State of the State address hits familiar themes

Governor Parnell addresses the Alaska House and Senate.
Governor Parnell addresses the Alaska House and Senate. (Image courtesy Gavel Alaska/360 North)

Gov. Sean Parnell hit many familiar themes during last night’s State of the State address in Juneau.

He advocated for a comprehensive crime bill that would levy harsher penalties on sexual predators, and set a goal of improving Alaska’s high school graduation rate from 70 percent to 90 percent.

But the bulk of his speech focused on increasing energy production.

“Alaska’s North Slope has billions of proven barrels, and billions more waiting to be discovered. What we do not have is a tax system that attracts new investment for greater Alaska oil production,” Parnell said.

He proposed to change that by setting the tax rate on oil at 25 percent and eliminating a requirement that oil companies pay higher tax rates as the price of a barrel of oil goes up. He argued that doing so would simplify the tax code and encourage oil companies to invest in Alaska instead of the Lower 48.

Democratic minority leaders expressed skepticism that Parnell’s energy overhaul would increase oil production. In the minority response to the governor’s speech, Anchorage Sen. Johnny Ellis characterized the tax cut as a “giveaway,” a charge that was levied against the governor’s last oil tax plan.

“If Alaska stops getting its fair share for our oil resources it will bust our budget, and that means politicians will look to sales and income taxes and a potential raid on your PFD. That’s not scare tactics, that’s what’s coming,” Ellis said.

This is the governor’s third attempt to get major oil tax changes through the legislature.  He introduced his latest energy  legislation just prior to Wednesday’s annual State of the State speech to the Alaska Legislature at the capitol in Juneau, and to Alaskans, via statewide television and radio.

In his speech, he also announced new benchmarks for the construction of an all-Alaska natural gas pipeline, called the Alaska Pipeline Project.

Parnell has set of a deadline of February 15 for private parties involved in the project to give their specifications for a pipeline.

“Let me be clear: That means describing and detailing the project and pipeline specifications. More specifically, it means telling us the size of the pipe and the daily volume of gas. It means telling us the location of the gas treatment plant, and detailing the number of compressor stations to move the gas along,” he said.

The governor said he wants to ensure that Alaska’s natural gas goes to Alaskans first.

Watch the full address


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