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News Bulletin: Parnell says tax bill is an increase, while revenue commissioner says it is a decrease
The following text is quoted from The Daily News Miner online news source (NewsMiner.com)
Gov. Sean Parnell sent a statement out Monday saying that a Senate oil tax bill he opposes is a tax increase.
"About a year passed before the Senate offered its own bill, SB 192, a tax increase," Parnell said in an "Action Alert" urging Alaskans to oppose the bill and testify today and Wednesday.But his revenue department says it is not a tax increase.
The fiscal note prepared by the Department of Revenue said the original bill would have no revenue impact on the state, based on the current outlook for prices and production.
The department said, "based on our most recent forecast, the progressivity rate changes in this bill will not impact revenue expectations."
The revised version now under review would be a tax cut, according to testimony Monday by Revenue Commissioner Bryan Butcher.
"It provides a modest reduction in taxes compared to the department's fall 2011 forecast," Butcher told the Senate Resources Committee Monday.
The modest tax decrease would be $250 million a year to start with and about $200 million a year in later years.
"I guess that's the problem when you use a word like modest," said Sen. Hollis French, an Anchorage Democrat. "Modest can mean different things to different people. But to me that's a whole bunch of money."
The tax cut over a period of four to five years would total about $1 billion.
One of the issues brought up by Sen. Joe Paskvan was the inclusion of royalties in the calculations of what constitutes profit. Royalties represent oil owned by the state and are not profit, he said.
Another issue is that if the state reduces taxes, some of that money will flow right to the federal government, which would be higher when state taxes are lower.
There are proposed amendments in the committee that would lower the rax rates on higher oil prices to reduce taxes to levels close to those in House Bill 110.
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