Democratic leader slams Murkowski for oil-tax bill delay

Republican House speaker says 5-day postponement won't hold up the process

Posted: Friday, February 17, 2006

The leading Alaska House Democrat on Thursday accused Gov. Frank Murkowski of caving to pressure from the state's largest oil companies a day after the Republican governor delayed introducing a bill to tax the companies' net profits.

House Minority Leader Ethan Berkowitz, who is running for governor in this year's election, said Thursday that Murkowski's delay reflects an unsteady hand at the state's helm.

"You can never appear to lick someone's boots, not when you're trying to lead people," Berkowitz said. "I think anytime you defer action you promise to make because somebody summoned you to do so, you're not going to the table as an equal."

The bill, if passed by the Legislature, would replace the state's production tax system with one based on net profits of oil companies doing business in Alaska, which would mean hundreds of millions more in taxes to the companies when oil prices are high.

The governor planned to file the bill on Thursday, but postponed its introduction until Tuesday. The delay came after the chief executives of BP, Exxon Mobil and ConocoPhillips all requested a meeting in Juneau.

The governor had settled on a tax rate for the new production at 25 percent of the oil companies' net profits, plus a 20 percent tax credit for whatever money they spend reinvesting in the state.

Berkowitz said he was concerned the tax rate would be lowered in the governor's bill after Murkowski meets with the oil companies. Their concerns should be aired in the legislative process when the bill is introduced, he said.

Hultberg said the rates in the governor's bill will rely on recommendations of his consultants and the meeting would give the company executives "a chance to express their views."

The three companies who requested the meeting have also been in negotiations with Murkowski's administration for the better part of two years on fiscal terms to build a North Slope natural gas pipeline, a $20 billion to $25 billion construction project long coveted by state leaders.

House Speaker John Harris, R-Valdez, said a delay of five days won't slow the public process of the tax bill.

"We were told by the governor that the administration will not change their approach, they will not change the bill at all, but they will give the producers the courtesy to fly up here and give them some time to talk," Harris said.

But Harris said if a bill is not introduced Tuesday, he will ask the House Resource Committee chairmen to take up a Democratic version of a net-profits tax bill introduced by Rep. Les Gara, D-Anchorage.

Gara's bill proposes a 30 percent tax rate on oil companies' profits with a 15 percent tax credit on reinvestment.

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