Oil Tax Hike Set for Signing

Gov. Sarah Palin is expected to sign a measure increasing taxes on Alaskan oil production. The bill reflects most of the goals she set out before calling the Legislature into a month-long special session that ended Nov. 15. The bill increases the base rate of the state’s petroleum production tax to 25% from 22.5%, plus surcharges when oil prices are high. The legislation also overhauls the tax deduction system used to encourage investments by oil producers.Between the new tax rate and the surcharge, the state government is projecting a $1.6 billion general fund windfall for the next fiscal year.Palin was elected governor in November 2006. She said it was necessary to revisit the oil production tax overhaul the Legislature approved in 2006 because it was tainted by corruption. Three former lawmakers have been convicted this year on federal corruption charges, with one more facing trial.