June 23, 2008
Monday

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.

On the Web:

Download a copy of the draft bill
http://www.gov.state.ak.us/pdf/FuelTaxBill_06-20-2008.PDF

Source of News:

Office of the Governor
www.gov.state.ak.us

 

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Ketchikan, Alaska