Alaska Senate hints at compromise on oil tax changes

The House last year passed a version of Gov. Sean Parnell's tax-cut plan, but the bill, HB 110, stalled in the Senate. Leaders said they didn't have the information needed to make a sound policy call.

On the first day of the new legislative session, Stevens, R-Kodiak, told The Associated Press there's movement within his bipartisan caucus toward finding a compromise on oil taxes, and he said he personally believes a bill will come from a Senate committee, like resources or finance. Issues he expects to be looked at include the progressive surcharge currently triggered when a company's net profits hit $30 a barrel and incentives for heavy oil.

"It's good people are talking right now and willing to consider something," Stevens said. "And all seem to want us to work toward some sort of resolution on taxes."

Oil taxes are just one of the issues confronting lawmakers during the 90-day session, which began Tuesday, but it's a major one: Oil is Alaska's economic lifeblood and production has been declining.

Parnell sees his plan as a way to boost production and investment. The Senate majority caucus does not list oil taxes as a priority but increasing oil and gas production -- a shared goal with the governor and House leaders -- is on its list. As part of that, the caucus plans to examine "all parts of the oil and gas equation," including tax changes and incentives, according to its priority list.

Other issues expected to get attention this session include Alaska's unfunded pension liability, the budget and trying to get a handle on the cost of state government, education funding, savings and coastal management.

Supporters of a proposed initiative to revive Alaska's coastal management program turned in signatures Tuesday that they believe sufficient to get the issue on the ballot. Lawmakers can pre-empt the initiative, if it qualifies, by passing substantially similar legislation.

That's a tall order: An intended compromise with the governor on an overhaul of the program came apart in the Senate last year, and lawmakers failed to save the program in spite of repeated efforts. Rep. Paul Seaton, R-Homer, said the proposed initiative calls for "much stronger" local control than what existed under the old program or what was proposed last year.

But several lawmakers, including Reps. Beth Kerttula and Bob Herron, pledged support for legislative action on the issue.

Tuesday was a fairly light day, as lawmakers settled into their offices and a routine again. House and Senate floor sessions included the reading across of bills and assignment of bills to committees.

Stevens said some members of his caucus, but not all, also want to take another look at separating oil and gas for taxation purposes. "Decoupling" was a major issue two years ago and lawmakers passed a measure changing Alaska's system of taxing oil and gas production together. Parnell ultimately vetoed the measure, saying it would have effectively increased taxes.

Stevens said this is a good time to deal with the tax issue, noting it's an election year and that it's possible there could be big changes in the Senate next year. That includes a potential shake-up that could do away with the bipartisan bloc.

"I think we can (address oil taxes) and do it properly," he said.