Wednesday, October 31, 2007

Special Session October 2007

Lately, and with good reason, many constituents have asked me how I feel about the Governor’s new tax plan for the oil companies, as well as what I believe is the best solution to the natural resources issue before us now. Without getting into the mundane details and numbers, I will try to answer your questions the best I can.

I am not a fan of taxing just so we can redistribute wealth throughout the population. However, as part of the statehood compact the resources of the state were given to us by Congress so that we could afford to govern ourselves, therefore we must get the best value for Alaskans from our resource base.

The PPT debate has three dimensions:
1.) To bring all the debate out in to the open and take a look at the substance without a cloud of corruption
2.) Rethink what is a fair share for Alaska from her resources
3.) To encourage exploration for new fields and also to get heavy oil from older fields.

I should mention that we get money from the oil and gas resources from several different ways:
 Property Tax - $54.5 Million
 Corporate Petroleum Tax - $661.1 Million
 Production Tax - $1.2 Billion
 Royalties (including Bonuses, Rents & Interests) - $1.8 Billion
[Figures taken from Dept. of Revenue FY 2006]
In contrast other revenue generated in Alaska amounts to about $450 Million per year.

My position on this bill is generally in favor of it. I like the Governor’s tax rate, but I am not a supporter of the 10% floor rate for legacy fields mostly because of the need to get the heavy oil out. I like the audit provisions that help us verify investment and expenses and I favor the progressivity that gets Alaska a greater share when the prices go higher.

Rep. Coghill speaks to Badger Road Elementary Students on Constitution Day.