Around this time last year there was a lot of conversations about Senate Bill 21 and voting yes or no; so how has it done?
In August of 2014 Alaskans voted not to repeal the oil tax structure known as SB 21 and backed by then Governor Sean Parnell.
At a June 2015 Joint Resources Committee in Kenai, Senator Peter Micciche asked Governor Bill Walker’s administration to clarify if SB 21 is a cause of the state’s current deficit.
Randy Hoffbeck: “The truth of the numbers is that under SB 21 in the current price regime, the SB 21 has earned more money than ACES would have in a similar price regime. So SB 21, because of the floor or minimum, has been a benefit to the state with $60 per barrel oil.”
According to Alaska’s tax division Director Ken Halbert,the state would have been collecting around $300-400 million a year less under ACES.
When approving the final budget for fiscal year 2016 in June, Governor Walker trimmed $200 million from the tax credits’ original $700 million appropriation, saying those already applied for would be paid at later time.
Sen. Micciche said those deferred payments cause two concerns for him.
Sen. Micciche(R-Soldotna): “This does not affect the larger producers, the larger producers have tax liability and they pay oil taxes, a substantial amount of oil taxes. This largely affects smaller companies.”
He said for small companies, waiting on the payments could put them in a tight spot when they are trying to expand exploration.
As for Sen. Micciche’s second concern….
Sen. Micciche(R-Soldotna): “If we are in worse economic positions in the future, where are we going to find the funds to pay back those credit payments for those companies.”
He compared the oil company’s tax credits to Alaskans’ personal deductions on income taxes, saying waiting for the money could have adverse effects on finances.
