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Parnell: Tax reform must include existing fields

Posted: April 20, 2012 - 12:05am
Gov. Sean Parnell speaks to the Juneau Chamber of Commerce during a luncheon at the Baranof Hotel on Thursday.  Michael Penn/Juneau Empire
Michael Penn/Juneau Empire
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 [filtered word] 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 russell.stigall@juneauempire.com.

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Jo MacNamara
697
Points
Jo MacNamara 04/20/12 - 07:11 am
4
0

The road to Kensington

While I am opposed to public money serving private enterprises, I would support a road to Kensington simply because it puts us a few miles closer to Skagway. Kensington doesn't need a road. But, a road just makes things cheaper for them to ship materials. They're still making a profit. The road just makes them MORE profit. I wonder how much of that profit they will return to the community?

Regarding the Governor's oil tax giveaway, if production is down, but we still made $1 billion more than expected this year because of ACES, I really don't see a problem with decreased production. As such, I don't really see a need to lower taxes.

Also, whenever I read that $1 billion is going into one particular oil field, I have to wonder. I mean, how much does it cost to drill a hole, install a big pump and weld together some pipes? A few million, maybe. A couple hundred million, possibly. But $1 billion??? I'm not an expert, but that just sounds ridiculous.

Latitude58
14737
Points
Latitude58 04/20/12 - 07:22 am
11
1

Looks like...

Parnell's giving Munoz some political cover.

Obviously she's telling him that she's feeling the heat for kowtowing to his massive giveaway to the oil companies, and that she may have to backpedal.

And that's exactly right. She does need to backpedal. We don't need a representative who rubber stamps terrible legislation. If she can't stand independent of the party line, then we need to get someone from a different party...or from NO party.

chipthoma
238
Points
chipthoma 04/20/12 - 07:28 am
10
0

Captain Zero Confuses Leading and Cheerleading

This Giveaway Governor continues his assault on state tax policy by using simplistic rhymes:
"Tax reductions lead to new production."
If that was the case, the pipeline would be full after all the tax breaks and incentives of the last decade. Alaska is paying the companies plenty to develop N.Slope leases, but they demand more windfall profits from the state share.

Captain Zero is a shameless cheerleader for this giveaway effort. This is not respect for Alaskans who deserve the benefits of their resources - it is blatant pandering. The Senate should continue its hard questioning of the top Revenue shills and reject the oil company tax bill.

barnardj1
673
Points
barnardj1 04/20/12 - 08:17 am
6
0

The oil companies have been

The oil companies have been cheating alaskans since oil was discovered. The senate majority are the first ones in a long time who have even brought this up. Parnell and his clown college of commissioners are clearly in over their head. Applause for the senate for hanging together in the face of the oil and gas industry p.r. assault.

swimmergirl
4371
Points
swimmergirl 04/20/12 - 09:00 am
8
0

I just don't get it.....

I'm a new homeowner. My parents both were in business for themselves. I try to be smart about my finances.

I can think of NO situation - whether I'm getting bids for a new deck, in small business or large - where ANYONE in their right mind would say to a contractor or business partner, "here's $2 billion dollars. I'd really like to have xyz. I hope you give it to me, or make xyz and give me some of the leftovers, but I don't need anything in writing, to know how much it will cost you to buy the materials, or to know who you are going to hire or how or when or even if you are going to do the work. Just take the $2 billion, I trust that everything will be ok."

I just don't get it.

curmudgeon
324
Points
curmudgeon 04/20/12 - 09:22 am
5
1

Senate should hold the line

Every day the Senate holds the line is a day that the Koch Brothers superPACs are not dumping millions into attacking Senators who won't vote for Parnell's giveaway of OUR money.

You can expect them to spend megabucks this year trying to defeat Senators that won't kiss Big Oil's behind. I'll bet Dragon Lady Paulette and her Big Oil friends try to find a wingnut candidate to run against Dennis Egan and then spend more than you've ever seen spent in a Juneau race on attack ads.

This year's election will be vicious. Time to pass a Constitutional amendment that says corporations are not people with free speech rights, and that money is not speech.

This is what we get with the George Bush appointees to the Roberts Supreme KKKourt.

abnotey
237
Points
abnotey 04/20/12 - 09:53 am
5
1

a road and power line to

a road and power line to Kensington mine???

