High Oil Prices Good for at Least One State
July 31, 2008
With gas prices on the rise, some states have considered providing relief to their citizens by suspending their state gas taxes. However, many states are also faced with budget shortfalls which make it difficult to forgo any tax revenue. Not so in Alaska, where Gov. Sarah Palin has proposed suspending the state’s gas tax and sending a sizable “resource rebate” check to every resident. Bob Tkacz from Tax Analysts (subscription required) writes:
Recent record oil prices are flooding Alaska’s treasury with huge royalty and tax profits, but the state’s residents and businesses are struggling to pay for gasoline that has long cost more than $5 or $6 per gallon in the most remote communities. Depending on the average price of crude oil over the state fiscal year that began July 1, the Department of Revenue is projecting a revenue surplus, beyond the state’s roughly $4 billion operating budget, in the range of $8 billion to $10 billion, or more.[…]
The [gas tax] suspension would cost the state treasury an estimated $39.9 million for a year. It is one of four measures under consideration to help Alaskans cope with energy costs. Palin has also proposed HB 4002, which would provide a special “resource rebate” payment of $1,200 to every Alaska resident as a broad assistance measure that directly shares the state’s windfall profits.
But not all Alaskans are lining up to board the gravy train. Some point out that residents already benefit from the state’s oil resources through annual payments from the Alaska Permanent Fund. From the Anchorage Daily News:
Alaskans are already counting on Permanent Fund dividend checks this fall of almost $2,000 each. Every man, woman and child who’s a bona fide resident will get the payment.
In any other state, residents would faint with joy if their politicians handed out that kind of money. An Alaska family of four is going to collect $8,000. That’s not enough to help Alaskans cope with the spike in energy prices?