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Alaskans may get state cash to offset fuel costs

June 21, 2008|From the Associated Press

JUNEAU, ALASKA — Gov. Sarah Palin is proposing to give nearly every Alaska resident $1,200 to offset high energy costs.

The $769-million energy relief plan released Friday also proposes suspending the state's fuel tax of 8 cents a gallon for a year for motorists.

Palin says the state can afford to help residents with energy costs that, in some cases, are double or triple the national average -- to $10 or more per gallon.

With oil prices at record highs, and a new tax law in place for nearly one year, the state's treasury is bursting with revenue.

"It's filled our state coffers, but at the same time, it's hurting the individuals' pocket books," Palin said. "With the crisis facing Alaskans, we've got to do something."

Soaring oil prices that have pushed $140 a barrel have helped boost the state's treasury in ways lawmakers never imagined.

One state senator in charge of the finance committee recently projected the surplus hitting $9 billion next year.

Lawmakers are seeking creative ways to help individuals as well as some of the state's other industries.

Also, the state's Division of Investments will be amending regulations to allow for low-interest loans to commercial fishermen looking to purchase more fuel-efficient engines.

Palin said this portion of her proposal would have no financial impact on the state's budget.

The fuel tax relief covers more than just road travel. It includes marine operations (5 cents a gallon), aviation (4.7 cents) and jet fuel (3.2 cents), totaling nearly $40 million.

"When you consider the billions we will have in surplus, it's not a negative hit in my world on the state's budget," Palin said.

The proposal is a scaled-down plan from the one announced last month, when Palin proposed a $1.2-billion one-year plan, about which some lawmakers had expressed reservations.

Part of the concern lay with Palin's idea to offer debit cards instead of a cash payout; her administration abandoned the idea after backlash from lawmakers.

"It went over like a lead balloon," the governor said. "Plus, the [administrative] costs would have been astronomical."

State Rep. Mary Nelson, a Democrat who represents the rural community of Bethel in western Alaska, said such help is sorely needed. In some areas gasoline is pushing $11 a gallon, she said.

"We know exactly how we need to spend our money," she said. "Every family will have different priorities. They'll be in charge of setting those priorities."

Last month, Palin also proposed grants totaling $475 million for utility companies that would lower customer bills. She says that option remains under review.

Palin's plan requires legislative approval. The Legislature is currently in a special session reviewing a natural-gas pipeline proposal.

The governor said she planned to meet with state House and Senate leaders next week to discuss the bill and the time lawmakers will need to review it. "We want to make sure lawmakers have the opportunity to make this even better," she said. "We want to work with them, not against them.

"If they have better ideas, if they come out criticizing this, we want to make sure they have the opportunity to offer better solutions, offer their own remedies."

Nelson said lawmakers should be ready to act.

"The ball is in our court now," she said. "Hopefully we don't botch it."

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