Who among us can even afford to take a drive all the way out to Cascade point with gas prices so high? This road extension is not for the public.
Here we are an oil producing state paying record high oil and gas prices while our public dollars are being used in ways to enrich the oil, gas, & mining industries....while they rape & pollute the hell out of our state.

Yes its still true, the Governor want’s some version of his $2 billion/year oil tax giveaway – one that allows companies to take those breaks outside to their shareholders and executives, and that doesn’t require additional investment in Alaska beyond what they had planned anyway...

Alaska needs a new Governor come 2014

jammer
0
Points
jammer 04/20/12 - 09:42 am
3
0

Don't give away Alaska's oil

We simply cannot afford to give away this huge sum that Parnell is asking for: in return for nothing. The oil companies may say that it will lead to greater investment but they have made no legally binding commitments, and won't because they have no intention of changing their policies. Everyone needs to let their legislators know to stand firm. Please write, email or call your legislators to express your opinion. They are there to represent us not the oil companies. Also please sign my petition against giving this money away: http://signon.org/sign/dont-giveaway-alaskas-1.

abnotey
237
Points
abnotey 04/20/12 - 09:54 am
2
1

What is being done about all

What is being done about all of Alaskas pollution issues?

Our state now Ranks No. 1 in the Nation in Toxic Chemical Releases, it is a serious and growing problem for us and for future Alaskans that is being ignored by our Governor and Reps. but not by others.

"B.C. neighborhood protests foul air from Alaska cruise industry"

Read more here: http://www.adn.com/2012/04/19/2431336/bc-neighborhood-protests-foul.html...

glacierdogs
1401
Points
glacierdogs 04/20/12 - 11:37 am
2
5

Rants

I suppose these rants make the ranters feel better, and that may be the only benefit of this forum. For the rest of us, everything will be all right. The oil tax relief the governor wants will not pass, never could pass, and is merely the waste of time that most politics entail. Juneau has received the benefit in the capital budget (vetoes not expected) from having supported the governor. Beth and Cathy will be re-elected this year, and Governor Parnell will be re-elected in 2014. Alaska will overwhelmingly vote against Obama but the vote could be close in Juneau. Don Young will be re-elected but he will lose in Juneau.

What won't be all right is that petroleum production will continue to fall. Oil prices are overdue for a correction and that could bring all state cash reserves apart from the Permanent Fund to zero while liabilities continue to grow. Defense spending in Alaska will survive but many other federal transfers will diminish markedly. Southeast Alaska will continue to lose population. Ranters will continue to have no solutions.

Jo MacNamara
697
Points
Jo MacNamara 04/20/12 - 12:36 pm
8
0

@glacierdogs

Wow. Nice doom and gloom. Here's my solution:

Raise taxes on oil industries.

Demand they produce 20% more oil using their own money and if they don't produce, we yank their leases and give them to someone else.

And every time they ask for a decrease in taxes, we assess a "whining tax" of 2% of their gross revenues for the year, and stipulate that the percentage will double with each subsequent whine or request for decreased taxes.

Then watch 'em drill baby drill.

They will ALWAYS ask for reductions in taxes until Alaskans are paying THEM to drill our oil. There has to be a time when we finally say, "This is our oil. This is how much it will cost you to drill it. Non-negotiable. STFU."

That time is now.

ken dunker II
3339
Points
ken dunker II 04/20/12 - 12:55 pm
0
3

Now you've told me the ending!

Yes, glacierdogs, most of us know the ending of the movie. But it is entertaining to watch isn't it? I suppose I have too much time on my hands.
Reality will come at its own good speed and in its own good time and real solutions will present themselves because the 'options' will no longer be options and ranters will continue looking for that promised alternate ending.

Alaskastu
1791
Points
Alaskastu 04/20/12 - 01:06 pm
1
0

The dogs right. Unless

The dogs right. Unless politicians start working together. Which won't happen.

Side note, nice tag change abnotey. Same old over blown accusations. Read more into your precious links. Why a few years ago were we second to last for pollution for the nation? How did we jump from the bottom o the list to number one? Seriously, look into it and enlighten yourself. And you can keep yelling and screaming the sky is falling but this town supports our current mines.

chipthoma
238
Points
chipthoma 04/20/12 - 04:40 pm
5
0

Butcher Strikes Out At Legislature

The Butcher show with Senate Resources is a huge waste of time. The top Revenue shill is proposing that Alaska give Big Oil $170,000 per hour, $4 Million per day, forever, in the belief these billionaire bullies will become our best friends and play nicely in the sandbox. That belief is 100% delusional. Governor Giveaway's oil tax bill is dead-on-arrival.

adcme9
335
Points
adcme9 04/20/12 - 04:57 pm
0
0

Hey BP, try this....

