State Senate to Take Up Governor’s Controversial Oil Tax Proposal

Gov. Sean Parnell’s proposed oil tax is currently in the House Finance Committee and will be heard in the Senate Resources Committee on Wednesday.

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By KTVA CBS 11

Story Created: Mar 8, 2011 at 8:39 PM AKDT

Story Updated: Mar 8, 2011 at 10:28 PM AKDT

A total of 273 bills have been filed this legislative session—95 in the Senate, 178 in the House. The governor's oil tax proposal is one of the more controversial bills, which the Senate will tackle Wednesday.

More than 20 lawmakers made the trip last week to Washington, D.C., for the annual energy conference—on the state's dime; a trip they say was well worth the money for legislative face-time with high-ranking White House officials.

“We made an invitation to (Secretary of State) Hillary Clinton to come up to Alaska to see the Arctic before the Arctic council meeting in Greenland in May,” said Sen. Lesil McGuire (D-Anchorage).

“It was very enlightening and successful, I think, in talking about issues important to Alaska,” said Senate majority leader Gary Stevens.

Lawmakers in both the House and Senate are grappling with the governor’s bill to provide tax cuts to oil companies.

“What they didn’t say is: if you look at that study: 25 percent said our tax regime was an incentive to investment and 31 percent said it had no impact at all,” said Rep. Berta Gardner (D-Anchorage). “So you could say 56 percent said it was an incentive or had no impact but we're justifying this multi-billion dollar bill on the fact that 44 percent said it was a deterrent.”

“If we're going to give away 2 billion dollars to the companies with no guarantees at all of how that money will be spent or what work will be done with that money in the state of Alaska and how many Alaskans will be hired, I have a hard time supporting that bill,” said Sen. Tom Wagoner, co-chair of Senate Resources committee.

Lawmakers are also questioning whether to move forward with the multi-million-dollar Goose Creek Correctional Center.

“I wouldn't jump to the conclusion that we're looking to mothballing it,” said Sen. Bert Stedman, co-chair of Senate Finance Committee, who said he wants an audit of the project this summer.

“There's another about $25 million needed to outfit it and our operation costs are going to go from $20 million to $70 million a year when it's fully implemented, and if we mothballed it, the operational impact to the state would go to about $20 million to $50 million a year,” Stedman said.

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