Those Small-Government Republicans in Alaska

Thursday, August 17, 2006

Those Small-Government Republicans in Alaska

Before you read on, bear in mind that Alaska has a GOP governor, a GOP congressman, both chambers of its state legislature are Republican, and both of its U.S. senators are Republicans.

Now, then, from an editorial in Monday's Wall Street Journal:
Later this year every resident of Alaska will get a check in the mail for roughly $1,000 -- or $4,000 for a family of four -- simply for living in the state.

... The money for these bonuses comes from the interest earned on what is now a $35 billion oil-revenue investment fund that Alaska has amassed since the late 1970s. While $75 oil is pinching pocketbooks in the lower 48 states, for the 640,000 residents of Alaska the cost of energy has been a gift. Some 85% of the revenue the state collects comes from oil severance taxes -- a levy applied to the 850,000 daily gallons of North Slope oil that travels via pipelines such as BP's to the rest of the nation.

As a result, Alaska is only one of nine states without a state income tax, and one of only two (along with New Hampshire) with no income or statewide sales tax. Alaska is the only state that can fund government services by exporting its tax burden via energy taxes to the other states.

And here's the political rub: Alaska is also the largest state recipient of federal spending earmarks. The Tax Foundation says Alaskans receive nearly $2 of income transfer from the taxpayers of the other 49 states for every $1 they pay in taxes each year.

Ron Utt of the Heritage Foundation calculates that Alaska gets $5 of federal highway spending for every $1 in gas tax money it pays to the federal trust fund -- twice as much back as any other state. We all know about Alaska's $230 million Bridge to Nowhere -- a federally funded highway project that will connect the town of Ketchikan (pop. 9,000) to a tiny island with a population of 50.

... Year after year the 49th state manages to secure federal dollars for skating rinks, sea otter recovery grants, berry research, the Arctic winter games, native-Alaskan museums and miles upon miles of roads through deserted areas of the state.

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