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Alaska Senate leaders doubt oil tax overhaul this session

  • Author: Patti Epler
  • Updated: September 27, 2016
  • Published January 19, 2011

JUNEAU -- Lawmakers seemed generally receptive to Gov. Sean Parnell's State of the State address Wednesday night but were also non-committal about how much of the governor's agenda they might be willing to go along with.

Senate leaders quickly warned that the 90-day session likely won't be enough time to resolve the complicated issue of oil taxes. They said they have hired consultants to provide detailed data on more than 100 oil-producing basins throughout the world so they can compare Alaska's competitiveness to other places when it comes to taxes and other investment factors. Senate Finance Committee co-chairman Bert Stedman said the final report isn't expected until June, two months after the session is over.

Senate President Gary Stevens hedged on the notion of a special session to deal with oil taxes, saying that was the governor's call. But he suggested it's an issue that could be left until next year because lawmakers want to get it right.

"My personal belief is that to come to a solution on oil taxes is hard to do in 90 days," he said.

Stedman, a Sitka Republican, told reporters he's also willing to pull the plug on the gas line if pipeline proponents don't prove pretty soon that the project is actually going to get done. The state has agreed to spend up to $500 million helping TransCanada and Exxon Mobil with pre-construction costs under the Alaska Gasline Inducement Act. The governor proposes appropriating $160 million of that total in the FY 2012 budget.

But Stedman, who is in an influential position as co-chair of the finance committee, said he'd just as soon spend that money on schools, roads and other infrastructure "instead of sending a check to TransCanada." He pointed out that Exxon Mobil Corp. hasn't even signed the AGIA agreement, suggesting the oil giant isn't that comfortable with the project.

"I think it's quickly approaching the time to cut our losses and free the state from (the companies') schedule," he said.

Sen. Johnny Ellis, an Anchorage Democrat with a top post in the Senate bipartisan leadership, said he's not convinced that other legislative leaders share Stedman's view.

"People are pretty nervous and doubtful" about AGIA, Ellis agreed. But he added that Stedman is probably the most vocal about "sounding the alarm."

"I think most people feel we're not quite there yet to pull the plug," Ellis said.

Parnell also said in his speech that he had talked with legislative leaders about a self-imposed spending limit for this year's budget "so together we can avoid the spending frenzy at the end of session."

But Stedman and Stevens said no such limit has been agreed upon. In fact, they said, the governor's proposed budget seems to be as much as $150 million over what revenue forecasts have said the state will have to spend.

Senate leaders also pointed to the governor's comments that Alaska is in much better shape financially than most other states. They attributed that to a strong capital spending program, pushed by the Legislature -- not the governor -- over the past few years because it kept people working and kept money in the communities.

Contact Patti Epler at patti(at)alaskadispatch.com.

Update: this story has been corrected to reflect Sen. Bert Stedman is from Sitka, not Juneau.

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