Alaska in Brief

Anchorage Democrat offers oil and gas property tax as piece of fiscal fix

By: - April 10, 2023 5:00 am

The chambers of the Alaska House of Representatives are seen on Tuesday, Feb. 7, 2023. (Photo by James Brooks/Alaska Beacon)

Amid ongoing debates about the size of Alaska’s annual budget deficit, Anchorage Democratic Rep. Cliff Groh introduced a proposal to raise the property tax levied on oil and gas companies.

State law currently allows local governments to tax oil and gas property — things like drilling rigs, pipelines and associated equipment — up to 20 mills, or $2 per $100 in value.

House Bill 153 would increase that cap from 20 mills to 30 mills — from $2 to $3 — and the state, rather than local governments, would keep the increase.

The effect would be $250 million in additional revenue for the state, Groh estimates. HB 153 designates the revenue for education and construction projects, but clauses of the Alaska Constitution would allow budget-writers to divert the money elsewhere if wanted.

In a written statement, Groh said he envisions the tax increase as part of a long-term fiscal plan for the state. 

The draft budget under consideration in the House this week contains a deficit of about $600 million, and Groh said choosing between budget cuts and spending from savings to address that deficit is a false dichotomy.

“This artificial scarcity created by lack of revenue pits Alaskan versus Alaskan. The increased revenue HB 153 will generate for our state will help sustain and grow the Permanent Fund Dividend without compromising high-quality state services,” he said in the statement.

In 2019, Gov. Mike Dunleavy’s budget proposal would have shifted $420 million in oil property tax revenue from local governments to the state; the North Slope Borough would have shouldered much of the burden. The proposal never advanced in the Legislature and Dunleavy hasn’t repeated the proposal since then. Groh’s bill would leave the existing oil property taxes in the hands of local governments, with only the new revenue going to the state.

Groh’s proposal joins other revenue bills, including a proposed state sales tax and proposed reductions in tax exemptions for North Slope oil and gas firms.


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James Brooks
James Brooks

James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. A graduate of Virginia Tech, he is married to Caitlyn Ellis, owns a house in Juneau and has a small sled dog named Barley. He can be contacted at [email protected].