bert Stedman, R-Sitka, listen to Democratic lawmakers in Anchorage. The two sides don’t agree on reducing the ability of oil companies to use losses to lower their taxes. (Photo by Andrew Kitchenman/KTOO)

The first substantial day of legislative meetings in 20 days occurred Wednesday, but the two majorities in the Legislature were far apart — and not just politically.

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Most senators met in Juneau for a floor session for the first time since the Legislature passed the budget June 22. But most House majority members were out of town.

Both bodies agree that the state should stop paying cash for oil tax credits. But the House also wants to reduce companies’ ability to use losses to lower their future taxes. The Senate wants to allow this to continue.

Anchorage Democratic Rep. Geran Tarr said tax reductions should be stopped along with cash credits.

“The reason our cash credit system is not working right now is because we can’t afford it,” Tarr said. “We think it’s an unreasonable move to put in place a system that we also cannot afford going forward.”

While both sides offered up what they described as compromises on House Bill 111, the oil and gas tax legislation, neither appeared ready to move on the issue of allowing companies to use losses to reduce taxes.

Anchorage Republican Sen. Cathy Giessel said the two sides should move forward with what they agree on: eliminating cash credits. She said using losses to offset taxes is important to attract new oil and gas companies to the state.

“We’re certainly willing to look at simplifying [the tax system],” Giessel said. “It would help our Tax Division. It would help citizens. It would help legislators, if it were a simpler system. But that’s not something that happens at 3 o’clock on a Wednesday afternoon four days before a special session ends.”

Senators said they returned to Juneau to follow legislative rules that allow them to consider the oil tax bill. But House members said they didn’t want to waste money on travel if the two sides can’t reach an agreement.

The special session must end by Saturday.

Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at akitchenman@alaskapublic.org.

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