Alaska senator wants to roll back 2013 oil tax credit
Alaska provides state government a vast flow of energy revenue – but one state lawmaker says Alaskans are giving up too much of it to the oil and gas industry.
Sen. Bill Wielechowski, a Democrat who represents East Anchorage and JBER, is proposing a bill which eliminates a 2013 oil tax credit program dating back to then-Gov. Sean Parnell's Senate Bill 21.
Wielechowski supports continued development, but says the 49th state is coming out on the short end.
"Legislators are going to be faced with a choice: Do you want to continue to cut and slash the Permanent Fund dividend check so that we can give these lavish subsidies to the oil industry?" he said. "I think a lot of Alaskans would say, 'No, that's not the way we should go.'"
Ending the program would save the state $1.2 billion this year and then $1 billion annually, according to Wielechowski, although he does have some concerns about going up against business interests.
"I think we've got be careful," Wielechowski said. "The oil industry is important to this state. But at the same time when you're in a situation where you're earning $400 to $800 million in a year and you have tax credits that you're allowing of $1.2 billion in a year, you just have to look at the sustainability of this program. We just can't afford it."
Wielechowski says independent consultants admit the situation needs to be fixed, and that other lawmakers have privately expressed support for the idea.
Kara Moriarty, president and CEO of the Alaska Oil and Gas Association, said in a statement Thursday that Wielechowski's proposal would be "a direct tax increase on the oil and gas industry."
“Legislative consultants and officials with [previous Gov. Bill Walker's] administration have all agreed the per-barrel tax credits are essential to keeping Alaska’s fiscal regime competitive," Moriarty wrote. "The per-barrel tax credits that Sen. Wielechowski want eliminated have been described as an important feature of the current tax system. One consultant said they are “an adjustment of effective tax rates to offset high royalty at low prices”. This new piece of legislation is just yet another attempt to raise taxes.”
Wielechowski plans to introduce his Senate bill to end the program on Jan. 15, as this year's legislative session convenes.
Editor's note: An initial version of this story misstated Kara Moriarty's title as executive director, not president and CEO.
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