The Alaska Department of Revenue predicts that during the coming fiscal year, the price of Alaska oil will be in the $70 a barrel range, down from the $73.86 per barrel predicted for the current fiscal year (ends June 30, 2025). The Unrestricted General Fund revenue forecast has decreased by $220 million for FY 2025 and $232 million for FY 2026.
In response to softer prices and modestly stable production, Gov. Mike Dunleavy proposes a stick-to-the-basics budget that has no frills and keeps to his pattern of tamping down the urge among legislators and lobbyists to grow government. For the seventh budget since taking office, his proposed spending is kept at about a 1% increase, far below the rate of inflation.
Dunleavy’s focus is on public safety, education, constitutional requirements, bringing new investment to Alaska, and affordability.
Through the supplemental process, he is proposing a $50 million transfer to the Alaska Industrial Development and Export Authority to help with the “Front End Engineering Design” or FEED to get the Alaska LNG gas pipeline off the ground. He is also proposing to put funds into the state’s disaster fund, which has been drained due to numerous natural disasters around the state in the past year. This would require a transfer from the Constitutional Budget Reserve.
The governor’s budget website is at this link.
Dunleavy proposes the full statutorily set educational funding with the Base Student Allocation (BSA) formula, but has not added any additional funds for education. The Legislature has added to that in the past, and the governor has, in the past, met lawmakers halfway by allowing one-time increase for education.
As he has in past years, Dunleavy will be proposing a bill that ties education funding to performance accountability. Currently, there is no accountability in Alaska’s school districts. The Democrats in the Legislature are not likely to be friendly to that legislation.
The governor is proposing to reopen the Alaska State Trooper post in Talkeetna and to purchase a plane for the Department of Public Safety.
When the Legislature gets the budget, both the Democrat-controlled bodies will be working to insert a new expense — the return of defined benefits for some state workers. The state converted to a more standard retirement program for workers in 2006 but still owes the former workers in the now-defunct defined benefits program over $6 billion.
Revenue deeper dive
Unrestricted General Fund revenue, before accounting for the operating transfer from the Permanent Fund Earnings Reserve, is forecast to be $2.6 billion for fiscal year 2025 and $2.4 billion for FY 2026, respectively. That is a reduction of about $200 million for next year’s fiscal year.
The Permanent Fund is set to transfer $3.7 billion to the General Fund for FY 2025 and $3.8 billion for FY 2026, respectively. These amounts include funds available for general government spending and annual payment of dividends to Alaskan residents.
The Permanent Fund transfer once again is a large source of funding to the General Fund, contributing 59% of Unrestricted General Fund for FY 2025. Based on the Fall 2024 Revenue Forecast, the operating transfer is projected to range from 61% to 64%, for each of the next 10 years.
In FY 2024, the Alaska North Slope oil prices averaged $85.24 per barrel. The Fall Revenue Forecast incorporates the most current indicators from the financial markets and is based on an annual average ANS oil price. The oil price for FY 2025 is projected at $73.86 per barrel and $70 for FY 2026, respectively.
The Department of Revenue forecast assumes that annual average prices will be within a range of $68.00 to $73.00 per barrel (nominal) for the remainder of the forecast period.
In FY 2024, ANS oil production averaged 461,000 barrels per day. ANS oil production is expected to edge up to 466,600 barrels per day for Fiscal Year 2025 and 469,500 for Fiscal Year 2026, respectively, before peaking to 656,900 barrels per day in 2034.
In comparison to the DOR’s Spring 2024 Revenue Forecast, which was released in March 2024, the ANS oil price forecast decreased by $4.14 per barrel for FY 2025 and $4.00 per barrel for FY 2026.
The oil production forecast decreased by 10,200 barrels per day for FY 2025 and 12,600 barrels per day for FY 2026. Driven by the revised outlook of oil price and production, the Unrestricted General Fund revenue forecast decreased by $220 million for FY 2025 and $232 million for FY 2026.
The Fall Revenue Sources Book is published every year to give predictive information about state revenues, as well as a forecast of state revenues over the next 10 years. The revenue forecast is available on DOR’s website at www.tax.alaska.gov.
I suggest scrapping that 50 million or AIDEA. The LNG pipeline is a black hole that they keep throwing money it. It is time to shut down the Alaska Gasline group. If a private entity wants to commit to the pipeline then maybe support them somewhat but otherwise quit wasting the money on this dream.
