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Note from Rep. Les Gara
Note from Rep. Les Gara  
Alert: Senate Turning Fair Share for Oil into Oil Giveaway
Note from Rep. Les Gara

May 5, 2017

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Dear Neighbors:

Legislative compromise became more distant this past week, as the Senate gutted much of an oil reform bill our bi-partisan Alaska House Majority Coalition passed to get us towards a balanced budget. The bill sought a fair share for our oil. Now, the current Senate amendments make it an oil industry giveaway.

With a nearly $3 billion budget deficit, a fair, balanced revenue plan requires that we stop giving away our oil for rock-bottom oil tax rates, and that we stop paying oil companies excessive subsidies we can’t afford. It’s a matter of fairness and math. Those with the greatest wealth and profit should contribute towards a fair revenue plan. Instead of a fair share for Alaskans, the Senate version gives away an unaffordable $1.7 billion in oil company tax credits, or subsidies, over the next ten years, and reduces our already rock bottom oil production tax revenue to less than it is under current law. The bill is now in the Senate Finance Committee.

Senate Proposal Turns a Fair Oil Tax Bill into an Oil Industry Giveaway

Knowing some Republican senators are much more aligned with the views of the major oil companies regarding the revenue Alaskans should receive for our oil, our bi-partisan Alaska House Majority Coalition passed a fair, modest bill to get Alaskans a much more fair share for our oil, while seeking a level of revenue we felt the Senate would accept. We thought it was modest enough that it could build compromise, and become part of the foundation for a fiscal plan.

We cannot solve a roughly $3 billion budget deficit with just the Senate’s proposal to cut dividends to $1,000. That leaves a $500 million deficit, it hits working and low income Alaskans the hardest, and it leaves that deficit in place, even with their proposed, damaging $100 million in public education and university cuts. 

Our bi-partisan Alaska House Majority Coalition passed a bill to the Senate, HB 111, that fixed what is a miniscule oil production tax. Current production taxes range, at current prices, from ZERO on some fields, to a “high” of just 4% on others. To fix this, our bill eliminates unaffordable cash subsidy payments to oil companies, and establishes a 25% tax rate on oil company profits. We feel that companies should pay their fair share when they are profitable. The House bill protects oil producers from paying when they are losing money, and protects the state with fair revenue. If I thought we had the votes on the Senate side I would have made the bill a bit stronger, but I have to deal with the reality of a GOP-led Senate that also has to pass the legislation. 

We need to move forward. We need to work together. Gutting a major piece of fair revenue legislation moved us backwards this week. We need a fair share for our oil to close our budget gap, and to allow us to afford good schools and basic services,.

I’ll keep working. I hope this is just a bump in the road.

My Best,

[signed] Les Gara

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