Alaska pays residents $1,200 for high energy costs

ANCHORAGE, Alaska, Aug 8 (Reuters) - Alaska’s legislature late Thursday approved a one-time $1,200 payment to nearly every state resident as a way for them to handle the highest energy prices in the United States.

The payments are in addition to the usual annual dividend from the state’s oil trust fund.

The legislature also repealed the state’s 8-cents-per-gallon gasoline tax for a year.

When coupled with annual payments Alaskans get from a trust fund related to the state’s oil and natural gas production, nearly every adult and child is expected to get $3,200 or more this October.

Gov. Sarah Palin said the so-called “resource rebate” of $1,200 will help Alaskans deal with escalating energy costs.

Alaskans pay an average of about $4.65 a gallon for gasoline, and in some rural areas it costs about $10 a gallon, while the national average is about $3.85 for a gallon of regular, according to travel group AAA.

Rep. Woodie Salmon of Beaver, a tiny Athabascan Indian village, said the payment -- worth six cords of firewood or 200 gallons of heating oil -- is eagerly anticipated in rural Alaska.

“If I vote against this $1,200, I’ll assure you, there will be no Athabascan in this chamber next year,” said Salmon, a Democrat, in floor debate earlier this week.

Others worried about the precedent payments set for future legislators and the raised expectations of residents.

While he ended up voting for the special payment, Fairbanks Republican Mike Kelly said the payment was “a way to get all of these people on the dole.”

Kelly said residents might expect the extra money even though it’s offered as a one-off.

“What we’re going to do is pass out more candy and give out more morphine shots.” (Editing by Bernie Woodall and Marguerita Choy)