Ahead of a floor session in which the Alaska Senate took up consideration of an oil tax reform proposal Tuesday, Republican Gov. Sean Parnell sent out an “action alert” email urging constituents to call their state senator and ask them to vote in favor of the bill.
Senate Bill 21 was introduced at Parnell’s request in January, during the first week of this year’s legislative session. The proposal reduces the effective tax rate at most oil prices and flattens the percentage the state takes in oil production taxes at different price levels. It is the third attempt by Parnell to reform Alaska’s oil tax system.
“Senate Bill 21 is fair to Alaskans, it encourages new production, it’s simple and restores balance to our tax system, and it will make Alaska competitive,” Parnell’s email read in part.
Senate Democrats countered Parnell’s email with one of their own, reiterating plans to introduce amendments on the Senate floor to “prevent Alaska from falling off the fiscal cliff by passing a version of Senate Bill 21 that will lead inevitably to massive deficits, with no commitments from the oil industry to raise production levels or increase Alaska hire.”
Senate Democrats, as well as some Republicans, say that the bill would give up too much potential tax revenue from the state’s oil.
Parnell and other proponents of the legislation argue that the proposed reform is necessary to bring Alaska’s oil tax rate more in line with that of Alberta, North Dakota, Texas and other major oil producers.