Ending Oil Subsidies and a Look Ahead

July 20th, 2017

Representing District 16 in East Anchorage including College Gate, Nunaka Valley, Russian Jack and Reflection Lake neighborhoods.

HB 111: Ending Cash Subsidies for the Oil Industry

Late July 15th, the legislature passed a landmark bipartisan reform eliminating cashable oil and gas tax credits. The compromise legislation ends Alaska’s cash for tax credits system and strengthens the four percent minimum tax and was passed with broad support.

One major point to keep in mind is that through the end of June 2016, $1.1 billion was paid out in cash subsidies to the oil industry for projects that do not yet have production and in some cases have been abandoned.

Another major provision in the compromise deal is that losses incurred by an oil company on a potential oil field that never produces cannot be carried over to write off against the taxes owed on a field that does end up producing oil. This structural reform is called “ring-fencing.”

However, the work of reforming Alaska’s oil tax structure is not over. Another provision of the bill establishes a House-Senate working group that will convene between now and January, 2018 to look into further changes to how Alaskan’s receive value for their petroleum resources.

With the passage of the compromise version of HB 111, both the House and Senate adjourned the 2nd Special Session.

Capital Budget negotiations on-going

With HB 111 off the table, the legislature’s attention has now turned to the capital budget and negotiating a compromise between the House’s priorities and the Senate’s priorities. Both versions of the capital budget attempt to maximize federal matching funds for major transportation and infrastructure projects throughout the state.

The capital budget negotiation process is on-going between the House and Senate Finance Committee Co-Chairs. In order to save costly per diem, a third special session will not be called until a deal has been brokered between the House and Senate. This is important because convening a session requires flying legislators to Juneau while much of the work can functionally be done via phone until the final days. While I have concerns about how public the process appears to be, the fact is that the capital budget has been thoroughly vetted via the committee process already.

I support the on-going compromise negotiations, and look forward to resolving this issue in a short 3rd Special Session.

Russian Jack Community Council Picnic!

Come on out and enjoy a picnic with the Russian Jack Community Council! The picnic is taking place this Saturday from 11am to 2pm at the North Russian Jack Springs Park pavilion (near the polar bear playground on Pine Street). Hope to see you there!

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Thanks for keeping engaged in State government. This is a critical time in our history and it's important that we all remain engaged in solving our state's budget crisis. Please let me know if you have any questions, concerns or suggestions! I am here to help!