Governor Releases Draft Bill
Proposing Return of Resource Wealth to Alaskans in One-Time Payment;
Gas Tax Suspension Also Proposed
June 23, 2008
Alaska Governor Sarah Palin on Friday released a draft bill proposing
a special one-time payment in the amount of $1,200 to Alaskans
and suspending the state fuel tax for one year. The legislation
is intended to be a starting point for a discussion with the
legislature about how to provide relief from high energy costs
to working Alaskans and their families.
"As the fiscal year winds down, Alaskans are assured of
surpluses beyond the billions of dollars put into savings and
funding for priorities such as forward funding education and
municipal revenue sharing," Governor Palin said. "With
savings and funding priorities covered, I am confident that Alaskans,
who are the owners of our resources, can spend their resource
revenue better than government can."
She added, "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."
While the unique fiscal circumstances the state finds itself
in at the end of this fiscal year warrant a special one-time
payment to share some of the state's wealth, the payment comes
at a time when Alaskans are facing rising energy prices. High
prices for oil are a double-edged sword for Alaskans. While
public coffers fill, prices for heating fuel and gasoline have
skyrocketed over the last six months and are now running into
the $5- to $9-a-gallon range for heating fuel and gasoline across
several areas of the state. (Examples: Kokhanok - $9.10 for
heating fuel; Hughes - $8.50 for gasoline.)
The payment to Alaskans is estimated to distribute roughly $729
million of the state's resource wealth. Suspending the state
fuel tax for one year would save Alaskans about another $40 million
in state fuel taxes.
Governor Palin and the administration will continue reviewing
a proposal to make grants to utilities and introduce bills for
the legislature to consider next month.
In addition to this short-term relief, efforts are ongoing toward
a long-term energy plan for the state. That initiative is being
directed by Steve Haagenson, who was appointed the State's Energy
Coordinator in March. Haagenson, who also serves as Executive
Director of the Alaska Energy Authority, is developing a statewide
plan to reduce energy costs, promote conservation and secure
long-term supply solutions for each region of the state. Results
of his work are expected by the end of this year.
"These energy prices are draining family finances and causing
hardships all over the state," said Haagenson.
In addition, it was announced that the Division of Investments
will be amending its regulations to allow for low-interest loans
to commercial fishermen to purchase more fuel-efficient engines.
This proposal has no financial impact on the state's budget.
A proposal to use debit cards to deliver the special one-time
payments to Alaskans was dropped due to significant costs and
the inability to use the debit cards in many rural Alaska communities.
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