Alaska Losing $1.5 Billion
Per Year On New Oil Tax Say Expert Documents
July 21, 2007
(SitNews) - Friday three legislators shared with the public
several documents demonstrating how Alaska is being short changed
under the current oil tax structure. The net profits tax that
was passed under the cloud of corruption is costing the state
billions according to information from experts hired by the state
during last year's oil tax debate. As the state considers a
special session to fix Alaska's broken oil tax system, debate
is centering on whether last year's law is fair to Alaskans.
The attached expert documents and information in the state's
possession indicate Alaskans are being shortchanged by roughly
$1.2 to $2 billion each year.
The recent FBI investigations
into corruption, already producing guilty pleas and one conviction
relating to bribery and conspiracy, cast the current oil tax
regime into serious doubt. Today legislators who've sponsored
oil tax reform efforts in the Legislature are sharing documents
with the public to inform a stronger public discussion.
"We already know from
our experts that Alaskans are being shortchanged by last year's
oil tax," said Rep. Les Gara (D-Anchorage). "The debate
shouldn't be about whether we're being short changed, but about
how we're going to fix this problem. Gara is a prime sponsor
of HB 89, which would fix Alaska's oil tax that was held up from
a vote in the House Oil and Gas Committee, Chaired by Former
Rep. Vic Kohring (R-Wasilla).
"If we don't fix this tax in special session this year,
Alaskans may stand to lose another $2 billion. That would be
irresponsible," said Sen. Bill Wielechowski (D-Anchorage).
Wielechowski has sponsored parallel Senate oil tax reform legislation,
SB 175, with Senators' Hollis French (D-Anchorage.), Kim Elton
(D-Juneau) and Johnny Ellis (D-Anchorage).
The House bill is sponsored by Reps Gara, Harry Crawford, Bob
Buch (D's-Anchorage), and David Guttenberg (D-Fairbanks). Gara,
French, Crawford, and others have led the fight for oil tax reform
since 2004, when it because obvious the state was being shortchanged
in a world of high oil prices and excessive oil company windfall
"With the record-high oil prices, it's more imperative then
ever that we reexamine our oil taxes," French said.
The Information from world oil tax consultant Daniel Johnston,
and consultants EconOne and Wood Mackenzie, all hired by the
- The World Average Tax, measured
in what experts call "Total Government Take" is roughly
67 73 percent.
- The "Total Government
Take" On Alaska oil, at current oil prices, is much lower,
at roughly 61 percent.
- Each percent the state reduces
it's "Government Take" costs roughly $200 million in
lost oil tax revenue.
- With a Government Take between
6 and 12 percent below the world average, the state is losing
between $1.2 and $2 billion per year.
In January Gara asked the State
Department of Revenue to help update this analysis comparing
Alaska's tax with rates charged elsewhere in the world. The Department
is appropriately looking into that information to update and
refine this analysis.
Gara, French and Wielechowski
are working to highlight the expert information the state already
has on this subject as Alaskans question whether the Legislature
needs to go into special session this fall to fix Alaska's oil
tax. According to FBI indictments and released testimony, at
least 5 legislators who voted on last year's oil tax allegedly
received illegal payment offers from VECO or other company executives.
On the Web:
Download the Documents
Source of News:
Office of Rep. Les Gara
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