The House Thursday night passed the governor’s controversial oil tax bill that is expected to make large reductions in state revenue. The plan’s trade off is the hope that the tax breaks to the oil industry will increase now-stagnant production on the North Slope.
Five members of the House majority voted against the measure that passed on a 22 to 16 vote after several hours of debate.
Among those Republicans voting against the bill was Majority Leader Alan Austerman of Kodiak. He said he agreed with the need for lowering oil taxes, but he couldn’t support the governor’s way of doing it.
# 31oiltaxmorning1 :18 I’d love it if we eliminated every tax credit except one – and that would be, You get a tax credit if you put oil into the pipeline. But that’s not what we’re doing. We’re increasing tax credits in existing fields where they’re already pumping down wells.
Earlier in the day, Democrats had unsuccessfully proposed amendments that would have required specific actions or results from oil companies getting the tax benefits. Anchorage Democrat Mike Doogan said the bill is a mistake.
#31oiltaxmorning2 :21 What it does is simple. It takes a lot of money – and I mean a lot of money – from the state treasury and gives it to the oil industry. It does not require the oil industry to do anything in return. And it goes on forever.
Many supporters expressed concerns about the technical aspects of the bill. However, they said the recognition that oil production is declining overshadowed those concerns. Juneau Republican Cathy Munoz (MOON-yohz) said Alaska has been fortunate in the past few years while the rest of the country has suffered.
# 31oiltaxmorning3 :24 But Alaska’s future is uncertain. We have to act. The option of doing nothing is really not an option. And HB110 may not be the perfect plan. But it will continue to move through the process and it will continue to be revised. I am very confident today that we are making the right choice.
The bill will be available for a final reconsideration vote today (Friday) before going to the Senate where the bipartisan majority has said it will not pass.