OPINION: There are bigger problems than filling our gas tanks

The Anchorage Daily News recently reported that the average sales price for a house in Anchorage in 2021 was $420,000. Accordingly, anyone who buys, sells, or for that matter, owns a house, would appear to be in pretty good financial shape. And “pretty good,” means “could be doing a lot worse.” More on that below.

There is currently a proposal in Juneau to pay every Alaskan a $1,300 “energy relief check,” working like a supplemental Permanent Fund dividend, because gasoline prices are high right now. However, an extra $50 per week for gas is probably not a big problem for someone who sold or purchased a house for $420,000. And gasoline prices here now are substantially less than what much of the world paid before the Ukraine war.

In Alaska, the current poverty rate is about 10%. That means of our 730,000 residents, 73,000 earn less than $16,000 per year, or $33,000 for a family of four.

Poverty results in poorer health, less education and work, engagement in riskier behavior — including crime — and economic insecurity. Fear of unemployment and scarcity is oppressive. People, to be at their best, need reassurance that the future will not be needlessly cruel.

Income inequality gives the wealthier control over others, and undermines the fairness of economic and political institutions.

The PFD program in Alaska has reduced poverty. It has been touted as a positive example of universal basic income, where all citizens receive the same amount from the government without means testing.

There at least 30 other examples in the United States of guaranteed minimum income, government payments that are subject to means testing. These occur in various states, cities, and counties. The payment amounts range from $200 per month, Chelsea, Massachusetts, to $1,200 per month, Los Angeles. The duration ranges from one year, many places, to five years, Hudson, New York.

In these places the income is directed to a limited number of low-income participants who need it, for them to spend as they see fit. In these places the income has reduced poverty. And yes, local citizens fund it either through direct taxation or reduced alternative public services.

But the big difference between Alaska and these other places is that only in Alaska does everyone receive it. In Alaska, it goes to many people who do not need it.

The portion of the money that would go to pay energy relief checks and dividends to wealthier residents could be used for housing, health, food, energy and education assistance for lower income Alaskans. Had Alaskans paid taxes over the past 40 years and invested in public transportation, they would have been less vulnerable now.

As the Daily News editorial board recently pointed out, all three gubernatorial candidates have endorsed the relief check, and as the board also intimated, this is election pandering of the first order.

There are three options for the money: saving it, enhancing the ability to fund public services for future generations; using it to ameliorate poverty; or paying a relief check. The relief check would be the option that transfers the most money to people who need it the least. This is true for the regular dividend, as well.

Someone once observed that when everyday people complain that they are starving, ask them if they have eaten that day. If they have, they are not starving.

There is an additional dimension to this. Gasoline prices are high because Russian oil has been embargoed. This hurts Russia and helps the Ukrainians. Small sacrifices keep us mindful and supportive of the oppressed.

There are a lot bigger problems out there than having to spend more to fill your gas tank.

Roger Marks is an economist in private practice in Anchorage. From 1983-2008, he was an economist with the State of Alaska Department of Revenue Tax Division.

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