Morning Headlamp – Senate Finance Committee keeps tax credits intact

Senate revises House bill – Cook Inlet still loses. According to the Alaska Dispatch News, yesterday the Alaska Senate dismantled the oil tax bill passed by the House last week, offering a substitute that accepts a pair of significant House provisions but eliminates its North Slope tax increase aimed at big producers. The revised version of House Bill 247 was unveiled at a Tuesday morning hearing by Republican co-chair Anna MacKinnon and. The Senate Finance Committee’s revisions only have a total budget impact of $10 million on the FY 17 budget.

“Amnesia can be very convenient.” Sen. Cathy Giessel penned a commentary in the Alaska Dispatch News asking for Alaskans to “exercise patience, discipline and work with a long-term vision” in the oil tax debate. Giessel highlighted the fact that “Oil has paid nearly every bill and seeded our Permanent Fund for decades. Naysayers focus on production taxes, and overlook the state’s royalty take: one of every eight barrels of oil goes straight to the state, before any tax or credit calculations even take place.” Finally, Giessel reminded readers that many of the very same voices decrying credits today, voted “yes” just yesterday.” Headlamp applauds the Senator for her continued support of Alaska’s oil and gas industry. Like Headlamp, the Senator stresses the fact that lawmakers are acting irrationally in the face of a macroeconomic trend.

With the downturn in oil prices taking its toll, former oil company employees and related service companies are actively out hunting for work. About 4.2 percent of Alaska’s population worked in oil and gas jobs in 2015, according to an April 2016 report from the Alaska Department of Labor and Workforce Development. The department expects there to be about 1,000 fewer jobs in oil and gas from month to month in 2016 than in 2015, according to the January 2016 job forecast. Those projections are already low. According to DOL’s own numbers, from March 2015 to March 2016, employment in the oil and gas industry is down 2,300 jobs. “Everybody’s truly a support company for oil, gas, and mining,” Rebecca Logan of the Alaska Support Industry Alliance said. “We have drillers, but we also have hotels, graphics companies…You’d be hard pressed to find a company that isn’t supporting the oil and gas industry in some way.” When will lawmakers understand the gravity of their actions? Policies that hurt the oil and gas industry hurt Alaskans everywhere.

Alaskan lawmakers hit the 121-day constitutional deadline today, they now have two options: They can adjourn, and wait for Walker to call a special session with a limited agenda, which he’s said he wants in Juneau. Or they can extend their session for up to 10 days. Stick with Headlamp for the latest.

 

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First Reads

New Senate oil tax proposal preserves key tax break for big companies
Alaska Dispatch News, Nathaniel Herz, May 17, 2016

It’s oil tax debate season in Alaska, but let’s do it right
Alaska Dispatch News, Sen. Cathy Giessel, May 17, 2016

Support industries feel oil market contraction
Peninsula Clarion, Elizabeth Earl, May 17, 2016

Alaska Legislature approaches Wednesday deadline with most of its work still incomplete
Alaska Dispatch News, Nathaniel Herz, May 17, 2016