Parnell: Tax reform must include existing fields

Gov. Sean Parnell speaks to the Juneau Chamber of Commerce during a luncheon at the Baranof Hotel on Thursday.

Gov. Sean Parnell opened his speech to the Chamber of Commerce with a positive take on the Legislature’s special session.


“It looks like we have issues narrowed down to just a few,” Parnell said.

But more importantly than the special session, Parnell said, “it’s spring time.”

And with spring come visitors to the state. And more of them, Parnell said, thanks to efforts to fully fund tourism marketing. Parnell has also been praised by the cruise industry for changes made to Alaska’s cruise ship head tax.

The governor described an initiative he said his administration has worked on for three years, a micro loan bill that passed.

“It provides critical access to capital for entrepreneurs to start up businesses and also to take care of some inventory needs,” Parnell said. “Say, if you want to buy crab in the winter and hold it for a while.” The bill opens opportunities when traditional banks and credit unions may not offer services, he said.

Parnell gave credit to Rep. Cathy Munoz for successfully shepherding her municipalities tax incentives bill through the Legislature.

That bill allows municipalities a lot more flexibility in offering tax incentives for land development in regards to housing.

“That work that she did will be a big help to Juneau in making more housing available here. Good job to Cathy on that great effort”

For those interested in a drive out to Cascade Point, Parnell said the three-mile stretch of highway is scheduled to open to the public in July. Paving is set for next year.

“Don’t call my office if it doesn’t happen, call DOT,” Parnell said.

Parnell was asked if he supported a road and power line to the Kensington mine.

“I’m very supportive of that,” Parnell said. “And the road to Cascade Point is a step in the right direction. I’m tired of waiting for the federal government all the time, but I’m also looking for alternative means to get the job done.”

He said Juneau will benefit in many ways from state spending. Parnell highlighted work on the Aurora Harbor, reconstruction of Glacier Highway at Fritz Cove, University of Alaska Southeast dormitories, UAS mining workforce development, Dept. of Fish and Game building renovation and money for the State Library and Museum project.

Parnell said the recent legislative session was an education session.

The most significant education work was the completion of the $400 million performance scholarship, Parnell said. The fund incentivizes rigorous study with rewards of scholarship money. Two-thirds of the money will go to performance scholarships and a third to Alaska Advantage grants.

“Which will give you, as business owners, better employees over time to compete better in this global economy,” Parnell said.

The state also made great strides in pubic safety, Parnell said.

“I want to say thanks again to Juneau for the Choose Respect march and for everybody who participated in that,” Parnell said. He said 124 communities participated in rallies in March.

Don’t underestimate the power you possess,” Parnell said.

Parnell praised Thunder Mountain Coach John Blasco.

“He has taken coaching to a new level,” Parnell said. When it became about more than just basketball techniques when it became about coaching boys to men. Inculcating or coaching the values that are important in life as well as in playing the game.”

“It’s not about winning,” Parnell said. “It is about winning well,” as seen with the Ted Stevens case, he said.

Parnell next did a bit of fortune telling.

He predicted his sex trafficking bill would pass that day or the next, and a little less than three hours later the Legislature passed his bill.

The world’s oldest profession, “kind of a nice way of talking about 14- and 13-year olds who are coerced and are dependent on their traffickers for money and for drugs they become hooked upon,” Parnell said.

The director of the Covenant House has called sex and human trafficking, ‘calculated torture,’ Parnell said. “I call it modern day slavery,” he said. “It is a serious felony offense.”

Talk turned to the contentious issue of oil taxes.

“Tax reductions lead to new production,” Parnell said of oil and gas taxes.

In March, oil production slipped below 600,000 barrels. “And with no production on the horizon,” Parnell said. “Are we going to settle for status quo decline?”

Parnell said he has “run into a bit of a headwind” trying to pass a version of his oil and gas tax bill, House Bill 110.

The House of Representatives passed a tax reform plan that Parnell called comprehensive.

“For existing fields and new fields,” Parnell said.

During the regular session the Senate passed tax reform for new fields, not for existing fields.

“That is the difference,” Parnell said.

However, by passing tax incentives, “the Senate finally admitted that tax policy influences business decision making,” Parnell said. “But that logic doesn’t apply to existing fields?”

Parnell said Exxon recently invested over $1 billion in the Point Thompson natural gas field. Though the field is not yet producing, “in the next couple years you will see billion of dollars going into that field,” Parnell said.

Delay in passing the enabling House Bill 9 “will set back Alaska gas line plans for one to two years,” Parnell said. The bill is needed to enable exchange of information between the competing natural gas pipeline proposals, he said, and to take the companies to open season in 2013, he said.

The proposals are similar, both are tidewater while one is large diameter pipe while the other is currently a smaller diameter.

Parnell said he would like to see an outcome where all the interested parties can be on a parallel path.

“Because they can be on a converging path,” Parnell said.

Parnell thanked the Juneau Chamber of Commerce for its gathering of business owners.

“We share an interest in insuring the economic opportunity in the state,” Parnell said. “Thank you for your part in growing the economy.”

• Contact reporter Russell Stigall at 523-2276 or at


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