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Legislators question need for $1,200 checks

House committee limits energy relief payments to newcomers, mirrors dividend application

Posted: Monday, July 28, 2008

Gov. Sarah Palin's package of energy relief measures may be facing a rougher road than her controversial gas pipeline.

Handing out $1,200 a few months before an election should be an easy vote, but opponents are emerging from the left and the right.

Sen. Kim Elton, D-Juneau, wanted to know why people who had high, but not crippling fuel bills - like himself - should get the same amount of money as those in rural areas that are in desperate straights.

"It offends my notion of fairness," he said.

Rep. Mark Neuman, R-Big Lake, typically not an Elton ally, also questioned handing out cash when the state anticipated deficits in the future as oil production declined.

The only responsible thing, he said, was using this year's surplus to build an economy for the future.

"I want to use this money to create jobs," Neuman said.

Giving away the state's surplus now may lead to creation of a state income tax, or using the Alaska Permanent Fund to fund government instead of paying dividends.

"I cannot do this in my right mind and still think I'm accountable to Alaskans," Neuman said.

Palin's package of proposals includes the $1,200 payment to all Alaskans, combined with subsidizing energy costs, mostly for poor and rural residents.

Rising energy prices, magnified in rural areas by the high cost of simply getting heating oil and generator fuel there, are increasing the pressure on the state to share its wealth with its citizens.

High oil prices and last year's oil tax increase have dollars flowing into the state treasury at a rate that couldn't have been imagined just a few years ago.

"The state of Alaska is awash in money," said Sen. Lyman Hoffman, D-Bethel. His rural Southwest Alaska district is one of the state's poorest, and is being hit with some of its biggest fuel price increases.

That's putting pressure on the Legislature and governor to find a way to help.

"We've got to get more cash into people's hands before winter," said Julie Kitka, president of the Alaska Federation of Natives.

How to address those needs has legislators in conflict with each other, and sometimes themselves.

Rep. Andrea Doll, D-Juneau, said she's been reluctant to pay out state money, but said her constituent support is two or three to one in favor.

"The need is just so critical out there," she said.

Alaska needs more than just immediate help, Kitka said.

"We need to have immediate relief, but we also have to invest in our state and our citizens," she said.

Palin's new energy advisor, Steve Haagenson, is now working on a long-term energy relief, scheduled for release prior to the next regular session of the Legislature.

There have already been some changes to Palin's proposal, and legislators trying to get help to Alaskans are trying to craft a plan acceptable to a majority of their colleagues.

One of the most significant of those changes came from the Palin administration itself, which has switched the concept behind the $1,200 from providing energy relief to "sharing the resources of the state with all Alaska residents," said Randy Ruaro, a Palin assistant working on resource issues.

Ruaro said that while a long-term plan is in the works, sharing the state's money with its residents would give them the opportunity to use it to pay their higher energy bills, or whatever else they wanted to spend it on.

Anchorage and Mat-Su legislators have expressed concerns with programs that discriminate against the urban lifestyle, which has been hit hard by rising gasoline prices.

People have gone from $30 fill-ups to $300 fill-ups, said Rep. Mike Hawker, R-Anchorage.

One significant change has already been made to the bill, newly reconfigured as a "resource" rebate.

A House committee has changed its version of the bill to mirror the state's existing resource rebate plan, the Permanent Fund dividend.

While Palin's initial plan had been to give checks to everyone who had been in the state for six months, the House Community and Regional Affairs Committee changed the criteria to qualify to mirror that of the dividend. That means the payment would go only to people who had been in the state in all of 2007.

That may exclude 30,000 or more residents new to the state in the last year, but reduce the cost of the payments by tens of millions of dollars.

The committee's plan would include the payments as a separate line on the Permanent Fund dividend, and save administration costs.

At the same time, other committees are considering big boosts to the state's Power Cost Equalization program to cover bigger bills. It also would include Fairbanks under the program for the first time.

Hoffman also proposed expanding a program that helps low-income homeowners with heating bills, having it include middle income residents as well.

• Contact reporter Pat Forgey at 586-4816 or patrick.forgey@juneauempire.com.



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