Meetings upon Meetings
The committees I serve on went full tilt this week. Not every committee is doing substantive work, but we moved some big pieces.
The Senate Judiciary Committee is going full speed ahead. We considered a different change to the PFD formula that would have created a separate constitutional fund to pay PFDs and written a minimum $1200 check into the law. It's a more complicated approach than the committee moved out in SB 53, but it was interesting to think about.
We also moved a constitutional spending cap bill, SJR 301. I don’t like this piece of the fiscal puzzle. Alaska voters should set the state's spending priorities when you elect and replace your legislators. It's also strange to imagine today's legislature knows the 'right' level of spending forever. The state has cut the budget deeply. We’re not keeping up with Alaskans' needs. Just look at the inadequate and unreliable ferry schedule, our backlog of major maintenance, diminished public health capacity, and on, and on...
At the same time, it may take some sort of spending restriction to build enough support for a full-scale fiscal fix. So I really appreciate the committee’s work to make this particular cap reasonable, tied to our state’s economy and not debilitating to the services Alaskans need.
In the Senate Resources Committee we started looking at revenues. SB 3002 takes a three-pronged approach: (1) corporate income taxes for large businesses, (2) an increase in motor fuel tax, (3) reducing oil tax credits.
The first piece makes sure Hilcorp (the company that bought out BP on the North Slope) starts paying corporate income tax like Exxon and ConocoPhillips, which produce the same oil from the same fields into the same facilities. They don't have to now, and that's not fair. It also goes further, taxing all Alaska companies' profits after $4 million. That's fewer than 900 businesses statewide.
The second prong would raise our motor fuel taxes. Alaska hasn’t adjusted the current eight cents/gallon since six years before I was born. If it had kept up with inflation, it would be about 45 cents today. The bill would only raise it to 16. What's missing is a way for electric cars (like mine) to contribute toward the wear and tear we, too, put on the roads.
The third component is oil tax credits. Our oil taxes are complex, but we use these per-barrel credits to ‘graduate’ our oil and gas production tax, lowering the rate at lower profit levels. The bill lowers the credit, so it increases the tax rate. In a couple of years it would raise about $250 million per year, matching a proposal Gov. Dunleavy's Revenue commissioner presented a month ago. We'll get more analysis soon, but my first impression is that this change makes sense.
And hey—we're actually considering significant revenue bills! It's been far too long since the legislature did that.
