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July 20, 2017
Agreement Reached to End Cash Subsidies to Oil Companies
This past weekend the House and Senate formed a compromise on HB 111 to eliminate cash credits to oil companies. The House passed the bill by a vote of 33-6 and Senate passed it 18-0. After weeks of negotiating, the bill is estimated to save the state about $200 million per year over the next 10 years. With some limitations, companies can instead claim tax deductions after they start producing oil, which makes a lot more sense than handing money over with no way to tell if it is resulting in increased production.
HB 111 also creates an interim working group to continue examining the oil tax system. Basic government services like quality education, public safety and road repairs are essential to a functioning economy with good jobs. We must come up with a system that works well for both the industry and the owners of the resource (us) under the new economic realities of oil.
As part of a comprehensive fiscal plan to diversify our state’s revenue, I’m hopeful we can come together on a more sustainable oil tax regime that creates fiscal stability for all sectors of the economy.
Capital Budget Expected This Month
It is essential that we pass the FY18 Capital Budget before the start of the federal fiscal year (October 1st) in order to receive over a billion dollars in federal funds with only a 10 percent state match.
Thankfully, legislators have expressed strong support for coming to an agreement on the capital budget by the end of this month, so I'm confident we'll see action taken very soon.
Passage of the capital budget is critical to ensure vital construction projects move forward, the protection of jobs in the contracting industry, and stability for the public and Alaska businesses.
I’m here for you, so please keep in touch on matters important to you and your family!
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