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Alaska Editorial: Governor still has work to do on oil tax reform in the Senate

Posted: November 19, 2012 - 3:40am

This editorial first appeared in the Fairbanks Daily News-Miner:

The Daily News-Miner published 68 letters to the editor related to the oil tax debate and the Senate bipartisan coalition’s role in that debate between Oct. 1 and Nov. 4. The letters we published were the letters we received. (Few, if any, were rejected for not following guidelines.)

Of these letters, 55 backed the Senate coalition and/or opposed the governor’s oil tax cut efforts, with most characterizing the governor’s proposal as a “$2 billion giveaway.” Only eight local letter writers explicitly backed the tax cut and coalition.

Obviously, letters aren’t a systematic poll. Nevertheless, they can reflect the saliency of issues in the community. Based on the lopsided outpouring, one might have expected Fairbanks voters in Tuesday’s election to reject candidates sympathetic to the governor’s oil tax reform ideas.

However, the opposite occurred in the two high-profile Senate races. Democratic Sens. Joe Thomas and Joe Paskvan both lost to Republican opponents who were perceived to be more supportive of the governor’s approach, Sen. John Coghill and former Sen. Pete Kelly respectively. Results in House races were mixed but won’t change the Republican majority, which backed the governor during the previous session.

The Senate bipartisan coalition’s loss of Paskvan and Thomas led to creation Wednesday of a new Republican majority caucus, the members of which revealed themselves at a late afternoon news conference in Anchorage. The caucus includes the three men who Fairbanks voters chose to serve in the Senate: Coghill, Kelly and Click Bishop.

The Republican caucus has improved prospects for the governor’s oil tax ambitions. However, victory still is not certain.

For one thing, caucuses created after November elections occasionally have collapsed before the start of the legislative session in January. This one seems credible enough, but one never knows what sort of dealing might continue in closed meetings.

More importantly, though, the governor still faces a diverse group of legislators this coming session, some of whom remain on the fence and all of whom will come under intense pressure from various constituencies. The governor and his administration will need to justify an oil tax reform package to the satisfaction of a sufficient number of legislators and Alaskans. He hasn’t succeeded at that job during the past two years.

Even if the pure Republican majority leads the Senate, Parnell could find that some senators who he and the public consider allies might be more skeptical than he expects. For example, while Kelly has said he believes oil tax reform is essential and has criticized the way Paskvan handled the issue procedurally during the past legislative session, Kelly praised the substance of Paskvan’s approach during the Chamber of Commerce debate last month.

The relative depth and strength of that agreement could inject a new layer of complexity into the politics of oil taxation during the coming six months. The governor can’t take anything for granted at this point.

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