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Palin proposes revised energy plan The $769 million plan would give every Alaskan $1,200, suspend state gas tax for one year, give loans to commercial fishermen Eric Lidji Petroleum News
Calling it a “starting point” for addressing rising energy costs, Gov. Sarah Palin submitted a bill to state lawmakers on June 20 that would give every Alaskan a $1,200 check, as well as suspend the state fuel tax for one year.
The one-time payment would distribute $729 million from an expected multi-billion-dollar surplus in oil revenue this fiscal year, which ends on June 30. The fuel tax holiday would save Alaskans $40 million, according to the state.
“We can afford to share resource wealth with Alaskans and to temporarily suspend the state fuel tax. It is my hope these items would be implemented by September. We look forward to working with legislators in the coming weeks to find the best possible solution to provide short-term energy relief,” Palin said in a prepared statement.
The move comes as the price of crude oil approaches $135 a barrel, bringing the state several billion dollars in additional unanticipated revenue, but stretching many household budgets, especially in rural communities.
Palin said even with recent allocations to education, pension plans and municipal revenue sharing, the state could afford to give additional money directly to residents.
Palin said she expects criticism of her plan from the state legislature, but asked lawmakers opposed to the idea to be prepared to provide alternative ideas during a special session tentatively scheduled for later in the summer.
The one-time $1,200 payment will go to anyone who has lived in the state for at least six months, making it more inclusive than the yearlong residency requirement for receiving an Alaska Permanent Fund dividend check.
The bill includes provisions designed to keep the payments from interfering with social security payments, medical coverage or veterans’ benefits.
Plan scraps debit card ideas The bill revises a proposal Palin made in May that would have given out $1,200 in “energy debit cards” to every resident of the state, as well as made $475 million in direct grants to electric utilities around the state with the goal of seeing a 60 percent reduction in costs for consumers.
Ultimately, the debit card idea proved to be too expensive to administer, and not particularly useful in those rural communities where debit cards are not accepted. However, the Palin administration plans to “continue reviewing” the utility grants and could give the Legislature another bill in July.
During the most recent regular legislative session, lawmakers considered, but ultimately rejected, a plan to give $500 to every resident of the state for a similar purpose. Lawmakers instead chose to offer weatherization and conservation grants.
Under her proposed plan, Palin also directed the Division of Investments to offer low-interest loans to commercial fishermen for fuel-efficient engines.
Alaska gas tax lowest in the nation Suspending the state gas tax could make a dent in household energy costs as part of a larger program, but would have little impact on its own. Alaskans pay among the highest gasoline prices in the country, but state taxes contribute very little to those high prices.
At 8 cents a gallon for gasoline, Alaskans pay the lowest state gas tax in the country. The next lowest rate is the 14-cent per gallon tax charged in Wyoming. The national average for state gas taxes is just more than 21 cents per gallon.
In addition to suspending the gas tax, Palin’s proposal would suspend three other pieces of the state motor fuel tax, including a 5-cent per gallon marine gas tax, a 4.7-cent per gallon aviation gas tax and 3.2-cents per gallon on all other aviation fuel.
Over the past decade, the state motor fuel tax has brought in around $40 million to the general fund each year, ranging from $42 million in 2006 to $35.6 million in 1998. In 2007, the tax brought in $39.2 million.
Over the course of the yearlong suspension, which would run through July 31, 2009, a family buying 50 gallons of gasoline each week would save $208.
Nationally, Republican presidential candidate John McCain has supported a summer holiday of the federal gas tax, while Democratic presidential candidate Barack Obama has opposed that idea. Several other states, including Illinois and Indiana, have enacted similar tax holidays in the past.
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