Sen. Bert Stedman, R-Sitka, has been critical of the current tax system, known as Senate Bill 21 or the More Alaska Production Act (MAPA), since it was first approved in 2013. He said the issue is larger than minimum tax or no minimum tax: the issue is the credits.

“If we’re in the $40 price range for the next 12 to 18 months, we’re going to cripple the treasury for five, six years,” he said.

That’s because whether or not the state hardens the floor, the credits don’t go away – they’re carried forward into future years. If companies take major losses at low oil prices, they can use that to reduce their taxes for years to come.

Stedman said that for all its faults, the previous tax system, called ACES — or Alaska’s Clear and Equitable Share — allowed the state to make up that money if oil bounced back, imposing much higher taxes at high prices. “We can’t afford $35 and $40 per barrel oil. Because we can’t recoup it on the upside to repair it.”

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