Oil revenues -- panacea for Alaska's economic woes?
They haven't yet exchanged their parkas for flowing robes or their snowmobiles for Cadillacs, but individual Alaskans these days are pocketing oil boom profits just like folks in some Middle East sheikhdoms.
The longer range questions lurking behind recent income tax rebates and distribution of state oil revenues among Alaska residents are these:
Will the state's seasonal economic roller coaster even out?
Will persistent social and economic problems (unemployment now is 11.4 percent in Alaska compared with 6.2 percent nationwide) be eased by oil wealth?
Will new sources of oil and natural gas be found to sustain Alaska's heavy reliance on non-renewable natural resources?
Legislation signed last week by Gov. Jay Hammond suspends Alaska's personal income tax (and refunds any taxes withheld during 1979) for those who have been paying such taxes for at least three years. This means 71 percent of Alaska's 400,000 residents. Those who have lived in Alaska for at least a year will also begin receiving from a state oil trust fund $50 for each year tey have lived in the state since it joined the Union in 1959.
With inflation and oil price decontrol, state revenues from royalties and severance taxes are expected to rise to $4 billion a year. On arerage, Alaskans this year are expected to receive $2,000 each from tax breaks and trust fund dividends.
Of the tax cuts and profit-sharing payments, Alaska Pacific Bank president Robert Richards says, "the impact on the Alaska economy will be direct, there's no doubt about that." They could well be "a stabilizing influence on our economy ," he adds. "The state of Alaska is awash with funds to pursue a whole array of social goods and services."
At the same time, Mr. Richards also points out that, "we're very, very dependent on oil and gas, and I think we'll continue to be." Four-fifths of all state revenues come from these sources.
Whether this will continue indefinitely, however, is a controversial issue that is far from settled. Most Alaskans are anxious for new oil and gas exploration and wish the federal government would turn over vast areas which were promised to the state.
Meanwhile, no significant oil discoveries have been made since the Prudhoe Bay find in 1968. Some 200 unsuccessful test wells have been drilled, and energy companies recently spent another $1 billion for the right to explore 514, 000 acres in the Beaufort Sea.
Alaska now produces 1.6 million barrels of oil per day, 18 percent of US domestic production.