Oil Tax Revenue

The petroleum profits tax that Sarah Palin introduced and the legislature passed during a time of high oil prices in 2007 created a budget surplus that was used to increase capital budget spending on our infrastructure. The result was that Alaska was able to avoid the worst impacts of the great recession. The 2007 bill, Alaska’s Clear and Equitable Share, through its progressivity feature, increased Alaska’s share of oil revenue as the price per barrel increased. Now the pendulum has swung too far in the other direction following the passage of Senate Bill 21 in 2013. Under the current oil tax structure Alaska is receiving less when prices are high, and we are paying oil companies more in the form of tax credits. If you have been to the gas pump lately, you know that global oil and gas companies are making plenty of money. Why should Alaska be paying them tax credits out of our budget while we are left fighting about the PFD vs. state services? I believe the legislature needs to revise the oil tax structure to eliminate the tax credit subsidies for “incentivizing” normal work on our legacy fields by the major oil companies.