Politics & Government

Alaska's Parnell targets oil taxes, federal 'intrusion' in speech

JUNEAU — Gov. Sean Parnell used his first State of the State speech Wednesday night to criticize the federal government and defend his proposals for oil company tax breaks and a big new college scholarship program based on grades rather than need.

The Republican governor's speech comes as many legislators in his own party say he's not doing nearly enough to reduce how much the state taxes oil company profits. Parnell is getting heat on the other side, too. Democrats say he's trying to give tax concessions to the oil industry that aren't needed.

In his address to a joint session of the Legislature, Parnell said his approach to offer tax rebates as an incentive for drilling in Alaska would lead to more jobs and isn't a giveaway, as he described proposals to lower the tax rate that some Republican legislators have talked about.

"My oil tax credit proposals are just that, because companies must invest here in Alaska, create Alaskan jobs and drill more wells before qualifying for these new tax benefits. I don't support giving tax breaks without an Alaska work commitment," he said.

Parnell's tax credits could cost the treasury hundreds of millions of dollars, and Democratic legislators have argued there's no need for them and no guarantee they wouldn't just reward companies for drilling in existing fields they would have explored anyway.

His speech included much rhetorical fist-shaking at the federal government, complaining about the federal health care legislation, the designation of critical habitat for polar bears, national oceans policy and other examples of what he called federal intrusion.

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