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Young: Gas tax suspension may undercut federal aid

Parnell spokeswoman says there was no federal effect in 2008

Posted: Wednesday, January 27, 2010

A proposal by Gov. Sean Parnell to suspend Alaska's motor fuels tax may undermine federal transportation funding, U.S. Rep. Don Young said Tuesday.

In a statement, the Republican lawmaker commended Parnell, also a Republican, for trying to relieve Alaskans' "pain at the pump." But he added: "By suspending the state gas tax, the challenge will be greater in convincing other members that Congress should continue its investment in Alaska's infrastructure."

Parnell spokeswoman Sharon Leighow said there was no federal effect in 2008, when then-Gov. Sarah Palin and the Legislature approved a similar suspension that expired in September.

The 2008 legislation came amid record high prices. The highest recorded average for a gallon of regular gas in Alaska was $4.695 on July 24, 2008, according to AAA. Tuesday, the Alaska average was $3.372, and the national average $2.70.

The state tax is 8 cents per gallon on regular gas but varies by fuel. Over two years, it would save consumers $81.7 million otherwise bound for Alaska's general fund.

Parnell has said the suspension is a way to responsibly return money to the people with no effect on state road maintenance.

State House Transportation Committee Chair Peggy Wilson, R-Wrangell, and House Majority Leader Kyle Johansen, R-Ketchikan, said the suspension's potential effect in Congress is a concern that they will seek to have addressed. Neither was ready to state a position on it. Johansen said he is "torn, not being particularly supportive of taxes," but didn't want to put the congressional delegation in a difficult spot.

Senate Minority Leader Con Bunde, R-Anchorage, said last week he doesn't think the suspension sends the right message when belt-tightening is needed. Alaska relies heavily on oil revenue to run, and forecasts have called for slumping oil production.

The other members of Alaska's congressional delegation, Republican Sen. Lisa Murkowski and Democratic Sen. Mark Begich, could not immediately be reached for comment.



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