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 the state is mandated to spend them on specific programs or projects. Examples include federal funding for Medicaid, Medicare and transportation projects, and earnings from the Permanent Fund and special-purpose savings accounts. In FY2012, nearly half of Alaska’s budget (46%) was restricted in use.
Approximately ninety percent of the general fund comes from oil revenues. Only 10% is made up of non-oil taxes and fees and a small portion of unrestricted investment income. The dilemma the state will face in the future is finding new revenue sources to replace at least a portion of oil revenue in the general fund and maintain services for the long term. The problem may be compounded by declining federal funding, which will put pressure on state coffers as people look to the state to continue providing these services.