As noted on these pages previously, recently I agreed to write a bi-monthly column on oil & gas issues for the Alaska Business Monthly. This is the second column, originally published in the September 2012 print edition and available online here.
Most Alaskans are familiar with efforts by Governor Parnell the last two years to reform Alaska’s current oil tax structure. The most recent effort ended earlier this year, when the Governor withdrew the revised oil tax reform bill that he had submitted at the beginning of the special legislative session.
What many are not aware of is something that happened at the end of the special session, immediately before the Governor withdrew the bill.
The Office of Management and Budget is the state agency responsible for preparing and administering the state budget. In an appearance before the House Resources Committee, the head of OMB, Karen Rehfeld, testified that if the Governor’s tax reform bill passed, the reduction in revenues could cause the state budget, which otherwise was projected by OMB to run a surplus for several more years, to turn to a deficit virtually immediately. Continue reading