Saturday, December 26, 2015
The free ride is ending
And the people of Alaska may soon find themselves once again paying income and other taxes that were ended when the oil bonanza began. And is now showing signs of passing into history.
Oil money no longer pays the bills here.And no doubt those who have become dependent on the oil powered free ride will howl in despair but all good things must end. Sadly their kind will linger and be a problem for a long time.
The governor, facing a profound fiscal crisis, has proposed the imposition of a personal income tax for the first time in 35 years. State lawmakers, who recently moved into a palatial new office building here, where they work when not toiling in the far-off Capitol in Juneau, are now seeking less costly digs.
And a state budget that was a point of Alaskan pride — and envy from around the nation — lies in tatters as revenue that flowed from selling crude oil from Prudhoe Bay over the past four decades has been swept away.
With oil prices down along with oil production, the state is facing an Alaska-size shortfall: Two-thirds of the revenue needed to cover this year’s $5.2 billion state budget cannot be collected.
Many Alaskans are not old enough to recall times this bad. This is the nation’s least-taxed state, where oil royalties and energy taxes once paid for 90 percent of state functions. Oil money was so plentiful that residents received annual dividend checks from a state savings fund that could total more than $8,000 for a family of four — arriving each autumn, as predictable as the first snowfall.
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