Revenue officials explain tax credit issue flagged by Walker

  • By Becky Bohrer
  • Monday, January 26, 2015 10:40pm
  • News

JUNEAU — State Revenue department officials told lawmakers Monday that the tax credits that were a source of contention in an opinion piece by Gov. Bill Walker are being paid primarily to small explorers or those developing new oil and gas fields in Alaska.

Walker earlier this month said the state stood to pay out about $100 million more in oil and gas production credits than it takes in in production taxes this year and about $400 million more next year. He referenced the 2013 rewrite of Alaska’s oil tax law, saying the overhaul occurred with little consideration given to low prices. Giving away more in tax breaks than the state collects is irresponsible and unsustainable, Walker said.

The department, in its fall revenue forecast, projected that the state would pay $625 million in so-called refundable credits. Revenue Commissioner Randall Hoffbeck told the Senate Finance Committee these are credits primarily to explorers or developers that have no tax liability. He said the credits are split pretty evenly between activity on the North Slope and in Cook Inlet.

The North Slope’s major players are not part of the group that would benefit from this category of credits, and they are paying taxes, Hoffbeck said. But production taxes amid low oil prices are forecast to total about $524 million this year, down from about $2.6 billion last fiscal year, according to the department.

Committee co-chair Anna MacKinnon, R-Eagle River, said the opinion piece seemed to leave the impression that the problem was with the North Slope’s big three companies.

Walker’s spokeswoman has said the governor was sharing facts with Alaskans as he and the administration were learning them and that the piece was not a precursor to any legislation. Walker took office in December.

Hoffbeck said there is no systemic problem with the credits themselves. He said this is a cash-flow issue, driven by low prices.

“Investments in the future, when you don’t have much revenue, are painful. But they’re still investments in the future,” Hoffbeck said.

More in News

Nate Rochon cleans fish after dipnetting in the Kasilof River, on June 25, 2019, in Kasilof, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)
King closures continue; Kasilof dipnet opens Saturday

The early-run Kenai River king sport fishery remains closed, and fishing for kings of any size is prohibited

An "Al Gross for Congress" sign sits near the driveway to Gross’ home in Anchorage, Alaska, on Tuesday, June 21, 2022, after he announced plans to withdraw from the U.S. House race. Gross has given little explanation in two statements for why he is ending his campaign, and a woman who answered the door at the Gross home asked a reporter to leave the property. (AP Photo/Mark Thiessen)
Alaska judge rules Sweeney won’t advance to special election

JUNEAU — A state court judge ruled Friday that Alaska elections officials… Continue reading

Ashlyn O’Hara/Peninsula Clarion 
Soldotna City Manager Stephanie Queen listens to a presentation from Alaska Communications during a meeting of the Soldotna City Council on Wednesday, March 9, 2022 in Soldotna, Alaska.
ACS pilots fiber program in certain peninsula neighborhoods

The fiber to the home service will make available the fastest internet home speeds on the peninsula

Nurse Tracy Silta draws a dose of the Moderna COVID-19 vaccine at the walk-in clinic at the intersection of the Kenai Spur and Sterling Highways in Soldotna, Alaska on Wednesday, June 9, 2021. COVID-19 vaccines for kids younger than 5 years old are now approved by both the Food and Drug Administration and the Centers for Disease Control and Prevention. (Camille Botello / Peninsula Clarion)
COVID shots for kids under 5 available at public health

Roughly 18 million kids nationwide will now be eligible to get their COVID vaccines.

Megan Mitchell, left, and Nick McCoy protest the U.S. Supreme Court’s decision overturning of Roe v. Wade at the intersection of the Kenai Spur and Sterling highways on Friday, June 24, 2022 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
‘Heartbroken’, ‘Betrayed’: Alaskans react to Roe decision

Supreme Court decision ends nearly 50 years of legally protected access to abortion

Demonstrators gather outside the Supreme Court in Washington, Friday, June 24, 2022. The Supreme Court has ended constitutional protections for abortion that had been in place nearly 50 years, a decision by its conservative majority to overturn the court’s landmark abortion cases. (AP Photo / Jose Luis Magana)
Alaskans react to Supreme Court overturn of Roe v. Wade

The Supreme Court has ended constitutional protections for abortion.

Tara Sweeney, a Republican seeking the sole U.S. House seat in Alaska, speaks during a forum for candidates, May 12, 2022, in Anchorage, Alaska. (AP Photo/ Mark Thiessen)
Lawsuit says Sweeney should advance in Alaska US House race

The lawsuit says the fifth-place finisher in the special primary, Republican Tara Sweeney, should be put on the August special election ballot

Gubernatorial candidate Bill Walker stands in the Peninsula Clarion office on Friday, May 6, 2022, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Alaska AFL-CIO endorses Walker, Murkowski, Peltola

The AFL-CIO is Alaska’s largest labor organization and has historically been one of its most powerful political groups

A portion of a draft letter from Jeffrey Clark is displayed as the House select committee investigating the Jan. 6 attack on the U.S. Capitol continues to reveal its findings of a year-long investigation, at the Capitol in Washington, Thursday, June 23, 2022. (AP Photo/Jacquelyn Martin)
Federal agents search Trump-era official’s home, subpoena GOP leaders

Authorities on Wednesday searched the Virginia home of Jeffrey Clark

Most Read