![Alaska Gov. Sean Parnell addresses a rally for legislation that would cut oil production taxes on Wednesday at the Denaina Civic & Convention Center in Anchorage. The governor took aim at what he called "do nothing senators" skeptical of his tax legislation that would dial back progressively higher taxes as oil prices increase. Parnell says keeping the status quo will to lead to an empty trans-Alaska pipeline. The Associated Press](http://jun-cdn.com/sites/default/files/imagecache/superphoto/116521.4839347.jpg "Alaska Gov. Sean Parnell addresses a rally for legislation that would cut oil production taxes on Wednesday at the Denaina Civic & Convention Center in Anchorage. The governor took aim at what he called "do nothing senators" skeptical of his tax legislation that would dial back progressively higher taxes as oil prices increase. Parnell says keeping the status quo will to lead to an empty trans-Alaska pipeline. The Associated Press")
Gov. Sean Parnell’s proposed oil tax reduction took a big step with this week’s passage by the House Finance Committee, but bigger challenges remain.
The House Finance Committee’s 8-3 vote Tuesday, along caucus lines, passed Parnell’s House Bill 110 on to the full House of Representatives. It’s a package of tax breaks aimed at spurring oil development.
Rep. Les Gara, D-Anchorage, called the proposal “a wing, a hope and a prayer,” with no evidence it would accomplish anything.
Rep. Mike Hawker, R-Anchorage, led the fight for the bill, after his appointment as a member of the committee Monday.
No less passionate than Gara, Hawker described the rollback of the state’s ACES oil tax law, adopted in 2007 over his objections, as “an investment in a more sustained and robust economy in this state.”
During an hours-long Finance Committee meeting Hawker described the ACES oil tax variously as “government take,” “government skim,” and “government confiscation of wealth from the private sector.”
House Bill 110 makes several ACES of changes, with the largest being a reduction in tax “progressivity” the increase in tax rates at high profits. Also in the bill were additional tax credits, reduced penalties for underpayment of taxes, and other reforms designed to make Alaska a more profitable place for oil companies to do business.
Estimates for how much the bill will cost in lost revenue varied wildly, but often settled on around $2 billion a year at likely prices.
But Revenue Commissioner Bryan Butcher strenuously avoided committing himself to dollar amounts. One reason: The estimates hinge on how much oil is produced, and whether HB110 succeeds in bringing Alaska new development.
Rep. Mike Doogan, D-Anchorage, wasn’t comfortable with that.
“We’re being asked to pass a bill we don’t know what it is going to cost, don’t know what its effects will be.”
Before the final vote, the Republican-led committee voted down attempts from Democrats to amend the bill, all along the same caucus lines as the final vote.
One, from Doogan, would have put a “sunset clause” in the tax reductions, ending them in several years if they don’t produce desired results.
Rep. Anna Fairclough, R-Anchorage, said the clause itself could cause problems.
“I’m fearful that a sunset date would still create uncertainty for those who are sitting on the sidelines waiting to make an investment,” she said.
House Bill 110 can now head the House Floor for a vote by the full body as soon as this week.
The governor’s oil tax bill is facing a much more difficult path in the Alaska Senate, however, where it remains in the Senate Resources Committee, its first committee of referral.
“I don’t see that bill moving out of even Resources,” said Senate President Gary Stevens.
After resources, it would still have go through the Senate Finance Committee, and then face a floor vote, all of which Parnell is unlikely to win, he said.
• Contact reporter Pat Forgey at 586-4816 or Patrick.forgey@juneauempire.com.
Comments (10)
Add commentAnd so goes the screwing of
And so goes the screwing of the Alaskan public
And everyone
And everyone thought Sara Palin was an idiot, at least she listened to her constituents.
Tax givaway spin
-During an hours-long Finance Committee meeting Hawker described the ACES oil tax variously as “government take,” “government skim,” and “government confiscation of wealth from the private sector.”-
And here I thought it was OUR oil, not private sector oil. It's not gvmt skim, it's royalities paid to ALASKANS, for ALASKAN oil, that reside IN ALASKA. Don't like it? Please do leave! Tax credits and not further tax breaks is the responsible discussion. Otherwise we'll end up with more zero tax fields pumping for free. (oh, please do rid us of this pesky oil as you reap record profits every quarter Big Oil)
You want to see production? Create some real competition. Start up talks about a State run oil company that will drill and fill the pipeline without them. It's $100barrel and Big Oil LOVES the status quo. Of COURSE they'll ask for more tax breaks, that never hurts.
Poor lil oil companies and their taxes on record profits. Give me a freakin break!!!!!
My Take
ACES is great, and doing EXACTLY what it was meant to do. If we're going to be implementing any new tax breaks, they should be skewed toward persuading the smaller oil companies to put their resources in to Alaska, and giving them a chance to grow bigger. For the most part, big oil doesn't invest in exploration except when they're subsidized to the point of no risk to do it. They would much rather buy their elephants from the smaller companies who make a successful strike and then can't fully utilize the potential of what they've found. Helping those smaller independent companies work what they find would do way more for our development than simply handing concessions to the big boys.
And quit with the Palin bashing. She was a great governor before she got stars in her eyes. Yes, she was petty and devious but then, like the rest of us, she's human. She was doing her best those first two years, and it was a damn sight better than could be expected from most politicians.
On the horizon
I'm sure on the horizon is the announcement regarding how Alaska is going to be out of revenue and will need to re-institute the personal income tax. When that happens I hope it leads to the wake-up call to all the Alaskans who have supported these ridiculous tax reductions. Maybe even to the point where they will see the fact regarding how the conservative party in Juneau can waste more than and any other party in Alaskan history. Come to think of it I believe the conservative party has been in power since Statehood. Whose created this mess: our conservatives.
So lets just completely eliminate all taxes on oil and be done with this slowly running out of revenue and get it over with. Perhaps the the legislature needs to actually deal with the inevitable sooner than latter.
Government skim?
“government confiscation of wealth from the private sector.”
Holy Cow! And here I thought ALASKA owned the resource! Good post Akromper - I agree 100% and can't really add anything to what you said - it was perfect!
From the AP story
"Parnell spoke at a banquet room at the Dena'ina Civic and Convention Center to nearly 1,000 people who paid $35 apiece for the luncheon sponsored by the Alaska State Chamber of Commerce, the Alaska Oil and Gas Association, the Resource Development Council and a dozen other pro-development business groups. At each table were orange cards giving participants an opportunity to write short, personal messages in support of Parnell's measure. Rally organizers plan to bundle the comments and forward them to lawmakers."
First a question: $35 x 1,000 people = $35,000. Where did this money go?
Second a statement - perhaps those of us who are against this (and there are many) should be forwarding our own "orange cards" to lawmakers expressing our disgust at this bill.....
and finally - new governor, please.....
I think palin is the most
I think palin is the most embarrasing thingto come out of Alaska. And I'm including that on the 1500 convicted criminals we send to Arizona. I'll continue to "bash" her as long as she continues to make me feel ashamed she's from this state.
This is the worst bill I've ever seen in my 40 years in Alaska!
The extremely high price of oil is all the incentive that oil companies should need. Are gold miners begging for a tax break? No, they are scrambling to take advantage of the very high price of gold.
Parnell's Tax Giveaway
Under Parnell's plan, even with a 25% increase in the volume of oil in the pipeline (another 150,000 barrels a day) Alaska still LOSES a billion dollars a year from what we now receive. Parnell described his opposition yesterday in Anchorage as the "do-nothing Senate." I far prefer the Senate DO nothing on this outright oil tax giveaway rather than KNOW nothing and vote for such a fiscally bankrupt idea.