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Alaska editorial: Another gov't handout

Posted: Thursday, December 29, 2005

The following editorial first appeared in the Fairbanks Daily News-Miner:

As the Dec. 30 dates nears for the official release of bills prefiled for the coming legislative session, there's at least one idea that should be stopped at the starting line. Sen. Gene Therriault's proposal to provide relief from high fuel prices by giving $250 to every Alaskan who qualified for an Alaska Permanent Fund dividend this year is a nice one, but needs more work.

For starters, it isn't the role of government to help pay for the increased cost of goods just because the cost of those goods rises. It is appropriate for government to help in times of crisis, but high fuel prices hardly qualify for such a broad payout. For some families, the high prices may indeed have caused a crisis, but a federal energy cost assistance program already exists for those who can demonstrate a need.

While the price of fuels has risen sharply, the fact remains that many families can handle the increase with a little adjustment. Does a family of four with a household income of $80,000, for example, really need $1,000 of fuel assistance? Probably not. Do the two children, who would each receive $250 under Sen. Therriault's plan, actually raise the cost of that household's fuel bill by that amount of money? Unlikely.

The fuel price rebate is one of three components of the senator's proposal to spend about $170 million of the $1.2 billion budget surplus on energy-related items. The other two parts include $5.7 million to the state's long-standing Power Cost Equalization program, which helps rural areas pay their naturally high fuel costs, and $10 million for the state's Low Income Weatherization program.

The $250 per-person fuel price rebate is the priciest part, however. With just over 600,000 people receiving a dividend this year, Sen. Therriault's rebate would cost an estimated $150 million.

Sen. Therriault says his idea is for a one-time payout. But people love getting money, which leads to a worry that instituting a widespread rebate now will lead for calls to continue it in the future. Alaska already has one annual payment for everyone - remember the Alaska Permanent Fund dividend?

And the senator's desire to have this be an isolated payout is actually the source of the problem of giving money to people who might not need it. He says he does not want to create a new government program, with all its hiring and administrative needs, for just one year, and that makes sense. So he settled instead on the idea of using the permanent fund roster and making no distinction based on a person's need for the fuel rebate. He sees giving money to people who don't need it as an unfortunate but necessary consequence of trying to help those who do.

That sounds like an idea in need of a little massaging.



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