Oil Report

Oil windfall leads to $3,269 payout for Alaskans

ANCHORAGE, Alaska, Sept 5 (Reuters) - Riding the wave of high energy prices, nearly every Alaskan will get $3,269 starting next week as a record payout from the state’s oil savings account is fattened by a rebate championed by Gov. Sarah Palin.

Palin, Republican presidential candidate John McCain’s surprise vice presidential pick, advocated a one-time $1,200 payment, which was approved by the Legislature last month, to help residents of the oil-rich U.S. state cope with high energy prices.

Alaska Revenue Commissioner Pat Galvin and Lt. Gov. Sean Parnell said on Friday the dividend from the Alaska Permanent Fund, which derives from oil revenue on state lands, reached $2,069 in the fiscal year ended June 30.

“Alaskans will receive an especially large chunk of change this year,” Parnell told a news conference in the governor’s Anchorage office.

The McCain campaign has used the $1,200 payout as a sign Palin is an economic conservative who believes in leaving money in the hands of individuals and not government.

The dividend is usually paid in October, but at Palin’s direction, the Department of Revenue said it accelerated the payout and coupled it with the $1,200 payment.

The Alaska Permanent Fund was created by a 1976 amendment to the state constitution and it has paid out annual dividends from investment earnings. Until this year, the biggest dividend was the $1,964 paid out in 2000.

Energy costs in rural Alaska are especially high, with fuel costs in some villages reported to have topped $10 a gallon compared to $3 to 4 a gallon in the continental United States.

The rebate was part of a package costing nearly $1 billion. Alaska’s current budget surplus, a result of high oil prices and a 2007 rewrite of the state’s production-tax system spearheaded by Palin, is being used for the program.

“The governor has, along with the Legislature, seen fit to redistribute that wealth back to the people now that it’s in monetary form,” Parnell said. “People can spend their money better than government can.”

The state may have another surplus this year.

The Palin administration had assumed prices of North Slope crude oil at about $90 a barrel in its fiscal 2009 budget, but if prices average $110 -- as they do now -- Alaska would wind up with a $4 billion surplus, Galvin said.

To qualify for a dividend, individuals must have lived in Alaska for a year or be infants born in Alaska during the past year and have filed an application with the Department of Revenue by March 31. (Editing by Daisuke Wakabayashi and Peter Cooney)