KENAI, Alaska -- Soaring oil prices are bringing a gusher of new revenue to Alaska. But for most Alaskans, the new riches won't pay for the rising cost of everything else.

At first blush, Alaska might appear to be blessed just now. State officials say rising oil prices are likely to add to a budget surplus that is projected to total $5 billion in 2008, versus just $105 million in 2007. Individual Alaskans are expecting fatter dividend checks, which residents get annually from oil-field royalties. Last year, the checks were...