JUNEAU — A Sitka senator proposed adjustments to Alaska’s oil tax system Friday that he said are aimed at making it fairer to the state.
Republican Sen. Bert Stedman said his bill, SB192, is aimed at the already-producing legacy fields, long the mainstay of Alaska’s oil industry.
The bill would keep the base tax rate at 35 percent but would adjust the sliding scale, per-barrel credit for those fields. Beginning in 2015, the highest credit would be $4 a barrel when the average gross value at the point of production was less than $80 a barrel. It would decrease to zero when the average gross value at the point of production was at least $150 a barrel. The highest credit on the sliding scale under the current system starts at $8 a barrel.
Stedman’s bill also would raise the minimum tax.
The bill does not get into other aspects of the current tax structure, such as credits provided for new oil.
Stedman said he worries about the impact on the treasury under the new tax structure approved by lawmakers last year. He said it gives up too much money. But he said Alaska was at a competitive disadvantage with the old system, which took more when prices were higher.
Voters in August will decide whether to keep the tax structure or repeal it. Stedman said his intent in proposing his bill was not to do something that would remove the referendum from the ballot. “It was to come up with a fiscal structure that I thought treated the citizens of the state fairly in valuing their hydrocarbon. That in turn then would lower the impetus for them to vote for the repeal,” he said.
Stedman signed the petition to get the referendum on the ballot and, as things stand, said he would vote for the repeal. But he said he also does not support the old tax structure, which the state would revert to if the referendum passed.
In a Senate floor speech, he said there are risks if the referendum passes, including in trying to maintain momentum on a gas line project. He said there also are risks if it falls, including leaving a lot of money on the table at a time when lawmakers have to confront budget cuts.
He said his proposal would “put the state in a position to basically split that difference,” and take a lot of that risk out of both sides of the issue while allowing the state to remain in a competitive position.
The bill’s chances seem quite long in a political year in which the governor and many legislators are up for re-election. Gov. Sean Parnell championed passage of the current tax structure.
Stedman had been part of a bipartisan majority in the Senate and was a leader of Senate efforts to try to rewrite Alaska’s oil tax structure in the lead-up to the 2012 elections, in which Republicans seized control of the chamber. While he is a member of the GOP-led majority, he no longer serves on the Senate Finance Committee.
Also Friday, minority House and Senate Democrats announced plans for a news conference Monday to discuss an oil tax proposal of their own intended to serve as an alternative should the referendum be successful.