I second that motion
I third that motion
My prediction is that the uni-party with not tighten the states belts, but will attack the PFD like rabid wolves.
My perdition is that the uni-party with not tighten the states belts, but will attack the PFD like rabid wolves.
We did very well even when oil was $7.00 a barrel. It wasn’t until Tony Knowles began the huge expansion of the welfare state in Alaska that revenue became a problem, then with Wild Bill Walker it became even worse. And with the socialists in control in Los Anchorage and Juneau, those political carpetbaggers just want more and more money to throw at typical failed socialist programs (please see Los Anchorage Mayor’s plan to spend more on bums), it will only become worse.
not sure the ex-gop governor on the anc dock project ever finished his job
I would rather see the LNG pipeline be built, so Alaskans can continue to get royalties from it. The state needs to reduce the handouts to public assistance programs that are being abused and to resize unnecessary government agencies. Of course, the first things that the Dems are going to do is go after the PFD.
The APFC budget with 67 employees costing us Alaskans 22 Million dollars in their wages & benefits is one place to cut!. That averages $328,358.00 per year wage to all those 67 employed over there & add another
$ 250,000.00 for travel… to where? Please Alaskans wake up? They also are changing their own bylaw Art. II section 11 ( Bonding ) to not be Bonded ! This bonding is for the states protection & yours and mine!
They don’t want to be accountable ! Btw this comes from recommendation of a Ast. Attorney General opinion that they don’t have to follow Statutory Law AS 39.15.010-100 ! I say a class action to stop them ! Liberty Ed
Our old “friends” stutes, fields, ,Claman and Wielechowski are already getting the hoses ready to suck out every penny of the PFD and siphon it off to their liberal cronies
This budget is very far from balanced. It draws on one-time savings that seem unlikely to be easily or soon replaced. Yet these are not the economic times to draw down savings. We have had relatively high and stable oil prices and high investment earnings. Prudent leaders, if we had any in the executive and legislative branches coming to Juneau next month, would use this period to build savings rather than spend them. This would be the time – the very best time – to reduce annual state spending by between $1.5 billion and $2.5 billion.
The income component of this budget roll-out is in no small part merely conceptual. No bank would loan money against it as it’s anything but proven. This is an ifs and buts budget seemingly intended to fool Alaskans. Not only will it not fool Alaskans, it won’t even fool the far-left, tax and spend press. We can see here the unsurprising evidence that it did not fool Must Read Alaska.
The lack of leadership seems likely to focus everyone on new broad-based taxes, elimination of the PFD, and a continued exit from Alaska of people who want to work and create jobs in the Alaska private sector. A dramatic increase in public employee retirement benefits would greatly exacerbate the impacts of these weak decisions. This budget, coupled with the nature of the incoming House and Senate Majorities leave all Alaska Republicans very discouraged. Why would anyone invest in an Alaska business until state government reveals some fiscal responsibility?
Yes we need Vivek & Elon to do a D.O.G.E on Alaska it would be money better spent then the 50 Million on FEED !
Does back to basics include following statute…? Can anyone say statutory dividend?
Daryl did you talk to the PFD mangers about that last Weds.,Thrus. at the APFC meeting in Juneau ? If you did I didn’t here you! But you should take the time to hear the public comments to them , our APFC Trustees & staff on day two was the best of greed I ever have witnessed! Liberty Ed
You want a defined retirement cool when you retire you can’t leave the state not even for 60-90 days. How many retired with a defined retirement don’t even live here anymore?
Thanks I love this statement…For people who DO receive their PFD, they must stay here..Many claim their residency to another state as well…(by voting in another state)
70 a barrel oil is a stretch……set the budget at 65 and you can always adjust upwards. Plus oil will be lower in 2026 so do not over spend now.
Assuming there are still about 730,000 people in Alaska this budget calls for spending 19,452.00 per man, woman, and child.
Assuming there are still about 330,000 people that could be considered in the workforce this budget is 43,030.00 per person that could be in the workforce.
So a family with two kids is saddled with a 77,800.00 bill for this useless state government.
