Bill in House to increase oil taxes
Three co-chairs of major House committees have introduced legislation to increase the state’s minimum oil and gas tax from 4 percent to 7 percent.
The bill targets the North Slope, applying to oil and gas produced from land north of 68 degrees North latitude and would apply to production on and after Jan. 1, 2019, and before Jan. 1, 2022. It applies when the average price for North Slope crude oil on the West Coast is more than $25 per barrel, and decreases by increments to zero percent if the West Coast price drops below $15 per barrel.
Reps. Geran Tarr, D-Anchorage, and Andy Josephson, D-Anchorage, co-chairs of the House Resources Committee, and Paul Seaton, R-Homer, co-chair of House Finance, are the sponsors of House Bill 288. The three are members of the Alaska House Majority Coalition. The bill was referred to Resources and Finance. As this issue of Petroleum News went to press no hearing dates had been set.
In a Jan. 16 press release the representatives referred to the legislation as the “Fairness in Oil Taxes Bill,” and said that since Alaska’s fiscal gap can’t be reduced through budget cuts alone, the bill would increase revenue.
“The Senate’s unwillingness to consider new revenues has left Alaskans with limited choices for a sustainable budget future,” Tarr said in a statement. “This bill represents a modest, fair increase in oil taxes that benefit all of Alaska.”
The sponsors said the increase in the minimum tax is estimated to raise some $225 million.
“Stability in oil taxes ensures that present and future Alaskans can share in the benefits of Alaska’s natural resource wealth,” Josephson said. “If we aren’t increasing the Permanent Fund, then we won’t have new revenues to share through the permanent fund dividend program. Even with all the increased oil exploration happening in existing and new locations, we can’t balance the budget with the existing revenue stream.”
“The Alaska House Majority Coalition is committed to a vibrant and diversified future for Alaska where our kids can get a great education, our seniors and elders are cared for, and our economy works for all Alaskans,” Seaton said. “If the Senate refuses to address small steps to diversify revenue sources, then we must continue to rely on the oil and gas sector to fill the gap.”
- KRISTEN NELSON