Senators strike back at Parnell’s oil tax bill claims

A day after he urged them to do so, supporters of Governor Sean Parnell’s plan to cut oil taxes took to the phone lines and showed up in person tonight (Tuesday) for a public hearing on a competing Senate proposal.

The Senate Majority coalition introduced its own tax reform measure this session, after work stalled on the governor’s bill, which cleared the House last year.

Senate Bill 192 is a work in progress, and leading Senators have discussed various options to lower the overall tax rate paid by producers. But most of those who testified last night, like Michael Jesperson of Anchorage, said the Senate bill doesn’t go far enough.

“I think you ought to scrap it, go back to House Bill 110, and give it a couple years to work, increase the production, take more money from the oil companies over the long term instead of the short term, and provide a future for my children,” Jesperson said. “What we do now doesn’t affect me too much, but it will affect my children and they’re much more important.”

Tonight’s public hearing – the first of two scheduled for SB 192 – came a day after the governor’s office, state Chamber of Commerce and Alaska Oil and Gas Association sent “Action Alert” emails to in-boxes across the state, urging residents to testify, and calling the Senate bill a “tax increase.”

Earlier Tuesday, members of the Senate’s bipartisan Majority fired back at that claim. Resources Committee Chairman and Fairbanks Democrat Joe Paskvan says the Department of Revenue’s projections for the latest version of the bill show it resulting in a tax decrease of about $250-million per year for oil companies.

“To say that it is a tax increase, I think casts considerable doubt on the Department of Revenue forecasts, and undermines the validity of the Department of Revenue forecasts,” Paskvan said.

Parnell’s email also says the Senate bill “does nothing to stem the decline of oil production.” The Governor says his tax cut proposal, House Bill 110, is the only measure to get promises of new investment from producers.

Paskvan says declining production can’t be blamed on the state’s tax regime.

“Where the Governor says ‘for more than two years, I’ve heard Alaskans talk about declining oil throughput,’ I think it’s important of the public to consider, that as part of Alaska’s history, there’s been a decline in throughput since 1989,” said Paskvan.

Senate President Gary Stevens – a Kodiak Republican – says the goal of SB 192 has always been to cut taxes, and to suggest otherwise is “deceptive.”

“It never was an intention, no one’s intention in the Senate ever to have a tax increase. So I hope we can put that issue to bed,” Stevens said.

A Parnell spokeswoman says the governor was referring to the original Senate bill in his “Action Alert” email, even though the latest version of the legislation had been out since last Friday. Senators argue the original bill kept the status quo, and thus did not represent a tax increase.

The Senate Resources Committee will hear more public comment on SB 192 tonight (Wednesday) at 6 p.m. The committee also has nearly 20 amendments to consider before passing the measure on to the Finance Committee for more scrutiny.

Oil and gas taxes make up about 90 percent of the state’s annual revenue.

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