JUNEAU, Alaska (AFP) — However much executive experience Republican vice presidential pick Sarah Palin has gained from her 21 months as Alaska governor, it is unlike that of any chief executive in the 50 US states.
Never mind an Alaska governor's working conditions such as a state capital inaccessible by road, a vast jurisdiction of roughly 590,000 square miles (1.5 million square kilometers) and temperatures ranging from sub-zero to sizzling.
Republicans have trumpeted Palin's stewardship of Alaska since she was elected governor in 2006 as evidence that she is capable of serving as the deputy commander-in-chief.
Enjoying a soaring approval rating amongst Alaskans, Palin has carved out a reputation as an efficient administrator who has cut spending while presiding over an economy that enjoys a massive 5 billion dollars surplus.
Yet analysts note that Alaska's oil-rich status and federal funding have effectively meant Palin has been able to govern without making the sort of thorny fiscal decisions that burden leaders of other states.
Thanks to the largest oil field ever discovered in North America, the state imposes no sales or personal income tax. But as a result economic development that helps fill coffers in other states is a drain for the Alaska treasury.
Economists call it the "Alaska disconnect." When new development occurs in Alaska, as elsewhere, it demands new roads, schools, police and other social services infrastructure. If the development is a small business, neither it nor the residents working for it pay any state taxes.
"The more we grow the worse the state's fiscal situation," said Gunnar Knapp, professor at the University of Alaska Anchorage's Institute of Social and Economic Research. "This is totally covered up at the moment by the fact that we're awash in oil dollars."
Without the surging oil prices of the past decade, Alaska might well have been forced into the red, Knapp believes.
Even Palin's fellow Republicans in Alaska are critical of her economic policy. "She likes to cut the capital budget and claims she's controlling the growth of government. Nothing could be further from the truth in my opinion," said Bert Stedman, Republican co-chair of the Alaska Senate Finance Committee.
Oil dwarfs other revenue-generating industries in Alaska, accounting for 8.9 billion dollars, or 65.7 percent of total state revenue in the fiscal year that ended June 30 and 81 percent when the 2.5 billion Alaska received from the federal government that year is excluded, official figures show.
All other state taxes and fees primarily from the commercial fishing, tourism and, thanks to the fairly recent rise in gold prices, mining, totaled only three percent of state revenues, 535 million dollars, for the same period.
The other pieces of Alaska's economic puzzle are the federal government, which accounts for about 18 percent of state revenues, and Alaska's 35 billion dollar Permanent Fund, which was set up to manage and invest oil revenue.
Stephen Haycox, a history professor at the University of Alaska Anchorage described Alaska as a "colony."
"One third of the economic base is oil; another third is federal spending. The economy is extremely narrow and highly dependent," Haycox told the New York Times. "It's not to say that Alaska is a beggar state, but it certainly is true that Alaska is dependent on decisions made outside it, and over which Alaskans don't have great control."
Income earned from Permanent Fund investments are used almost exclusively to pay Alaskans for, in essence, being Alaskans.
Under a formula based on the past five years' investment revenues all Alaskans will get just over 2,000 dollars each later this month.
The uncertainty of the economic mix provides a unique governing challenge. When oil prices were below 20 per barrel in the years immediately before and after the turn of the century the state lived off its savings.
Tony Knowles, a Democrat and governor from 1994 to 2002, his two terms in office warring with a Republican legislature on the size of budget cuts and still needed half a billion from savings to balance the books some years.
Knowles, who now works with the George Kaiser Family Foundation on energy issues, said merely that Alaska has "unique challenges." Knapp, the university economist, had a slightly different view. "Alaska is a very peculiar and unusual kind of place for an American state," Knapp said.
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