Alaska’s Oil Windfall
Alaska has a big vested interest in high oil and gas prices.
Oil revenue accounts for 90% of the state’s tax haul. So its budget swells and oil royalties gush into a special state investment fund — the only one of its kind in the United States.
And that can translate into windfalls for residents, who share in the oil bounty through annual dividends paid by the fund and, in boom times, direct payments from the state.
For example, when oil and gas hit record highs in 2008, residents received $3,000 checks, twice what they normally get.
“Things become much easier for the state when oil prices are high,” said Gerald McBeath, a professor at the University of Alaska at Fairbanks. “It makes it possible for them to increase funding for schools, construction and protection services.”
But, of course, there’s a dark side to high oil prices.
Alaska is a net importer of food and other consumer staples, the cost of which rise when energy prices spike. Residents get hit with outsize fuel and food prices.