Senate Bipartisan Working Group

SB 14 extends for an additional two years to August, 31, 2011, the termination date of the 1-year suspension of the motor fuel tax imposed by the governor in 2008 under SB 4004.  This bill extends motor fuel tax relief of approximately $0.08 per gallon to Alaska consumers and businesses which continue to pay some of the highest prices for motor fuel in the nation.  Initiated at a time when oil prices were spiking to all-time highs, the motor fuel tax relief afforded to Alaskans in 2008 is still important in sustaining and stimulating the Alaska economy in the national economic recession which is expected to last several years. 

Fuel costs affect almost every aspect of Alaska life in work, recreation, vacations,  private, and business use.   High fuel prices affect the cost of all goods and materials transported by sea, air and road.  Most goods have to be shipped very long distances to Alaska.  Every year hundreds of thousands of shipping containers carrying goods Alaskans use every day must be shipped by sea and road over 2,000 miles to Anchorage, the largest population center and distribution point to other parts of the state.  From there over 80% of goods distributed to many Alaska communities can be reached only by air transportation.  The reverse is true of Alaska’s exports and seafood shipped south or overseas.   

Air and cruise travel which is critical to the Alaska tourism industry is declining in the current recession.  Bookings are down and airlines and cruise lines are cutting back due to decreased demand as they continue to struggle with high costs of fuel. Extending the suspension of the motor fuel tax under SB 14 will have major impact on the enormous quantities of fuel consumed in the transport of goods and people in Alaska. It will encourage cargo carriers to maintain flights and cargo hubs in Alaska and it will encourage air and cruise lines to reduce fares to stimulate demand.