2008-07-09                     Senate Journal                      Page 3147
SB 4004                                                                                                                       
SENATE BILL NO. 4004 BY THE SENATE RULES COMMITTEE                                                                              
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
                                                                                                                                
             "An Act suspending the motor fuel tax; and providing                                                              
          for an effective date."                                                                                               
                                                                                                                                
was read the first time and referred to the Finance Committee.                                                                  
                                                                                                                                
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, Department of Revenue                                                                                       
                                                                                                                                
Governor's transmittal letter dated July 8:                                                                                     
                                                                                                                                

2008-07-09                     Senate Journal                      Page 3148
Dear President Green:                                                                                                           
                                                                                                                                
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am                                                      
transmitting a bill that would provide a one-year suspension of the                                                             
state motor fuel tax. The tax applies to gasoline, aviation gasoline,                                                           
aviation ("jet") fuel, and marine motor fuel.                                                                                   
                                                                                                                                
Alaskans face some of the highest fuel prices in the nation.  These                                                             
high prices affect passenger travel and the cost of just about                                                                  
everything we use or consume. Alaskans are particularly vulnerable to                                                           
high fuel costs.                                                                                                                
                                                                                                                                
Most goods have to be shipped very long distances to get to store                                                               
shelves in Alaska. Each year, hundreds of thousands of containers                                                               
carrying items Alaskans use every day have to be shipped by sea or                                                              
truck 2,000 miles or more just to reach our population center in                                                                
Anchorage. From there, goods must be shipped again to the many                                                                  
Alaska communities (roughly 82 percent) that can only be reached by                                                             
air transportation. The reverse situation is also true as containers                                                            
carrying Alaska's exports and seafood are shipped south or overseas.                                                            
                                                                                                                                
This movement of goods over long distances consumes large amounts                                                               
of fuel and subjects Alaskans to a heavy impact from fuel price                                                                 
increases.                                                                                                                      
                                                                                                                                
Similarly, as aviation gas and jet fuel prices rise, air carriers are forced                                                    
to increase prices for passenger service. This hinders the ability of                                                           
Alaskans to move between our remote communities and urban areas.                                                                
                                                                                                                                
Suspending the motor fuel tax is a step towards providing some relief                                                           
to Alaskans and the Alaska economy. Some examples of benefits are:                                                              
                                                                                                                                
     · An Alaska fisherman putting around 2,000 hours a year on his                                                             
          engine and generator and using about 11 gallons per hour                                                              
          would save about $1,200.                                                                                              
     · A regional air carrier using 3,500,000 gallons of aviation                                                               
          gasoline a year would save roughly $164,500.                                                                          
                                                                                                                                
                                                                                                                                
                                                                                                                                

2008-07-09                     Senate Journal                      Page 3149
It is important to note that while suspending the motor fuel tax will                                                           
provide a temporary reduction in the cost of motor fuel, we still need                                                          
to work together to seek additional solutions to the energy cost issues                                                         
facing us.                                                                                                                      
                                                                                                                                
I urge your prompt and favorable action on the bill.                                                                            
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Sarah Palin                                                                                                                     
Governor