Politics & Government

Alaska's oil taxes become hot button issue for Gov. Parnell

Lawmakers making their way to Juneau for Tuesday's start of the 2010 legislative session expect a bruising fight over whether to roll back Alaska's oil taxes.

An influential state representative is talking about an idea that could lower the state profits tax by a billion dollars at high oil prices, as other leading Republicans give luncheon speeches and issue press statements that talk about a decline in Alaska's oil industry.

"We have no control over economics worldwide, we don't have any control of the federal taxes. But we do have control over the state taxes and at some point in time during the session this will come up," said House Speaker Mike Chenault.

Gov. Sean Parnell has proposed offering the companies more tax credits if they drill in Alaska. But he argues against lowering the tax rate, saying there's no guarantee the companies would spend the money they save in Alaska. A new Department of Revenue report says oil company jobs and spending in Alaska are increasing.

It's a huge political issue for Parnell, who faces voters in November for the first time since he took the office following the abrupt resignation of Sarah Palin. Former legislator Ralph Samuels is running against Parnell in the Republican primary, saying the oil tax was a "feeding frenzy" and that Parnell is failing to do enough for the economy.

Anchorage Democratic Sen. Hollis French, a key supporter of the oil tax, is also running for governor and chairs the Senate Judiciary Committee, where he could be in a position to block any oil tax changes. French said he's seen no evidence to justify a tax break.

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