Report: Alaska’s fiscal health emerged best in country from pandemic

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By MERRILEE GASSER | THE CENTER SQUARE

Alaska exited the Covid-19 pandemic with a financial surplus of $96,800 per taxpayer, snagging first place in an analysis of each state’s fiscal health.

Alaska had a $41.5 billion tax surplus following 2021, according to financial watchdog Truth in Accounting. The group studied the most recent data from all 50 states’ 2021 annual comprehensive financial reports. It found that 31 state governments did not have enough money to pay all their bills, in some cases leaving hefty tax burdens on future taxpayers.

The story was very different in Alaska, where the state had $41.5 billion to pay $15.4 billion worth of bills, leaving it with still billions left in surplus.

The state’s healthy financial position was fortified further by $12 billion in federal COVID-19 funding and increases in rents and royalty revenues, the report said.

“Notably, like most states in this year’s report, some of Alaska’s economic condition improved only on paper due to stock market increases in 2021. However, these increases are transitory as financial markets are volatile and the gains recorded previously may not have been realized through actual sale of the market assets,” the authors wrote.

State debt overall appeared to improve due to increased market valuations of pension plans and federal COVID funding, according to the report. But as Covid funds go away, and market conditions continue to fluctuate, 2022’s financial evaluation is poised to look less favorable for state debt, the report predicted. 

Unlike some states, Alaska was able to fully pay public employees’ retirement benefits in 2021. Across the country, total unfunded pension liabilities were $699 billion, the report found.

“Unfunded retirement liabilities were the largest contributing factor to the $1.2 trillion in state-level debt,” said the authors. “One of the ways states make their budgets look balanced, when they are not, is by shortchanging public pension and OPEB (Other Post-Employment Benefits) funds.”

Other top-ranking states boasting taxpayer surpluses were North Dakota, Wyoming, Utah and South Dakota. On the flip side, taxpayer burdens were the heaviest in Massachusetts, Hawaii, Illinois, Connecticut, and New Jersey.

This isn’t the first time Alaska has landed at the top of TIA’s list for fiscal health. The analysis included the state’s Earning Reserve Account as assets available to pay bills. It also found the long-term debt in Alaska went down, noting it was primarily due to a decrease in unearned revenue and Covid relief funds.

“Even though Alaska was financially sound before and during the pandemic, the state still received federal support from Covid-19 related grants which contributed to the continuing financial health of this state,” the report said. “The uncertainty surrounding the full economic recovery post-Covid makes it impossible to determine how much will be needed to maintain government services and benefits in the coming years. However, the surplus Alaska had and additional funds will help the state weather any future public health or economic crises and downturns in the market.”

Read the report at this link.

18 COMMENTS

  1. There should be a giant asterisk next to Alaska in this study.

    Nearly all if not all of that wealth is tied up in the permanent fund and is not supposed to be freely used by the Government to pay bills. As far as I am concerned, a large permanent fund means that the citizens are wealthy, not the state government.

  2. Of course it did. Our RINO legislature refused to pay out a full PFD. “Fiscal Health” is code for the government stealing our money.

  3. 41.5 billion dollar surplus? Good God. Time to severely cut taxes. Better yet cut programs with federal strings attached. Independence and economic opportunity for individuals and small business as much as we can for Alaska.

  4. Simple reason. After Biden reversed Trump’s energy policies, oil prices soared. Rather than cutting programs, we maintained them. Oil companies lose money when the price of oil is below $40. ConocoPhillips now has healthy profits. If we develop the Willow Field our future will continue to lo look bright. I do not like Biden’s green deal nor do I like $30 a barrel oil.

    • $30 a barrel bad? Why? When the price per barrel collapsed 2 years ago gas was averaging about $1.50 a gallon. I don’t know about you, but I like that.

      • $30 a barrel oil means our state government is in the tank. Everyone talks cuts but never says what will be cut. Going to cut the State Troopers or state roads ? All those services are crucial to the Mat Su and its growth. A healthy state government is a blessing. Rather have a full trooper force than low gas prices.

        • John: Maybe it’s about time for Matsu to get a police force of its own and do a little road building of its own?

  5. thank you Dunleavy. God Bless Dunleavy’s re-election bid and God Bless Alaskans with the good sense to elect another common sense conservative governor in 2026 despite R-C-V if its still around.

  6. The Alaska legislators actively stall these blessings from distributing from resources to the people of the land. Therefore the excess poverty in Anchorage that creates hegemony in public policy only integrates the colloquial “Indian problem” recently noticed to the astounded, insular “public servants” of Anchorage.

  7. Interesting. PowerLine ran a piece yesterday on the costs of government mandated anti-COVID measures. It was based on data analysis by The Center of the American Experiment that had Alaska with the 8th largest per capita GDP loss due to anti-COVID measures. Our loss was $2,115, slotted nicely between Hawaii and Delaware, neither of which are in any way red. Remember that Hawaii had an extensive lockdown. Worst was MA at $2,862. Best was MS at $1,004. Worse, AK still has Anne Zink in a position of power and we still have the same majority in the Anchorage Assembly.

    Methinks there is more to the data in this piece and PowerLine than we expect. Too bad neither author talked to the other. Link follows. Cheers –

    ‘https://www.powerlineblog.com/archives/2022/10/the-costs-of-covid-shutdowns-part-2.php

  8. While I’m glad to see Alaska is once again fully funding its retirement plans, including the PFD in these analyses only encourages Alaska’s progressives to spend even more money that isn’t theirs.

    • That’ll be the Godly response, state and city leaders including anchorage assembly unlucky 13 return all covid surplus monies back to the federal treasury.

  9. Other top-ranking states boasting taxpayer surpluses were North Dakota, Wyoming, Utah and South Dakota. On the flip side, taxpayer burdens were the heaviest in Massachusetts, Hawaii, Illinois, Connecticut, and New Jersey.
    …………………………..

    I see a pattern.
    As simple as red vs. blue.

  10. The Truth in Accounting is factually wrong in many of their numbers and overall, a very misleading report. Just go to the audited State of Alaska financials:

    ‘https://doa.alaska.gov/dof/reports/resource/2021acfr.pdf

    The last year state general fund revenue exceeded expenditures was in 2013.

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