Petroleum property tax revenue in play

Kristen Nelson

Petroleum News

Alaska Gov. Mike Dunleavy introduced his budget Feb. 13, and while no new taxes were proposed, he did propose, in Senate Bill 57, removing the ability of cities and boroughs to get property tax revenue from petroleum property.

Its title says the bill would repeal “the levy of tax by a municipality on oil and gas exploration, production, and pipeline transportation property.”

The bill was referred to the Senate Committee on Community and Regional Affairs and the Senate Finance Committee; no hearing had been scheduled when Petroleum News went to press, but Rep. John Lincoln, D-Kotzebue, and Sen. Donny Olson, D-Golovin, put out a joint statement objecting to the loss of revenue for communities in their area of the state.

“While Senate Bill 57 applies equally to all petroleum property statewide, it, unfortunately, would have a disproportionate effect on the North Slope Borough, which is where the vast majority of Alaska’s known oil reserves are located,” Lincoln said.

“Senate Bill 57 would decimate the North Slope Borough’s budget and reduce its ability to provide for essential services like education and public safety,” Olson said. “The North Slope Borough provides many services to residents in villages outside of Utqiagvik such as policing and utilities like water and sewer. If the Borough is unable to provide for these services, then the state will have to step in, which will cost even more money in the long term,” he said, saying the measure “is not cost savings, it’s cost shifting.”

In one of several administrative orders issued in conjunction with the release of the budget, the governor ordered the “transfer of the Alaska Oil and Gas Conservation Commission, for administrative purposes only, from the Department of Administration to the Department of Commerce, Community and Economic Development,” for efficient administration.

Commerce is already the administrative home for the Alaska Energy Authority, the Alaska Industrial Development and Export Authority, the Alaska Gasline Development Corp., the Alaska Railroad Corp., the Alaska Seafood Marketing Institute, the Alcohol and Marijuana Control Office and the Regulatory Commission of Alaska.

The Department of Administration is home to the Alaska Public Broadcasting Commission, the Alaska Public Offices Commission and the Office of Administrative Hearings.

- KRISTEN NELSON