Perhaps the oil companies think they can get a better deal in Argentina.

http://www.npr.org/2012/04/19/150959215/ignoring-critics-argentina-to-na...

abnotey
237
Points
abnotey 04/21/12 - 09:25 am
0
0

Akstu - sounds like you are

Akstu - sounds like you are part of the tall tails coming from the State, DEC, Parnell, etc.. Parnell and friends are out in force poo pooing the epa's TRI report. (Toxic Chemicals Released into the environment report)

A section of the TRI Report shows that In "2010" Alaska released over 19 million pounds of Toxins into the atmosphere.
Lead and mercury came in at over 300 million pounds. Do you know Alaska has 6 coal power plants and that currently over a million tons of coal is exported from Alaska to the Pacific Rim by Usibelli Coal Mine Inc. and that this accounts for around half of the coal mined by Usibelli, with the rest being consumed in the state?

You may not care about all the Toxic chemicals being released in our state but there are many Alaskans that do care.

In fact there is an effort right now by Alaskans to stop another coal mine from being permitted that is right next to Cook Inlet - the Chuitna Coal Mine, owners are a Delaware-based corporation that plan to export coal to Asian markets, including South Korea, Japan and Mainland China etc... AND all that coal pollution comes right back to our state in the form of Acid rain.... not to mention all the methane gas released into the atmosphere from coal mining.
Sean Parnell is pushing the Chuitna Coal Mine on Alaskans right now and this mine is really really bad for everyone except maybe a Delaware-based "Corporation".

Seems to me you need to do your own enlightening

Latitude58
14737
Points
Latitude58 04/20/12 - 08:30 pm
3
0

gdog

Your crystal ball needs some windex.

- Parnell's bill will crash and burn, no thanks to the House.
- Beth will certainly be reelected.
- Cathy's reelection is far from certain. You clearly are underestimating the fallout of her siding with Captain Zero.
- Captain Zero's reelection is also not certain. He's at least as corrupt as Frank Murkowski, and Alaskans can smell the stench.
- Agree on Obama - Alaskans will go with the white Obama with pretty hair.
- Agree on Young (sadly)
- Oil prices will continue to rise. Oil companies will continue to explore and pump in Alaska with no tax giveaway incentives. They will continue to post record profits.

seniorfrog52@gmail.com
28
Points
seniorfrog52@gmail.com 04/21/12 - 06:52 am
0
0

THE BEST PIRATE I'VE EVER SEEN

SCUTTLE PLAN P
Don't watch 1.2 - 1.4 Billion $$ sail over the horizon.

http://www.youtube.com/watch?v=CAt5JB96Cdk

kiki
1373
Points
kiki 04/21/12 - 07:49 am
4
0

Just think

of the number of wind farms, hydro & geothermal projects we could undertake with just a fraction of the 2 billion per year we are getting ready to hand the oil companies. Another opportunity squandered.

timeinmemorial
232
Points
timeinmemorial 04/21/12 - 10:59 am
0
0

Governors full Chamber speech on video

The speech covered SE energy development and hydropower not fully addressed in the Empire article.
http://vimeo.com/40696201

kiki
1373
Points
kiki 04/21/12 - 09:40 pm
1
0

@timeinmemorial

Thanks for that link, I watched the video. The Gov covered SE energy dev and hydropower? In what way? He didnt broach the subject at all in his speech, the reason it was even addressed was because someone in the audience asked a question about it although the audio was so bad one couldnt hear what the question was. All the Gov said was he supports it, he had no answers and would have to punt that over to AEA. He blew it off. Alaska has the resources to do so much with hydro, wind, geothermal, biomass but our Gov is putting all our eggs in the basket of big oil. Even Stevens had a better vision of alternative energy which resulted in the turbines at Perryville. Parnell was introduced at the Chamber meeting as "bold and quiet". One of the questions from the audience was more concerned with getting hydro-power to Kensington than to residents of other SE towns. The Gov said he has run into a bit of a "headwind" with his tax break proposal which got a good laugh from the audience. Im trying to figure out why the Chamber audience thinks asking valid questions of a crazy tax break proposal with no guarantees written into it is funny but I guess that shows where Chamber of Commerce stands.

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