Skip to comments.Legislature agrees to cut Alaska oil-production taxes
Posted on 04/15/2013 6:59:09 AM PDT by thackney
The Alaska Senate on Sunday afternoon approved the oil-tax bill that passed the House 13 hours before, sending to Gov. Sean Parnell the measure he had sought to save billions of dollars for Alaska's leading industry.
The Senate vote was 12-8 to concur with the revised bill that the House approved 24-15 just before 2 a.m. Sunday morning (on reconsideration, three Republicans switched to support the bill). The Senate vote came past the midway point of the 90th day of the 90-day session.
Parnell said that Alaska's current tax regime, which he backed as lieutenant governor in 2007 when it was pushed by Gov. Sarah Palin, is broken. It is taking so much money from industry, he said, that producers have been investing elsewhere, explaining the decline in oil production here. His bill, modified but not changed drastically in either the House or Senate, effectively wipes out Palin's tax policy, Alaska's Clear and Equitable Share, or ACES.
The new bill ends ACES big progressive tax steps, where tax rates increase as the price of oil rises. Parnell and supporters said the progressive tax was punitive toward industry. ACES supporters agreed that the tax took too much money at high oil prices, but the remedy was to lower the rate -- not toss it.
Under ACES and with sustained high oil prices that were not predicted in 2007, Alaska's treasury has swelled. The state cruised through the 2008 recession that devastated swaths of the Lower 48. Despite big budgets, Alaska now has some $17 billion in savings, not counting the Permanent Fund.
But the tax cuts mean those savings accounts will likely need to be tapped even if budgets remain flat, according to the predictions of Parnell's own revenue officials.
(Excerpt) Read more at adn.com ...