NCPA - National Center for Policy Analysis


August 14, 2006

Alaska is the only state that can fund government services by exporting its tax burden via energy taxes to the other states, says the Wall Street Journal.  Some 85 percent of the revenue Alaska collects comes from oil severance taxes -- a levy applied to the 850,000 daily gallons of North Slope oil that travels via pipelines such as BP's to the rest of the nation.  As a result, Alaska is only one of nine states without a state income tax, and one of only two (along with New Hampshire) with no income or statewide sales tax. 

And here's the political rub, says the Journal: Alaska is also the largest state recipient of federal spending earmarks:

  • The Tax Foundation says Alaskans receive nearly $2 of income transfer from the taxpayers of the other 49 states for every $1 they pay in taxes each year.
  • Ron Utt of the Heritage Foundation calculates that Alaska gets $5 of federal highway spending for every $1 in gas tax money it pays to the federal trust fund -- twice as much back as any other state.

Year after year the 49th state manages to secure federal dollars for skating rinks, sea otter recovery grants, berry research, the Arctic winter games, native-Alaskan museums and miles upon miles of roads through deserted areas of the state, says the Journal.  The reason: The state's Congressional Members have so much seniority that they sit on the thrones of the most powerful spending committees:

  • The state's lone House member, Don Young, is chairman of the Transportation Committee.
  • Alaska Senator Ted Stevens is the number two Republican (and former chairman) on the Appropriations Committee, the Grand Central Station of earmarks.

Source: Editorial, "Alaska and You," Wall Street Journal, August 14, 2006.

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