Alaska local and state governments rely more heavily on natural resources for revenue than in any other state, according to a Tax Foundation report based on U.S. Census Bureau data collected for the fiscal year running July 1, 2006 to June 30, 2007.
The report ranks the states by reliance on tax revenue from six sources - property taxes (real estate, cars, boats, etc.), general sales taxes, selective taxes (motor vehicle fuel, tobacco, etc.), individual income taxes, corporate income taxes and license/other taxes (natural resources and others). Of course, Alaska doesn't have a state individual income tax or a statewide sales tax.
Here's where the 49th state gets its local and state government money:
• General sales taxes, 3.7 percent
• Selective sales taxes, 6.3 percent
• Corporate income taxes, 16.5 percent
• Licenses and other taxes, 52.6 percent
Other states rich in natural resources also make the top-10 list for heavy reliance on taxes from development of those resources: Wyoming, North Dakota, Montana, Oklahoma, New Mexico and so on.
The report notes that states with plenty of natural resources generally can charge high taxes without worrying that they'll drive producers away, because the resource is fixed in-place.
Just the same, legislators considering a new gas tax structure in advance of a large-diameter natural gas pipeline say there's a fine line between taxing enough to net a fair return for the state, and taxing so much that companies do, indeed, take their business elsewhere.
The full report is available at www.taxfoundation.org/publications/show/25301.html
Have you ever wondered what the mushers eat while out on the trail?
"Plenty of resources" is a relative determination. While the resources may be fixed in place, the money is not. Where there are alternatives, producers respond to government price signals and others generated by the market in determining which resources to pursue. As a recent New York Times article makes clear, the opportunities are world wide and producers are responding to better price signals outside of Alaska. (http://bit.ly/2ZGMPK). While Alaska certainly has resource potential, so do other locations. For example, due to advances in technology, an additional 500 Tcf in natural gas resources were identified in the L48 alone from 2006 - 2008. (http://bit.ly/GX5VC). The challenge for Alaska is to improve its price signals relative to its competitors. Having resources alone will not sustain the economy. (http://bit.ly/oGFGO).