State revenue forecast: An extra $3.6 billion over this year and next

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High oil prices are helping state coffers at the same time they are hurting everyday Alaskans. The additional revenue to the State has created a projected $3.6 billion increase to the revenue forecast over this year and the next, according to the Alaska Department of Revenue’s Spring 2022 Revenue Forecast, which was released today.

Alaska Gov. Mike Dunleavy requested the Legislature to use some of the surplus to get immediate relief to Alaskans who are facing high fuel costs and 40-year record inflation hikes, and to secure the remainder in savings. He did not ask for spending expansion on government programs.

“Rising oil prices are benefiting government finances and hurting Alaskans,” said Gov. Dunleavy. “I’m asking the Legislature to help alleviate economic hardship for Alaskans now, by paying every eligible resident a PFD this year of at least $3,700. We must get funds into the hands of Alaskans now when the bills are due, not in a month’s time.”

Deputy Commissioner of Revenue Brian Fechter spoke to reporters at today’s news conference. “Due to current market conditions, we are presented with a tremendous opportunity to use this additional revenue to provide relief to Alaskans currently grappling with high inflation all while putting billions into savings to deal with future price volatility,” Fechter said.

The Revenue Forecast includes the Department’s spring forecast of oil price, oil production, and state revenue. The Spring 2022 Revenue Forecast can be found here: www.tax.alaska.gov

The Unrestricted General Fund (UGF) revenue forecast has been increased by $1.2 billion for FY 2022 and $2.4 billion for FY 2023.  Forecasts for revenue have also been increased for all years beyond FY 2023.

“Under the 10-year outlook, we can have surpluses while paying the PFD,” Dunleavy said. “We can also rebuild our savings with these surpluses in the range of $11 billion over ten years, based on a conservative forecast of $70 plus per barrel to 2031.”

The transmittal letter presenting the Spring 2022 Revenue Forecast states, “in terms of petroleum revenue, the revenue forecast is based on ANS (Alaska North Slope crude) oil prices of $91.68 for FY 2022 and $101.00 for FY 2023, stabilizing at $77.00 by FY 2031. The oil price forecast is based on futures market prices through FY 2029, followed by an assumption that prices will increase with inflation thereafter. Based on the higher forecasted oil prices, petroleum is once again expected to be the largest source of UGF revenue for FY 2022 and FY 2023, contributing over 50% of expected UGF in each of those two years.”

As for oil production, “for FY 2021, ANS oil production averaged 486,100 barrels per day. ANS oil production is expected to average 481,800 barrels per day in FY 2022 and 502,300 barrels per day in FY 2023, before climbing to 576,600 barrels per day by FY 2031,” the transmittal letter states.

“As your Governor, I can’t choose the amount of the PFD. I wish the law gave me such authority, but it doesn’t. Only the Legislature can make this happen,” Governor Dunleavy said. “We have the resources. We have the duty to do something to help now. Alaskans are paying the price in these uncertain times. Rural Alaska is about to see the highest fuel contracts ever. Gas prices have gone up nearly a $1/gallon in a month in Southcentral. The consumer price index rose 7.9 percent, the fastest pace in 40 years. I urge the Legislature to offer relief to Alaskans now.”

The news conference can be viewed on Governor Dunleavy’s facebook page.

22 COMMENTS

  1. The Monopoly will love this! All thoses non profits are excited. How else can we see out to?

  2. “Gas prices have gone up nearly a $1/gallon in a month in Southcentral.”

    Don’t know where he is getting his pricing information, but in the Wasilla area they went up $1.25.
    And giving people their full PFD next October, while nice, won’t help anyone right now.

  3. Wow, who saw this coming! What an opportunity to reach across the state and thank all Alaskans for sucking it up while the Legislature snorted half our PFDs for six years. This is the perfect time to repay all Alaskans what the State of Alaska owes us, and renew the contract made years ago to reimburse Alaskans annually for denying our individual mineral rights in perpetuity. Let me guess the argument against it this time: uh, the State is going broke, uh, we just can’t risk running out of money with so little coming in, uh, we must save for the future, uh, ad nauseum.

  4. Dunleavy has been banking on buying his way to re-election by paying out super-sized PFDs since his first day in office. So it’s not surprising that he is seizing on the latest forecast to send money to voters during an election year. But a revenue forecast is just a prediction of future oil prices, and most often these forecasts are not accurate. Alaskans have been locked in debate over how to solve Alaska’s fiscal problems for years, with many saying they will never support an income tax, and others opposed to more cuts in government spending. Those hard choices will be kicked down the road as a result of the uptick in oil prices, but we’ll face them sooner that we think unless we put a substantial chunk of the extra revenues into savings reserves.

