Alaska Governor Sean Parnell Calls On Legislature to Restructure Oil Taxes, Create Jobs
February 7, 2011, Juneau, Alaska - Governor Sean Parnell welcomed the Alaska Legislature's focus today on Alaska's jobs, as the House Resources Committee held a hearing on proposed oil tax adjustments. The governor's proposal is designed to spur private-sector investment, stem the decline in oil production, and create jobs by restructuring taxes on oil production.
"I appreciate the House Resources Committee beginning the legislative examination of my proposal to increase investment and improve our competitiveness," Governor Parnell said. "Obviously, oil production is critical to our state's future and provides the bulk of funding for our infrastructure, education system and vital services. Alaska must compete for jobs in the global context and we need to act this session to keep ourselves in the game."
With investment leaving Alaska for other areas, Governor Parnell warned that Alaska is close to slipping from being the country's second largest oil producing state to its fourth largest.
"The more you tax, the less you get," Governor Parnell said. "We saw this with cruise ship taxes. Once we made an adjustment to our passenger tax, the cruise companies started bringing more visitors back to fuel Alaska businesses."
The governor's legislation proposes:
· Tax credits for drilling new wells;
· A lower base tax rate for exploration areas outside of existing fields; and
· A cap on production taxes at 50 percent.
On Wednesday the House Resources Committee will hear testimony from an expert on the history of oil taxes. On Friday, the committee will hear testimony from the Department of Revenue on the governor's proposal.