If President elect Trump is successful in getting gasoline to his often quoted goal of $1.87 a gallon I suspect Alaska revenue will crater. Let’s ask all these billionaires in his cabinet to donate the funds to complete the gas pipeline. It could be called the Musk pipeline. As long as eggs and gasoline get under $2 it won’t matter about revenue deficiencies. Make Alaska Great Again!
This statement from our Governor is horse pucky “In response to softer prices and modestly stable production, Gov. Mike Dunleavy proposes a stick-to-the-basics budget that has no frills and keeps to his pattern of tamping down the urge among legislators and lobbyists to grow government” Please give us proof to this statement he also said that from his time as Governor inflation has gone up 20% , that 20% only benefited state workers in their wage increases costing us Alaskans dearly! Liberty Ed
Whatever happened to running gas thru the pipeline? About 20(?) Years ago ADN ran a 4 page spread alot how it could be done with a separator at end destination. It was hell of a lot cheaper than building another pipeline.
So where are those plans?
The Governor’s budget has a $1.5 Billion deficit, our Constitution requires a balanced budget. Dunleavy can’t get out of his own way, Alaska will be better off when he is gone.
How’s about some functioning ferry ramps to nowhere?
As a State Senator, Governor Dunleavy said he couldn’t deliver a full PFD from the Senate, because only the Governor could. As Governor, he’s now saying it is up to the legislature to figure out how.
Here we are headed into year 7 of his Governorship, projecting over $1 billion annual deficit for at least the next 10 years. Gas line is a sorta similar story, which he’s now asking us to dump another $50 million into, after beating up on Walker for his efforts at putting in a gas line (say what you will about PFD-stealing Walker, the man remains a true believer and clearly deeply committed to building a gas line)
Feels like a whole lotta hat and no cattle, no matter which end of the equation Dunleavy is on. (Which now that I said it, feels like perfect way to describe the facebook live announcement the Governor announced, then reneged on, without explanation; lotta hat – zero cattle)
This is going to be a depressing-as-hell year in the AK legislature. Hopefully Trump can do some good for us from DC, because none of the Republicans we send to Juneau do jack for us, while the Demonrats get everything they want except inflation-adjusting schools funding (and even that, they get a bunch of in 1-time funds that go to “feel good” DEI shit because you can’t actually adjust teachers wages for inflation (the way Dunleavy adjusted his and his appointees’ pay) because it can disappear the next year). Mat Su district is now looking at a deficit despite running the leanest district administration in the State, which is not helping businesses recruit workers from out of state (and everyone in the state is indigent or already working)
Readers are going to want to verify this because the number is so high it’s all but unbelievable. This evening, 12/13, on Alaska News Nightly there was a report that UAF has one hundred and seventy-eight “scientists” attending a Washington, DC conference right now. 178!! Our University system is the most highly subsidized land grant college in the US, and it is the most mediocre. 178 all collecting their airline miles and per diem.
Our state budget runs a huge deficit. Can none of these “scientists” attend using Zoom? If any of these scientists believe in human-caused climate change (safe bet they all do) then even if they don’t know about, or know and don’t care about, the funding deficit they should attend by Zoom to save the planet. Are these the kind of scientists that present papers affirming global warming coming from cow burbs but then later when drinking beer at the bar in the Willard Hotel they exchange nude pictures of Greta?
UAA is not mediocre, it’s dysfunctional.
Balanced budget is always a hoax. Public pensions having huge unfunded liabilities. Budgets have too many loopholes or services now that someone else down the line has to pay the bill. Watch out for too many extravagant bond packages. Again services now but pay the bill later. Like your 6 year truck loan which pays interest first. After three years you have a truck worth half and you still owe full price.
Yes, the unfunded liability for the defined benefit public pension tiers is $7 billion even though new entrants to those tiers ended on June 30, 2006 – almost 20 years ago! Yet we will see the incoming House and Senate majorities quickly move a bill to offer a new defined benefit tier. The public employee unions badly want a reversion to defined benefit and they worked very hard in the 2024 elections by knocking on doors, bringing in unprecedented amounts of outside money, working to retain ranked choice voting, etc. so you can bet their lobbyists are already working the politics for the defined benefit bill.
Anyone seen Billy Walker during the past few years? Maui, Mexico, Milwaukee, Melbourne?
Where is he hiding?
I agree with KC, I think tightening the residency restrictions for the PFD is in order. To many spend 6 months out of state and only show up in the summer. Owning property is not a given.
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