As Senate Bill 21 makes its way through the committee process, lawmakers on both sides of the aisle are taking a closer look at the bill. "I haven't been convinced that progressivity should be thrown out,” said Senator Anna Fairclough (R-Eagle River). Fairclough is a member of the TAPS Throughput Committee that is currently reviewing the bill.
Progressivity is the current system used to calculate oil production taxes, which would go away if the governor’s plan is passed. The tax rate on a barrel of oil stabilizes as the price increases under progressivity.
Governor Parnell says while the state’s revenue may initially take a hit under a lower tax rate in his plan, but it would be made up for in the future as production increases.
"We've had expert testimony, that it makes us competitive," said Parnell of his plan. "By its very nature the proposal protects Alaskans with low oil prices, in exchange for giving up some revenue."
The Democratic Minority Caucus will need to gather at least 6 majority votes to stymie the bill.
"If you listen to the common sense of the Alaskan public, there's a feeling there that we should strike a better business deal, than what is contained in the Governor's bill,” said Minority Leader Sen. Johnny Ellis (D-Anchorage). “When majority members start to talk about that, that's very encouraging."
Senate Bill 21 is expected to clear the TAPS Throughput Committee by the end of this week, before it’s heard in the Resource and Finance Committees.
"I think that they're (the TAPS Committee) signaling that they're not going to accept amendments,” said TAPS Committee member Sen. Berta Gardner (D-Anchorage). “I intend to offer some of the ones that I think are important and I'm not ready to say which ones those will be."
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