By Fester:
I am not worried about Sarah Palin or Bobby Jindal or any other Republican governor of significant oil producing states. They were elected during times of rising hydro-carbon prices, and thus rising local tax revenues that were not being paid by their constiuents. Few choices had to be made. Lots of services could be provided and effectively someone else was paying for those services. As Mudflats notes, it is an easy way to be locally popular:
After renegotiating the tax rate with oil companies, and using the gain to hand out $1200 checks to every man, woman and child in the state, some Republicans in Alaska were screeching �Socialism!� and comparing her to Hugo Chavez. All this, of course, was back before Palin became a household name outside Alaska�s borders. Most Alaskans thought this whole plan was just great. There were those on the left and those on the right that disagreed with Palin�s tactics, but it was a good lesson in how to become popular. Hand out cash....
The recent rise in oil prices to roughly $70 per barrel has relieved some of the pressure on the big-oil producing states' budgets. $70 oil produces a whole lot more revenue for states than $40 oil. No big surprise there. One would expect that governors whose budgets depend on oil revenue would rather not have to make politically painful choices on whether to raise taxes/fees or cut popular programs. One would be wrong. Again via Mudflats:
Hannity: �The price of oil is going up again. It�s not quite at $140 a barrel, but it�s on its way up to $70 and $80�
Palin: Yeah, well and I thank God it�s not at $140. You know people say, �Hey, Alaska! 85% of your state budget is based on the price of a barrel of oil. Aren�t you glad the price is going up?� I say, �No!� The fewer dollars that the state of Alaska government has, the fewer dollars we spend. And that�s good for our families and for the private sector.
But again, while this is either amazingly stupid or intellectually dishonest, it does have a nice political rationale. Gov. Palin has no influence on oil prices, and the Alaska legislature will not let her touch the oil tax rates, so the state of Alaska will continue to collect higher revenue derived from higher oil prices. However she gets her message out of being a hypocritical 'small government' type to the primary electorate. So amazingly cynical, but politically reasonably effective.
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