Senator urges oil tax reform, but pans governor's plan

Sitka's Bert Stedman says misinformation delaying action
Sen. Bert Stedman, R-Sitka, speaks to the Juneau Chamber of Commerce during their luncheon at the Hangar on the Wharf's ballroom on Thursday.

Alaska’s ACES oil tax system needs some reforms, but misinformation provided by tax cut advocates is hampering the debate, Sen. Bert Stedman, R-Sitka, told the Juneau Chamber of Commerce Thursday.


The House of Representatives last year passed a dramatic reduction in taxes for the state’s big oil producers, ConocoPhillips, BP and Exxon Mobil, with House Bill 110.

But when that bill reached the Senate, some of the key justifications for the decrease proved to be false, and in some cases “preposterous,” he said.

Among the most egregious claims, Stedman said, were fears of jobs being driven out of Alaska, and to North Dakota.

That was part of an advertising campaign by the Alaska Support Industry Alliance, made up of companies that contract with the big three producers. Job loss claims were also made frequently in the House as it passed the bill onto the Senate.

Stedman said the Senate did a study and confirmed information from the Alaska Department of Labor & Workforce Development that stated employment was up, camps were full and bunkhouses were full.

The job loss claims were “pure hogwash,” he said.

Similar claims that the state’s marginal tax rates are the highest in the world were disproven by consultants the Legislature hired.

He said Revenue commissioner’s statement the state had a marginal tax rate of 90 percent when it had an effective tax rate of 40 percent was “not as informative as it should be.”

Stedman was even harsher about claims the trans-Alaska pipeline system would shut down within a decade if Parnell’s HB 110 wasn’t passed.

That was the claim Stedman called “preposterous” and “scare tactics.”

The North Slope oil fields remain a rich and valuable basin, with billions of barrels of oil yet to be produced, he said.

“They are going to be harvesting hydrocarbons out of the Arctic probably well over another century,” he said.

Those false claims haven’t helped the oil tax reform effort, he said.

“I really don’t think a lot of that type of behavior, especially in a small state like Alaska,” he said.

Stedman said his goal is to determine “what’s wrong with ACES and how do we fix it?” he said.

Those who put misinformation out to the public simply delayed legislative action, he said.

Stedman said he supported tax changes that would get Alaska the investment it needs, but scoffed at Parnell’s goal of a producing a million barrels a day.

“It’s a good bumper sticker, but you are not going to get there,” he said.

Neither is Parnell’s HB 110, he said.

“His bill, quite frankly, is so far off the mark, so far from what our consultants have been telling us, it’s basically dead on arrival,” he said.

The Senate is instead working on its own bill, Senate Bill 192, now in the Senate Finance Committee Stedman co-chairs.

It is intended to spur new investment with a more realistic goal.

“We want to stop the decline curve,” he said.

That’s going to take more than the $5 billion some of the producers have spoken of investing if House Bill 110 passes, and may take investment of as much as $15 billion.

He said that ACES’ progressivity rate, where the state’s tax rate goes up at high oil prices, is too high and needs to be looked at.

At the same time, he said, the state appears to be giving away too much in tax credits, which may be costing the treasury hundreds of millions of dollars without much benefit to the state.

Both need to be reformed, Stedman said.

• Contact reporter Pat Forgey at 523-2250 or at


  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-586-3740
  • Newsroom Fax: 907-586-9097
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2230
  • View the Staff Directory
  • or Send feedback






Thu, 06/21/2018 - 17:22

Alaskans could face internet sales tax

Thu, 06/21/2018 - 09:19

Yukon rejects Alaska fiber link