Oil Tax Change Could Hurt Alaska Rating

Business Week reported that a legislative analysis suggested Alaska’s credit rating could take a hit if Gov. Sean Parnell’s oil tax reduction plan is adopted.

The market news is quoted as saying:

Parnell’s revenue commissioner, Bryan Butcher, downplayed the Legislative Research Services analysis, saying the administration talks with the rating agencies yearly and is “very comfortable” that if the oil tax reduction were to pass it would not have a detrimental impact on the state.

The report from legislative analyst Chuck Burnham, requested by Sen. Bill Wielechowski, D-Anchorage, states that a tax rollback could be viewed negatively if it means increased reliance by the state on cash reserves. Burnham notes that revenues are one factor among many considered by rating agencies.

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