Palin Helps Alaska Get Rich Off Oil While the Rest of the Country Suffers

Welcome to the People's Republic of Alaska, where every resident this year will get a $3,200 payout, thanks in no small measure to the efforts of Sarah Palin, the state's Republican governor. That's $22,400 for a family of seven, like Palin's. Since 1982, the Alaska Permanent Fund, which invests oil revenues from state lands, has paid out a dividend on invested oil loot to everyone who has been in the state for a year. But Palin upped the ante by joining with Democrats and some recalcitrant Republican state legislators to share in oil company windfall profits, further fattening state tax revenue and permitting an additional payout in tax funds to residents.

No wonder she is popular with voters in a state whose residents pay no income or sales taxes but are blessed with state coffers rolling in cash at a time when all other states are suffering. Indeed, when the oil companies pay more taxes to the state of Alaska, they get to write that off against their federal tax obligation, leaving the rest of us to make up the shortfall.

The state of Alaska owns most of the oil-producing land and was getting upward of 85 percent of its budget from the oil companies that lease the fields, even before Palin helped increase the state's cut. While other states fire schoolteachers because of the economic downturn, Alaska has, as Palin indicated in accepting John McCain's offer to join him on the GOP ticket, more money than it knows what to do with. In a display of plucky arrogance at her coming-out press conference, Palin boasted deceptively that if Alaskans wanted that infamous bridge to nowhere, "we'd build it ourselves."

She originally had supported having U.S. taxpayers finance that boondoggle, before McCain and others in Congress blasted it.

Not that I blame Palin for wrangling for her state a bigger cut of oil company windfall profits; it's just not an option that will work wonders for states without oil. Of course we can remedy that by having a federal windfall profits tax of the sort that Barack Obama dared propose, and which McCain and his fellow congressional Republicans have managed to quash. Their argument, rejected quite pointedly by Palin for Alaska, is that it would discourage oil companies from investing in boosting oil field yields.

McCain derided Obama's call for the windfall profits tax, saying it would "increase our dependence on foreign oil and hinder exactly the same kind of domestic exploration and production we need." I am far more interested in how McCain handles the contradiction between his and Palin's position on windfall oil profits than whether he properly vetted her on her family-values commitment to the abstinence-only teenage sex education program.

Why is it a good thing for the folks up in Alaska to get a cut of exorbitant oil company profits, but not the rest of us, if we are all part of one nation? Didn't taxpayers from across the U.S. buy the place from the Russians? Isn't it our federally collected tax dollars that have been subsidizing Alaska more lavishly than any other state, both before and after the bonanza of oil?

Just witness the success of Palin, who, as mayor of the hamlet of Wasilla, hired a big-time lobbying firm intimately connected with the state's now-indicted Republican Sen. Ted Stevens and thus obtained $27 million in federal earmarks during her tenure. As The Washington Post calculated in a devastating report on Mayor Palin's assault on the federal treasury, her home town of Wasilla (with about 6,000 inhabitants in 2002 when she was mayor) received $6.1 million, or $1,000 per resident in earmarks, almost as much as Boise, Idaho, got this year with a population that is 30 times larger.

It obviously helped to have Alaska's now-indicted senator as chair of the Senate Appropriations Committee. And despite McCain's claims that Palin distinguished herself by breaking with Alaska's discredited Republican establishment in February, the governor sent Stevens a request for $200 million to support various state projects. With representatives like that, it's no wonder that Alaska, despite its oil boom, is still at the top of states subsidized by federal dollars, receiving $1.84 back from Washington for every $1 that Alaskans pay in federal taxes. (California receives 78 cents for every $1.)