  5. A full PFD would have been barely 1.9 Billion they offered us a measly 600 million this last go around. How is this POMV still from the people Senate Bill 26 working out for us…We need to get rid of the long time Walkerites who want nothing more than to spend your money on their special interest. Market value is no good as it is a market value set by AKLEG and only there to keep the dividend at 1K so they can serve themselves. Thanks to Natasha, Gary and Bert, we are looking at another low amount because they want to use your PFD to forward fund their special projects they feel entitled to…

  6. Don’t worry Alaskans. The legislators got us covered. They already voted to give themselves raises and kept their per diem intact. So it’s only logical that Alaskans are next to get their statutory pfd!!! Hahahaha Please don’t hold your breath on this one.

  7. Bert Stedman will say we need to squirrel all of those dollars away in the PF corpus, or we are not “fiscally conservative”

  8. There is a small chance “our” legislature might actually repent and pay that which they have stolen from us. If they do it will not be from concern for their sins when they come home. It will be because they want you to think kindly of them in November.

    True that “vengence is mine” saith The Lord. But helping sinners from sinning again – by removing them from office, hence from temptation – is our duty!

  9. If those sucking away at the teat of the suddenly fattened hog do not give every legal recipient of a PFD their full amount by statuate, along with their past due amount, we MUST remove any member of the legislature who votes against. The un-washed masses are hurting and truly need that money. Lifestyles are changing, soon rents, utilities, transportation costs and food will be fighting for families dollars. Do the right thing AK Legislature, and every one of you will be reelected.

  10. Their estimated future oil production is low. Very low. With the discoveries in Pikka, Willow, and now Talitha (miss any?), the oil production will probably exceed 700,000 bpd in the next 10 years.
    But they can’t let on that there will be plenty of future money to be had for the pfd checks.
    If I were suspicious… I would say that Dunleavy is trying to get the 50% in the constitution before it becomes known that they can pay out more.
    Pretend to fight for you when he is really trying to [email protected]%£¥ you….
    Thank goodness, I am not a suspicious person.😉

  11. Hilarious reading all of you so-called conservatives complaining about the size of your state welfare checks. PFD’s are free money that no one has earned. We’ve created a society of self-entitled dependents who whine and cry when their PFD isn’t big enough. If you are one of these people, take a good look in the mirror. You won’t see a conservative looking back at you.

    • What are you smoking? It is earned, quite literally. We are participants as the residents who agreed to not privately own, produce or sell and instead share in the profit with the government the dollars born from said activities. If you don’t want or need a PFD then don’t sign up for it! Nobody is forcing you to partake. However if you feel that receiving that which you are owed is somehow a free hand-out then you must be an out of work liberal arts major or a commie.

  12. This is the tip of the iceberg. If our pipeline was anywhere near capacity, we would have an even bigger surplus. We could…do something about the drug and homeless crisis, fix our bridges and roads (I’m not using the term infrastructure as it has been pirated and means lining Pelosi’s pockets), shore up the ferry system, and possibly start more trade programs for mining and other resource development needs (ie create jobs).

  13. Well that makes no sense at all. Residents don’t have individual rights of ownership, or royalty rights, to natural resources extracted from lands they don’t own within the state. We don’t receive dividends for any other natural resources extracted by private interests in Alaska. Residents in other oil producing states do not receive dividends from royalties or taxes imposed on the companies extracting those resources. So individual Alaskans do not have a legal right to any sort of dividend from the extraction of North Slope oil, except for the right created when the statute creating the PFD was enacted.

    The statute that created the Permanent Fund and the entitlement to a PFD, was enacted for at least two reasons. One was to create a fund that would continue to provide funding for state government after the royalties from oil extraction began to diminish. The second was to pay a dividend so that Alaska residents would have a financial incentive to support continued extraction of oil from the north slope.

    Each of those goals was achieved, so the statute was largely a success, but that doesn’t mean that we have “earned” our PFDs. The PFD is a government entitlement program, not a payment that you earn through work or enterprise. You do nothing other than fill out an application to receive your PFD. I understand that a lot of Alaska families rely on the checks and I don’t have a problem with the PFD program. My point is that you should not call yourself a conservative if you are one of those who scream whenever the amount of free money you are receiving isn’t as much as you want. And it’s up to the legislature to decide how much free money the state can afford to pay. It isn’t bound by the statutory formula enacted several decades ago, and doesn’t have to repeal that statute before choosing a new formula, Those who keep posting about the old statutory formula should read up on the doctrine of implied statutory repeal.

    • Actually the native corp share revenue from the development of natural resources. In Wyoming the residents there have oil wells that produce oil, and they do get a royalties checks, those residents took the risks of that potential earnings. Alaskans lost that right to agree with an oil company to place on your property an oil well

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