Gov. Bill Walker said Friday that the state government must have a say in which oil and gas projects are eligible for tax incentives.
Walker said he’s concerned that the oil and gas tax overhaul being debated by the House doesn’t give the administration approval over incentives. He proposed adding this authority, but it wasn’t included in the current version of the oil and gas tax bill.
“It’s one of those things that just I think got out of hand,” Walker said in an interview. “And it was never intended to be, you know, a $700 million, $1 billion expenditure on something we have no say in. Can you imagine us … giving $700 million to any entity in Alaska and not having any say over what it is?”
Walker also pushed back against a different legislative proposal to draw money from Permanent Fund earnings to cover the state’s $4 billion deficit.
Sen. Anna MacKinnon, R-Eagle River, says she’d prefer the House approve drawing money from the Constitutional Budget Reserve. This requires three-quarters of the House to agree.
But MacKinnon said drawing from Permanent Fund earnings is the legislature’s last option if they can’t come to an agreement. This would take only a bare majority of both houses.
“The last option available to us should the minority not come together and support a three-quarter vote draw that’s necessary to access the Constitutional Budget Reserve … is to go after the earnings reserve to fund the budget,” MacKinnon said.
Walker stopped short of saying that he would veto a budget that draws on Permanent Fund earnings without a long-term fiscal plan. But he said he opposes such an approach.
“I’d be very troubled by that,” Walker said. “To their credit, (legislators) have certainly talked about that in the past as an option. And (it’s) not one that I would support at all. … We’re heading down a new path. We’ve never done that before, and I’m concerned about the precedent that that would potentially set.”
Walker said his budget proposal has the pieces the legislature needs to close the budget shortfall.
The House began debating amendments to the oil and gas bill – House Bill 247 – Friday.
