Why not just cut the budget?
Alaska’s operating budget has been increasing at about 9% per year for the last decade and is expected to continue on this path. Even with tighter budget control, the budget will need to increase as population increases and to adjust for inflation just to maintain current levels of service. Increases in future obligations due to […]
What about new oil and gas discoveries?
New oil and gas exploration and development – including oil produced offshore and on federal lands – may help fill the pipeline and create jobs, but will do less to fill the budget gap. Here’s why: Oil found on federal lands won’t save us. There is huge potential for developing oil reserves on federal lands […]
What is a fiscal gap?
What is a fiscal gap? Is it more than just a fancy way to say deficit? Any government can run a deficit in a bad year when revenues falls short of expenses. Bad years happen, especially in a down economy when tax receipts – or in Alaska’s case, oil prices – are lower than expected. […]
If oil production is declining already, how come Alaska has a budget surplus?
The amount of revenue the state receives from oil resources depends not just on the amount that is pumped through the Trans-Alaska Pipeline, but also on the price of that oil. In recent years, there have been dramatic increases in oil prices worldwide, resulting in several years of budget surplus for the state. However, even […]
Won’t offshore oil and gas just replace revenue from Prudhoe Bay?
Offshore oil and gas development, like opportunities in and will bring some revenue to the state, but because these resources are on federal land, at least half the revenue will go to the federal government. Additionally, offshore resources are more expensive to produce so the amount of money oil companies will pay out in taxes […]
What about mining, fishing, timber and other non-oil natural resources?
Around 95% of all revenue that comes to the state comes from one of three sources: oil, Washington DC, or investment income. Mining, fishing, timber and other non-petroleum natural resources are important to our economy and to the local governments in which they operate, but they provide relatively little revenue to the state.
What if we don’t have enough revenue to cover the budget?
In years when the cost of the budget is more than total revenue the State can borrow from its savings—primarily the Constitutional Budget Reserve. In 2011 the had $10.4 billion in it. The Director of Legislative Finance has estimated that if the state continues on its current course we will need to begin drawing on […]
Why do we always talk about the General Fund if it’s only half the money?
It’s a lot of the money! It is used to account for all financial resources except those required to be in another fund It is the state’s primary operating fund – the source of funding for basic government services.. It’s flexible. Lawmakers can make decisions about how the fund is spent. General fund revenue can […]
What is the General Fund?
The general fund is Alaska’s major source of discretionary funding—the money available to pay for government operations, basic services and capital improvements. Because the legislature has the most direct control over the general fund, it provides the most flexibility for spending on evolving state priorities, including saving. All other funds are designated or restricted, meaning […]