Oil tax talk is encouraging

When lawmakers gaveled in the second session of the 27th Alaska Legislature, they did so like lions -- throwing all the cards on the table and getting down to business.

 

Only time will tell if our elected officials will go out like lambs -- much like they did last year, leaving several issues unaddressed.


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But what's particularly encouraging about lawmakers' spirits this year is that we are already talking oil taxes.

Several ideas and proposals have been made both by Gov. Sean Parnell's administration and by Senate and House leadership. While it would be premature to speak to many of them before the ink dries, we can't help but feel this will be the year we get the many needed tax tweaks we've been talking and hearing about.

The issue is complex as even producers are unsure just what the economy holds for oil prices. But one thing is for sure -- our lawmakers must work under the banner of encouraging Alaska exploration, development and new oil and gas.

Legislators and the Parnell administration must continue to engage industry leaders on what actions would result in continued expansion of Alaska's oil industry through a tax regime that isn't too aggressive, but isn't too, well, sheepish.

Having these discussions now is prudent and we would encourage House and Senate leadership to continue forward, looking also at what successes we've had in the past, namely Cook Inlet incentives previously implemented.

Oil provides about 90 percent of Alaska's unrestricted revenue and is one of the state's major economic drivers. Alarming is the news North Slope production declined 6.3 percent between 2010 and 2011's fiscal years. Even more alarming are forecasts from the state -- declines of 4.7 percent this year and 3.3 percent next year.

We must find a way to encourage new activity and exploration around the state unless we want to make serious changes -- likely those needed with an ax and not a scalpel -- in the state budget.

As we saw from last year's legislative session, changes will not come easy. But, these this debate is necessary to the future of our economic base.

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