Suspension of state gas tax questioned

Posted: Thursday, February 10, 2011

Gov. Sean Parnell wants to give Alaskans a break at the gas pump, but Alaska's U.S. congressional delegation and some legislators are blasting the plan as bad for Alaska and likely to be expensive for Alaskans.

"I believe some of my congressional colleagues would take a dim view of such an action," said Sen. Lisa Murkowski, R-Alaska.

Alaska currently gets more back from federal gas taxes than it puts in, but that could be at risk if Alaska eliminates its gas tax, according to Meredith Kenny, Rep. Don Young's press secretary.

"Suspending the state gas tax could absolutely pose a challenge in terms of convincing other members that Congress should continue its investment in Alaska's infrastructure," she said.

Young is a Fort Yukon Republican.

Parnell has maintained with Alaska's big savings accounts, it shouldn't be taxing its residents.

"Government that taxes least, taxes best," he said.

In recent years the motor fuel tax, 8 cents per gallon for auto fuel and lesser amounts for planes and boats, brought the state about $42 million.

Alaska's gas tax is the lowest in the nation, with most states paying 20-30 cents per gallon. All those amounts are in addition to the federal highway tax of 18.4 cents per gallon.

"Motor fuel taxes take people's money, and state government doesn't need it," Parnell said.

Key legislative transportation leaders are also expressing the same concerns as the federal delegation about the consequences of suspending the gas tax.

"The feds have been telling us for quite some time that we have to be pulling our fair weight," said Rep. Peggy Wilson, R-Wrangell, who chairs the House Transportation Committee.

Sen. Linda Menard, R-Wasilla, a member of the Senate's Transportation Committee said helping out residents filling their tanks might be viewed badly in Washington, D.C.

"Sometimes it's just how it's perceived," she said.

Given the amount of money Alaska gets from the federal government, that could be costly, she said.

"I want to support the governor, but I have all kinds of questions," she said.

Kenny said Young commended Parnell's goal of trying to relieve Alaskan's pain at the pumps, but that Alaskans receive more than they put into the federal highway trust fund due to the funding formula that favors the state.

Ending the gas tax could be one of the factors putting that at risk, Kenny said.

"Keeping that formula could be a difficult sell in the reauthorization," she said.

"The low tax levels, combined with the elimination of the gas tax, state budget surpluses, and the changing tide in Congress in regards to funding projects of interest could all be factors."

Murkowski said if Alaska doesn't have a gas tax it would be tougher to get money for the state.

"The state would be forfeiting about $40 million in state transportation funding, while at the same time asking the delegation to advocate for more federal transportation dollars," she said.

The federal transportation bill up for reauthorization, SAFETEA-LU gives Alaska extra money because it is an infrastructure-poor state that needs extra help.

It's difficult for the delegation to assert that Alaska needs more money when it contributes little itself and is seeking to reduce that, Hasquet said.

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