The Department of Revenue’s Fall 2020 Revenue Sources Book today forecasted that funding from the Permanent Fund Earnings Reserve account will be $1.6 billion in this fiscal year, and will be only $1.2 billion in both FY 2021 and 2022.
The Permanent Fund is expected to transfer $3.1 billion to the General Fund in both fiscal years, which begin July 1, 2021. These amounts include funds for general government spending.
The forecast indicates that the State of Alaska’s budget gap is much larger than it was last year.
Between continued growth of the fund and continued low oil prices, the Permanent Fund transfer is now the state’s largest source of UGF revenue, contributing 65% of undesignated general funds in FY 2020 and projected to contribute at least 67% for each of the next 10 years.
The current balance of the Earnings Reserve Account of the Permanent Fund is $6.7 billion, including realized and unrealized gains.
The fund itself has a value of over $70 billion but that fluctuates with the market and is not liquid assets. It cannot be accessed by the Legislature.
For FY 2020, Alaska North Slope oil prices averaged $52.12 per barrel.
ANS oil price of $45.32 per barrel for FY 2021 and $48.00 per barrel for FY 2022.
For FY 2020, ANS oil production averaged 472,200 barrels per day. ANS oil production is expected to average 477,300 barrels per day in FY 2021 and 439,600 barrels per day in FY 2022, before climbing to 481,800 barrels per day by FY 2030.
Drilling and investment were sharply reduced over the past year, and are reflected in the lower near-term forecast, but the department is optimistic that new developments will contribute to stabilizing production over the coming decade.
The Revenue Sources Book is an annual publication that provides basic information about state revenue, as well as a forecast of state revenue over the next ten years.
The Revenue Sources Book is at www.tax.alaska.gov.
