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Home » Press » NEWS: Legislation Introduces Repeal of Multi-Million Dollar Refinery Tax Credit

NEWS: Legislation Introduces Repeal of Multi-Million Dollar Refinery Tax Credit

FOR IMMEDIATE RELEASE
February 18, 2016

Senator Wielechowski Introduces Legislation to Repeal Multi-Million Dollar Refinery Tax Credit

JUNEAU – Tomorrow, Senator Bill Wielechowski (D-Anchorage) will introduce legislation to repeal up to $120 million in refinery tax credits in an effort to make upcoming budget decisions more fiscally responsible and fair to Alaskans. 

Under current law, in-state refineries can receive up to $10 million per year for qualified expenditures over a period of five years, from 2015 to 2020.  Alaska currently has three in-state refineries eligible for these annual tax credits.  Companies are not required to show proof of need to access these subsidies.

“I continue to have strong reservations about the State of Alaska subsidizing profitable refineries through tax credits,” said Sen. Wielechowski. “At least one refinery, the Tesoro refinery in Nikiski, is on record as saying they don’t need the tax credit.”

The original bill establishing this controversial and unnecessary refinery tax credit, HB 287, was proposed by Governor Parnell and pushed through during the final 10 days of the 2014 Legislative session.  Sen. Wielechowski and concerned colleagues ran numerous amendments on HB 287, and later on the FY16 operating budget to address these credits, but all were voted down by the Majority.  In a September 9th letter to Governor Walker and Attorney General Richards, Sen. Wielechowski also called for a repeal of the refinery tax credits upon return to session this year. 

“Alaska faces a $3.7 billion budget deficit and action must be taken,” said Sen. Wielechowski.  “When education and other critical state services for Alaskans are under scrutiny for cuts, unnecessary payments to profitable refineries should be as well.  We need to keep our priorities straight.”

The bill would repeal the $10 million dollars in annual tax credits the State is currently required pay out to each in-state oil refinery for qualified expenditures, regardless of need.  Repealing this payout has the potential to save up to $30 million a year, for a total savings of up to $120 million over the next four years.

“I keep hearing from the Legislature that all options are on the table.  Well, let’s start here.  How can we ask Alaskans to make due with less when we spend our resources to fatten the bottom line of an already profitable refinery.”

For more information, contact Senator Wielechowski at (907) 465-2435.

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