State energy tax overhaul is looking unlikely, lawmakers say

"Individuals have been trying to bring that issue forward but I just don't see the overall support," House Majority Leader Kyle Johansen, a Ketchikan Republican, said on Monday.

The main bill for a large reduction in Alaska oil taxes essentially died Friday when the House Resources Committee voted 5-4 to bottle it up. Homer Republican Rep. Paul Seaton made the successful motion to table the bill, saying the tax change would have cost the state more than a billion dollars in lost revenue.

"We haven't identified at all what we would have been willing to cut out. Were we going to cut out forward funding of education, were we going to cut out the university's capital construction?" he said.

The bill's sponsor, Anchorage Republican Rep. Craig Johnson, countered that the state has a surplus and bountiful cash reserves. But all four Democrats on the committee joined Seaton in voting to stop the bill. That overruled Johnson, the co-chairman of the committee, and the rest of the Republicans on the panel.

A separate bill by Gov. Sean Parnell to give tax breaks to companies that spend money drilling in Alaska remains alive and could get through its first committee this week. Johnson called it less aggressive than his proposal and said he thinks it stands a good chance.

But there's only three weeks left before the Legislature adjourns for the year on April 18 and the bill would have to pass the House as well as the Senate. Senate Majority Leader Johnny Ellis said he'd be surprised if that bill could pass, especially with so little time left in the session.

"People that would be necessary to pass (Parnell's) bill, I've heard them speak in a negative way about it," the Anchorage Democrat said. "So if people have changed their minds about Parnell's approach that will be news to me. And I'd want to know why."

Oil taxes were the highest profile issue when the Legislature began its annual session in January. Many Republicans in the House maintained the state's ACES oil tax system was killing investment on the North Slope. An industry trade group, the Alliance, ran television ads called "Faces of ACES" highlighting people it said lost jobs or business.

But the Alaska Department of Revenue said its data showed industry jobs and investment were up overall in Alaska. Legislators argued about the conflicting information but the oil tax issue faded from the forefront. Lawmakers were more interested in talking about natural gas for the Railbelt.

Valdez Republican Rep. John Harris said Monday he'd still like to look at changes to the oil tax. "But I just don't think the will is there, that there are enough people to do it," he said.

House majority leader Johansen said he thinks advocates of a lower tax will keep working with an eye toward the 2011 legislative session.

"I think it will come back and be an issue to talk about, I think starting next year, or probably starting this summer,' " Johansen said.