Byron Whitesides' Letter
By Sen. Bert Stedman
September 16, 2008
On August 17th, Mr. Byron Whitesides of Ketchikan posted a copy
of a recent letter he sent to me regarding the resource rebate
passed last month. Here is a copy of the response I sent to Mr.
Whitesides today [September 09, 2008].
Thanks for taking the time to contact me and share your thoughts.
While the state reaps huge financial benefits from high oil prices,
individual Alaskans are being forced to pay increasingly high
prices for heat, power and transportation.
It's understandable that folks are confused about the vote the
legislature took last month. On May 15th, Governor Palin set
an expectation that she was calling the legislature back into
Session to tackle high energy costs. On that day, she announced
a two-part $1.2 billion energy relief package debit cards
for individual Alaskans and capital grants for electric utilities.
The debit cards would provide all eligible PFD recipients with
a $100 per month credit towards energy purchases and the utility
grant program would lower residential electrical rates by 60%.
However, less than 30 days later, both ideas were dropped and
replaced with a $1,200 per resident "resource rebate".
As I'm sure you are aware, the legislature ultimately approved
the $1,200 one-time payment which will be added to the FY08 permanent
fund dividend checks going out this week. The Governor originally
proposed making 6-month residents eligible for the payment. However,
she also promoted the rebate as "a special one-time payment
to share some of the state's wealth". Well, the Permanent
Fund is how individual Alaskans share in the state's resource
wealth. Since this payment is clearly not energy relief, there
is little justification for broadening eligibility beyond those
who are currently eligible to receive a Permanent Fund Dividend
(PFD). The eligibility criteria and one-year residency requirement
of the existing PFD program has been tested in court and is likely
to be upheld if challenged. I'm sorry if you or some members
of your family aren't eligible to receive this year's payment.
I voted against this extra "resource rebate" payment.
It's simply bad public policy. The resource rebate payment isn't
based on financial need and there is no connection to actual
energy costs. These cash payments won't lower your energy costs
or help address the root causes of Alaska's complex energy problems.
They will do nothing to reduce energy consumption, encourage
conservation or promote efficiency. Alaska's resources are commonly
owned and the state has serious long-term needs. When we are
fortunate enough to derive excess revenue from our resources,
it should be invested for maximum statewide benefit. Creating
a supplemental program to pay a windfall oil bonus is irresponsible
and extremely shortsighted. At a cost of $750 million, the rebate
is expensive and extremely inefficient. Invested collectively,
the money could help fund important energy projects capable of
providing real energy savings over the long term. Paying it out
individually dilutes our purchasing power and subjects the payments
to federal taxes. As much as 20% or $150 million of these payments
will go directly to the U.S. Government.
Not all Alaskans are affected equally by high fuel prices. A
comprehensive energy plan would have targeted those in need and
provided assistance to those most affected by high fuel costs.
$1,200 is too much to pay for some people and not enough for
others. Clearly, the problem is greatest in areas that use diesel
fuel to heat homes and to generate electricity. The Senate plan
I supported, would have provided energy subsidies to every resident
who heats with electricity, heating oil or natural gas. The two-year
Senate plan, would have based payments on an individual's actual
out-of-pocket energy costs and all qualified Alaskans would have
been eligible not just those who receive a PFD. I believe
this was a much more focused and responsible approach to providing
state assistance for short-term energy costs.
High energy costs continue to be one of the toughest economic
challenges facing our state. I'm happy that the state is in a
position to financially assist Alaskans in the short term. However,
we need to continue working on comprehensive energy reform during
the next legislative session.
Received September 09, 2008
- Published September 16, 2008
ALASKANS By Byron Whitesides
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