JUNEAU -- The Alaska House of Representatives voted Thursday night for a massive rollback of the oil profits tax that the lawmakers put in place four years ago.
The vote, after about three hours of debate wound down after 8:30 p.m., was 22 to 16.
Neal Foster of Nome was the only Democrat to vote in favor. Alan Austerman of Kodiak and Paul Seaton of Homer were the only Republicans to vote against. Sharon Cissna, D-Anchorage, and Mark Neuman, R-Wasilla, were excused.
The House vote was an attempt to torpedo one of the biggest legacies of Gov. Sarah Palin's time as governor. Gov. Sean Parnell supported the oil tax when he was her lieutenant governor but is now leading the effort to weaken it, saying he's since become convinced that it hurts oil company investment.
"It requires us to believe, it requires a partnership with industry, it creates a balance in Alaska's oil tax," said Eagle River Republican Rep. Anna Fairclough.
A companion oil-tax bill is still in committee in the Senate. Senate leaders have said they aren't interested in passing it before the Legislature adjourns for the year on April 17. Bills have a two-year lifespan and Parnell could always try again with the Senate next year if he can't get senators to flip now.
House supporters of the tax cut said Alaska needs to become more globally competitive to reverse a decline in oil production dating to 1988.
Opponents called it corporate welfare, saying the state is giving away billions to companies who haven't promised any more jobs or drilling in return.
"Oil producers could only dream of getting a deal as sweet as this bill," said Anchorage Democratic Rep. Pete Petersen.
Department of Revenue estimates show the bill passed by the House on Thursday could cost the state more than $8 billion in lost production tax revenue over the next five years. Greater-than-expected oil production would help offset that loss by providing more taxes, but even 20 percent more oil wouldn't cover what the state gives up.
"We're raking it in, absolutely while our citizens are losing their jobs, moving to other states, selling their homes, relocating their children," said Anchorage Republican Rep. Craig Johnson, adding that oil unemployment claims went way up.
Tax cut opponents pointed to new Department of Labor statistics showing Alaska's oil and gas employment in 2010 was the second highest since at least 1990. The department estimated a monthly average of 12,800 oil and gas jobs last year, which is down from 12,900 reported in 2009 and the same number as was reported for 2008. Alaska's current oil tax system, known as ACES, was put in place in 2007. The acronym stands for Alaska's Clear and Equitable Share.
Fairbanks Democratic Rep. Bob Miller said cutting the oil tax will provide only one guarantee.
"The largest, richest corporations -- the most profitable in the planet -- have an absolute certainty over the next five years they will have an extra $7 or $8 billion come out of Alaska," he said.
Eagle River Republican Rep. Fairclough said she's troubled that people are willing to accept statistics from reports but she gets a different message when she talks to the owners of oil field service companies. Fairclough said Cruz Construction had more than 200 people employed in the North Slope oil fields but it is now down to just 12.
Other supporters of the tax cut recounted similar tales.
"When I go home there are houses for sale belonging to people in the oil industry who are now working in North Dakota, working in Nigeria, working in Australia," said Soldotna Republican Rep. Kurt Olson.
Tax cut supporters said North Slope exploration is down and Alaska is not seeing the drilling rigs that other oil producing regions are enjoying in these times of high oil prices. Alaska needs to make sure that oil keeps flowing in the pipeline, they argued.
"It's really time to do something different to help our economy," said Eagle River Republican Rep. Bill Stoltze.
But House Minority Leader Beth Kerttula pointed to a Department of Revenue report from January that said that "based on multiple changes to the tax laws over the past few years, drawing any conclusion about their effect on Alaska's investment climate is difficult." She said the House doesn't have the information to slash the tax.
"The proof is not there, it simply does not exist," she said.
Fairbanks Democratic Rep. Scott Kawasaki said the debate was too much about anecdotes. "I hope we make a good decision based on facts and not about anecdotal evidence," Kawasaki said.
Anchorage Republican Rep. Bob Lynn said he has doubts about the tax cut and doesn't like the lack of assurances from the companies that they'll drill more.
"I'd prefer something more than 'trust me, I'm an (oil) producer, I'm here to help you,' " Lynn said.
But Lynn said he was going to vote for the bill regardless, with the idea the Legislature could take another look at the tax in the future if it doesn't work.
"I'm most concerned about running out of oil," he said.
Passage of the bill in the House is a victory for the governor but it's not clear how he can change the minds of senators who oppose it. He suggested to the Associated Press that he'd want less spending on projects that legislators want if they don't pass the bill, but wasn't specific.
Parnell wasn't the only former supporter of the prior oil tax system to change his mind and now oppose it. Carl Gatto of Palmer, Wes Keller of Wasilla, Lynn of Anchorage, Stoltze of Chugiak and Bill Thomas of Haines all voted for the oil tax in 2007 and then cast votes on Thursday night to roll it back.
Here's Thursday's vote count on Parnell's bill to change the oil tax:
Yes: Chenault, Costello, Dick, Fairclough, Feige, Foster, Gatto, Hawker, Johansen, Johnson, Keller, Lynn, Millett, Munoz, Olson, Pruitt, Saddler, Stoltze, Thomas, Thompson, P. Wilson, T. Wilson
No: Austerman, Doogan, Edgmon, Gara, Gardner, Gruenberg, Guttenberg, Herron, Holmes, Joule, Kawasaki, Kerttula, Miller, Petersen, Seaton, Tuck.
Reach Sean Cockerham at email@example.com or 257-4344.