The Pew Charitable Trusts

Budget-troubled states could be forgiven for envying Alaska, where surging oil prices are producing a cash windfall so huge that lawmakers and the governor don't know what to do with it.

Revenue estimators on Wednesday (April 6) delivered the news that the state will have a $3.4 billion budget surplus - on top of more than $11 billion it already has in savings and another $1 billion that lawmakers were considering socking away this year, according to the Anchorage Daily News .

Oil prices are responsible for the eye-popping budget surplus in Alaska, which ranks 47th in the United States in population.

While Alaska charges its residents no statewide sales or income taxes, it relies far more heavily than other states on excise taxes levied on natural resources. Fully 90 percent of its general fund revenue comes from oil.

While other states debate which programs to cut or which taxes to hike because of budget shortfalls, the question in Alaska now becomes how to spend the money. The Daily News notes that lawmakers already were planning a bigger-than-usual budget before Wednesday's revenue numbers came in, and now some of them are debating with the governor over whether the excess money should be devoted to new construction projects, more savings or tax cuts.

"Really, how much (money) is enough?" says Governor Sean Parnell, who prefers cutting oil taxes and building up savings for a potentially less-gilded time in the future.