Empire editorial: Oil tax bill a success

Posted: Sunday, November 18, 2007

A big thumbs-up to Gov. Sarah Palin and the Alaska Legislature not only for passage of a new oil taxation bill on the last day of a 30-day special session Friday, but for the manner in which the session was handled from the get-go.

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Last Tuesday it looked as though the bill that will ultimately bring in an anticipated $1.5 billion in additional annual tax monies was headed for disaster. But, reason prevailed in the final three days of the session and work that had been expected to last until Friday's midnight deadline was done by late afternoon.

First and foremost, the Legislature did the work its members came to Juneau to do one month ago. Passage of last year's Petroleum Profits Tax has since been marred by scandal and corruption with the subsequent indictment and conviction on federal charges of three former legislators, and more trials are yet to come. Sliced or diced in any fashion, PPT had to be thrown out and reworked.

The tax plan had its detractors in both houses of the Legislature and within the oil industry, but it passed by a 2-1 margin in the House and the Senate even among concerns that moving the tax from 22.5 percent to 25 percent of oil profits may stifle oil companies' long-term investment in the state. Several legislators said the move was a risk the state simply had to take, and they're right.

Aside from the tax bill itself, there were some notable highlights about this special session, among them:

• Palin called the session and got the revamped tax out of the way before the upcoming 2008 regular session, which next year will be narrowed to 90 days from 120 days. Next year's session needs to be devoted to other important work that must be done and not devoted to the oil-tax plan as the cornerstone issue. Palin's reminder to legislators was helpful: She told them if time ran out on new legislation at Friday's deadline, they'd be called back for another special session just after Thanksgiving.

• Cooperation ultimately resulted from the session, even if in the final three days. A month ago, few would have thought a new tax plan would pass by the margin it did in both houses. Add to that the fact that this session was in no way rancorous and, given what was at stake for the state of Alaska and for the oil companies, it certainly could have been.

• Legislators showed resolve when they said they were willing to roll the dice in order to protect the interests of Alaskans rather than the oil companies that are enjoying record profits that come with record oil prices.

• It was good to see that this session was held in Juneau after talk in August that it needed to be "elsewhere along the road system" so as to provide greater access to more Alaskans. In fact, this session went not only as well as anyone could have expected, but much better.

Palin and lawmakers alike needn't rest after the successful resolution of this session. Thirty fewer days in which to conduct the state's work next year will require considerable planning and forethought, and with that could come the most fruitful legislative session in a decade or more.

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