By Dave Donaldson
The oil tax reform bill that passed the House last week is not getting any new traction now that it’s in the Senate. The plan offers more than a billion dollars in tax breaks to industry with a hope – not a requirement – that oil companies will increase investments in Alaska that would lead to more production. Senate leaders have opposed the plan since it was first introduced in January.
President Gary Stevens yesterday said supporters of the governor’s plan are looking for votes – with an unusual approach.
We’ve heard from the other body as well as the governor, if you go ahead and pass the governor’s bill and if it’s not working you change it. It’s really hard to change a tax structure and it would be difficult down the road next year or the following year, to go in a make some changes if things are not working.
He also says that legislators have been frequently told that oil and gas producers want stability. Stevens says the supporters’ argument “flies in the face” of that wisdom. He dismisses the idea of making two changes to a tax regime with which Senators are already satisfied.
Finance Co-Chairman Bert Stedman of Sitka says before advancing the tax bill, he needs a lot more information concerning the state’s competitive position and world oil projections.
It is dangerous for the state of Alaska to continually change our fiscal structure every year. I’m more concerned about getting it right than changing it this year, then changing it next year. And I think we need to push forth a proposal that is inclusive of either one bill or at least one analytical process.
The governor’s oil tax bill went to the Senate’s Labor and Commerce Committee where staff says they intend to hear the tax plan’s impact on the state’s labor force. That hearing is scheduled for Friday. From there it will have to go through the Resources Committee and, then the Finance Committee.