JUNEAU — By changing the calculation of oil taxes from a monthly to an annual basis, Gov. Sean Parnell's new oil tax bill would cost Alaska between $100 million and $200 million a year, Revenue Commissioner Bryan Butcher told a Senate committee Wednesday.
If oil prices are particularly volatile, the cost to the treasury would be even greater, Butcher told the Senate Resources Committee as it opened hearings on the measure. Had Parnell's tax changes been in place in 2008, a year of exceptional price instability, the treasury would have collected $600 million less than it did, he said.
The money that would be lost solely through the change in calculation period is in addition to the estimated $2 billion a year that Parnell wants to save for the oil industry by lowering tax rates when oil prices and profits go up. Parnell said the state's tax regime, put into place in 2007, robs oil companies of the incentive to drill wells and will result in less future production on the North Slope and a premature shutdown of the trans-Alaska oil pipeline.
Some senators and House members lining up to oppose the tax changes say the administration's required fiscal notes failed to account for all the costs in the complicated bill, including the losses attributable to the proposed annual collection period.
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"It was disturbing to not see it in the original fiscal note," said Rep. Les Gara, D-Anchorage, who attended the Senate committee hearing as a spectator. The provision has nothing to do with targeting new exploration, he said.
"This falls into the category of money we just give the oil companies to take home with them," he said.
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