Supporters of oil tax bill seek votes for Senate passage

Richard Mauer

The oil-tax bill continued its arduous path through the Senate Monday, a day after a long caucus of the Republican-led majority tried to find a way to passage on the chamber floor.

As a sign that something was brewing Monday, Sen. Lesil McGuire, a supporter of the measure, called an unusual meeting of the Senate Rules Committee for 9 a.m. Tuesday. A few minutes later, Majority Leader John Coghill said the Senate would meet in an rare Tuesday session starting at 11 a.m.

Both announcements were made on the Senate floor Monday, a day that supporters had hoped as recently as last week would be the last in the Senate for the tax-cutting measure, Senate Bill 21. Betting on passage, the House Resources Committee had scheduled its first hearing on the bill for Monday. That would have given the House about a month to consider the measure before adjournment.

But the "pending referral," cited in House Resource's calendar for Monday, remained pending. It's now reset for Wednesday -- still "pending referral."

John Wood, a former Anchorage Assemblyman and an aide to Sen. Mike Dunleavy, R-Wasilla, said his boss and Sen. Click Bishop, R-Fairbanks -- both freshmen -- were still in the "undecided" camp as of Monday. It's likely that both would be needed for the Senate to get to the 11 votes needed for passage.

"With him, facts and figures talk -- he's still doing analysis," Wood said of Dunleavy, a former school district superintendent. "I can't tell you which way it's going to go."

Senate President Charlie Huggins, a Wasilla Republican, has expressed hope that a larger majority would pass the bill than the bare minimum of 11. If it only has the backing of 11 senators, though, that would mean that it depended on the support of two employees of oil giant ConocoPhillips, a prime beneficiary of the bill -- Sens. Kevin Meyer of Anchorage and Peter Micciche of Kenai. Both are Republicans and both chair committees through which Senate Bill 21 passed.

"Right now, I'm the senator from District L. I'm not an employee of ConocoPhillips," Meyer said in an interview Monday. "I've been elected by my constituents to represent them and for me not to vote would disenfranchise 36,000 people.

Sen. Dennis Egan of Juneau, a Democratic member of the Republican-led majority caucus, said that an 11-vote passage would set a bad precedent for such a significant measure that will cost the state billions of dollars and has no requirement that oil producers invest more money in the state.

Gov. Sean Parnell said earlier this year that the wholesale rewrite of the state's tax policy was necessary to stem the decline in oil production by giving incentives to industry to drill more wells. But in a prepared statement released Monday, his message struck a different note: that cutting oil taxes was about increasing economic activity in Alaska and shrinking the size of government.

"Legislators in Juneau who support higher taxes are the same ones arguing for more government spending," Parnell said.

One of the leading opponents last year to Parnell's oil-tax cuts, Sen. Bert Stedman, R-Sitka, said Monday that he continued to be troubled by the bill. While he likes sections that would promote drilling in new areas, he believes the bill gives too much away to the major oil companies that produce oil in the "legacy" fields of Prudhoe Bay and Kuparuk. Those fields are profitable under current tax policy, he said.

Alaskans, as residents of the "owner state," should think of oil taxes as the selling price for their non-renewable resource, not as a traditional tax, Stedman said.

"To undersell it to shrink government is bizarre," he said.

McGuire, an Anchorage Republican, didn't say what she hoped to accomplish in the Rules Committee, and she didn't return a call seeking comment. But senators outside her caucus widely suspected she would attempt to amend the bill to resolve the objections of Bishop and Dunleavy.

Meyer said he thought the committee could just change percentages in the bill to increase the state's taxes and allay concerns that the cuts were too deep, but not change text that would fundamentally alter the bill.

On Friday, the Finance Committee moved the bill out of committee, but its support was tepid. Only two senators gave a "do pass" recommendation -- co-chairmen Meyer and Pete Kelly, R-Fairbanks. Vice Chairwoman Anna Fairclough, R-Eagle River, gave no recommendation; Sens. Dunleavy, Bishop and Donny Olson, D-Golovin, said the bill needed amending; and Sen. Lyman Hoffman, D-Bethel, said "do not pass."?

Egan, the Juneau Democrat, wouldn't describe Sunday's majority caucus except to call it "interesting." He said it lasted at least 2 1/2 hours.

If the bill does get out of the Rules Committee Tuesday and lands on the Senate floor, there will only be 19 senators present. Hoffman will be attending a funeral and is not expected back in Juneau until Tuesday night.

Sen. Johnny Ellis, D-Anchorage, said if the bill is rushed to a floor vote Tuesday, there won't be time to draft amendments, especially if the Rules Committee substitutes a bill for the one that left the Senate Finance Committee Friday.

"It's a terrible bill that would require many, many amendments to become acceptable tax policy," said Ellis, the minority leader.

He described the eventual floor vote -- whenever it happens -- as the most important vote that legislators will take in their lifetimes because of the long-term effects on Alaska's economy. If it only passes by 11 votes, it would be a public relations disaster for the majority because of its reliance on the two ConocoPhillips employees, he said.

"If they're doing this with 11 votes, I'm sure the oil industry will take it, but it's not any signal of confidence or strong support for the governor's approach," he said. "It's not going to go down with the public if this is rushed through and barely passes."

Note: An earlier version of this story described Sen. Kevin Meyer as a management employee of ConocoPhillips. He says he's a professional employee, not a manager.

Reach Richard Mauer at or 257-4345.



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