Visit https://mypfd.alaska.gov/ to apply for your Permanent Fund Dividend check before the deadline on March 31st. Every year, I get calls from my neighbors who have something come up and miss the deadline. Make sure to get your application in and spread the word!

See the FB event here: https://fb.me/e/JsHOgmai

On Friday, the Senate Rules Committee introduced Senate Bill 114, a bill to fix several major flaws in our oil tax law.

Current law gives oil companies up to an $8 tax credit per barrel of oil produced. This is projected to cost Alaska over $1.2 billion per year for the next decade. This is the equivalent of every Alaskan giving the oil industry nearly $1,800 per year from their PFD. The promise from the industry was that these credits would lead to more oil investment, more oil revenue, more jobs, and a growing PFD. Instead, capital investment has dropped by over 50% all across the North Slope and from $877 million in Prudhoe Bay in 2014 to $220 million in 2022. And for that $220 million in Prudhoe Bay investment, the State gave over $700 million in tax credits.

To make matters worse, for the first time in state history - and due to a loophole in our corporate income tax laws - we now have large producers on the North Slope that pay zero corporate income taxes. This loophole cost the state more than $100 million this year alone.

Whereas oil revenue historically has funded roughly 85% of Alaska's budget, because of tax cuts and credits and loopholes, oil revenue now funds between 15% and 30%. How has that deficit been made up? By cutting the PFD to fund the government. Except even that is not enough now, as we are projected to have a $400 million deficit next year even after the House Finance Committee reduced the PFD to a 50/50 share with state services. And that's before needed increases in education funding and deferred maintenance funding.

The time to act is now. We can no longer afford these extravagant tax credits that are not generating any additional investment or jobs and instead are draining our revenue. SB 114 cuts the oil tax credits from $8 to $5 per barrel. This will save the state roughly $450 million per year. To those who say this is a big increase, I would remind them that back in 2013 the Senate version of the oil tax cut bill had these tax credits limited to $5 -- and the oil industry was fine with it then. It was increased in the House at the last minute and never modeled at current oil prices.

SB 114 also ties the maximum available tax credits to capital investment. In other words - no reduction in taxes without additional oil production. Put another way - the more an oil company invests - the more tax credits they are eligible for.

SB 114 eliminates the corporate income tax loophole and levels the playing field for all major oil producers.

Finally, under existing law, the newly proposed Willow project could receive billions in tax breaks and cause a shortfall of up to $750 million by 2028 in state revenue. SB 114 will "ring fence" North Slope expenditures so that the state doesn't suffer this huge shortfall.

Legislators have long talked about a fiscal plan. This bill goes a long way toward getting Alaska a fiscal plan. I expect some in the oil industry may not support this bill, even though they supported these proposals back in 2013. I understand that their job is to make as much as they possibly can for their shareholders, and I respect that.

On the other hand, our constitutional job as Legislators is to get the maximum benefit for our resources. I also understand that oil industry workers want the same things that we all want - good schools for their kids, roads that are maintained and plowed, a thriving University system that gets our best and brightest ready to work, and a healthy PFD.

To those that oppose this proposal - I look forward to hearing your solutions to our structural deficit. To date, I've heard little to none.

This bill is a common-sense solution that goes a long way toward fixing our fiscal deficit. I look forward to the debate.