Alaska House postpones vote on oil tax bill – again

Speaker of the House Mike Chenault, R-Nikiski, wields the gavel of the second regular session of the 29th Alaska State Legislature on Jan. 19, 2016. Photo: Skip Gray/360North
Speaker of the House Mike Chenault, R-Nikiski, said he’s hearing dissent from all sides. Photo: Skip Gray/360North

For the second time in two days, House lawmakers have postponed a final vote on the governor’s controversial oil tax bill.

The bill is a cornerstone of Gov. Bill Walker’s efforts to close the state’s $4 billion budget deficit. Walker’s proposal would have brought in more than half a billion dollars next year, and about $400 million dollars a year after that, by raising the minimum oil tax and rolling back subsidies to smaller oil companies.

The House has scaled the bill back significantly. But the Republican-controlled majority still doesn’t have the votes to pass it.

Download Audio

House Bill 247, which revises the state’s oil tax and credit system, was on the calendar Monday morning. But when House Speaker Mike Chenault, R-Nikiski, arrived at that agenda item, he announced he was rolling it over to Tuesday.

Speaking after the floor session, Chenault said he needed more time to iron out differences within his Majority caucus. Right now, he said, he’s hearing dissent from all sides.

“Some think it’s too much,” he said. “Some think it’s not enough”

Some lawmakers worry the bill doesn’t go far enough to make a real dent in the budget, while others worry it goes too far, threatening to undermine the oil industry when it’s already struggling with low prices. And, they say, it’s yet another re-write of Alaska’s oil tax system, after a major overhaul just three years ago.

The current bill would step down cash credits available to companies in Cook Inlet, limit incentives for new oil on the North Slope, and set a hard minimum oil tax at 2 percent — among other measures.

Most of its provisions wouldn’t go into effect until at least 2017. In the years after that, it would only raise about a quarter to half of what the governor proposed. The bill would bring in an estimated $90 to $165 million in 2018, as compared to $420 to $455 million for the governor’s bill.

Rep. Les Gara, D-Anchorage, said that’s not enough. Under the current regime, the state is expected to pay out about $775 million, just in cash credits next year ($200 million of that is rolled over from last year), and $500 million in 2018.

Gara said there’s no way to close the budget gap without major changes to the credit program.

“What’s their plan, is their plan to cut the dividend by more? Is their plan to raise $300 million dollars more in an income tax? This is the easiest way to save money,” Gara said.

As for Chenault, he said he hoped to hash out a compromise at a Majority caucus meeting Monday evening, and said he expected the caucus would draft several amendments to make the bill more palatable to members.

Asked how confident he was that those amendments would be ready for the bill’s next scheduled hearing, on Tuesday morning — he just laughed.

Rachel Waldholz covers energy and the environment for Alaska's Energy Desk, a collaboration between Alaska Public Media, KTOO in Juneau and KUCB in Unalaska. Before coming to Anchorage, she spent two years reporting for Raven Radio in Sitka. Rachel studied documentary production at the UC Berkeley Graduate School of Journalism, and her short film, A Confused War won several awards. Her work has appeared on Morning Edition, All Things Considered, and Marketplace, among other outlets.
rwaldholz (at) alaskapublic (dot) org | 907.550.8432 | About Rachel

Previous articleAlaska News Nightly: Monday, Apr. 11, 2016
Next articleGlobalization in Your Wine Glass