Thomas backs Parnell's tax plan
In a recent interview, state Rep. Bill Thomas explained his support for Gov. Sean Parnell’s plan to roll back taxes on companies that explore for oil in Alaska, a proposal that would cost the state treasury as much as $2 billion per year.
Parnell’s plan was approved by the state House of Representatives but was blocked in the state Senate. Parnell recently said he’d continue to push for the legislation.
Parnell says the bill is needed to stimulate oil exploration in the state at a time of diminished flow through the trans-Alaska pipeline. Opponents say oil production has been in decline in Alaska during the span of various taxing schemes, and Parnell’s plan comes with no assurances it will stimulate more exploration.
The current tax was pushed through by former Alaska Gov. Sarah Palin, with the help of Democrats in the Legislature.
Thomas said that in the long run, the volume of oil is more important than the price and that diminished volume could shut down the pipeline. "If you don’t have oil, you don’t make money… I’m saying I want production up."
"We’re already giving (companies) a billion dollars in tax credits right now. What (Parnell’s proposal) is doing is giving them an additional billion dollars for the small guys… hopefully the small guys will go out there and work. It’s to incentivize them to go out there and do something," Thomas said.
Thomas said the reduction in oil production isn’t a natural byproduct of fields being tapped. "It isn’t. (The oil companies) won’t drill unless you incentivize them."
On the House floor, Thomas voted against five amendments offered by Democratic legislators, including ones that would limit the number of years tax breaks would continue, or require oil companies to report what they did to earn the breaks. "We want to be sure they are earning the tax breaks we are giving," said Rep. Bob Miller, a Fairbanks Democrat.
Thomas said Parnell’s plan already has a time limit, or "sunset" provision, albeit one that is longer than those proposed by Democrats. "(Oil companies) already have to show they earned (the tax breaks)," he said.
Mark Gnadt, press secretary for the House minority, said Parnell’s plan gives away too much. "You could definitely call it the governor’s oil tax giveaway and be fairly accurate."