The Department of Revenue’s Spring 2023 Revenue Forecast brought tough news for Alaska on Tuesday. The projected price of oil is down, leaving a hole in the budget for this fiscal year, as well as for FY 2024, which starts in July. The hole looks like about $925 million in total, and there seems to be little agreement on how to make ends meet. Almost certainly, it will mean a bite out of Alaskans’ Permanent Fund dividends.
Gov. Mike Dunleavy has proposed a full $3,700 dividend, at a cost of $2.47 billion, while the House Republican majority is now looking at a $2,700 dividend and the Senate majority is discussion one that is closer to $1,300.
Unrestricted General Fund revenue, before accounting for the transfer from the Permanent Fund Earnings Reserve Account, is forecast to be $3.6 billion for Fiscal Year 2023 and $2.7 billion for Fiscal Year 2024.
The Permanent Fund is set to transfer $3.4 billion to the General Fund for FY 2023 and $3.5 billion for FY 2024, according to the Department of Revenue. These amounts include funds that are available for general government spending and the payment of dividends to Alaskans.
Permanent Fund transfers remain a large source of funding to the General Fund, and are now responsible for 44% of undesignated general fund spending for 2022. The Permanent Fund is projected to contribute 48% to 64% of the FY 2024 to 2034 budgets.
In 2022, Alaska North Slope oil prices averaged $91.41 per barrel. The revenue forecast incorporates the most current indications from financial markets and is based on an annual average ANS oil price of $85.25 per barrel for FY 2023 and dropping down to $73 per barrel for FY 2024. Prices are expected to decline beyond FY 2024, stabilizing at $70 per barrel by FY 2032.
In FY 2022, ANS oil production averaged 476,500 barrels per day. ANS oil production is expected to average 485,200 barrels per day for FY 2023 and 496,400 barrels per day for FY 2024, before climbing to 542,900 barrels per day by FY 2032. with the Willow Project coming online.
In comparison to the Department’s Fall 2022 Revenue Forecast, which was released in December 2022, the ANS oil price forecast has decreased by $3.20 per barrel for FY 2023 and $8 per barrel for FY 2024.
The ANS oil production forecast decreased by 6,500 barrels per day for FY 2023 and by 7,200 barrels per day for FY 2024.
Driven by this lower outlook for oil price and production, the Unrestricted General Fund revenue forecast has decreased by $246 million for FY 2023 and $679 million for FY 2024, the Department of Revenue said.
The Spring Revenue Forecast is an annual update to the Fall Revenue Sources Book, providing basic information about state revenue, as well as a forecast of state revenue over the next ten years. The Revenue Forecast is available on the Department’s website at www.tax.alaska.gov.
The announcement came on the same day that a House Education Committee hearing attracted numerous teachers and principals who asked the the House pass House Bill 65, which would increase the school spending formula. The state spends about $1.23 billion on education every year. If the Base Student Allocation is increased by another $1,250 per student, as proposed by HB 65, the cost to the state budget would be more than $164 million per year, according to some estimates that are based on 131,212 enrolled students.
HB 65, sponsored by Rep. Daniel Ortiz, would give a set formulaic increase to school districts, which have great latitude as to how they spend the money the state gives them.
Holy Tintinnabulation Batman,
$945,000,000 short and after a 38 percent raise no less. Pow!! Biff#! Zonk!!?. Can our trusted servants get us out of this mess? Stay tuned same Bat time , same Bat channel.
The best one I remember saying when I was a kid was, Batman and Robin were tied to a big reflecting dish on the roof of a building and when the sun got around to the right angle it was going to fry them. I’m not sure who the culprit was and that episode, probably the joker. Anywho, when Robin saw what was going down he exclaimed “Holy oleo Batman.” There are options. Income tax, sales tax, tourist tax, lower PFD to pay the bills, Tell Bryce edgemon he can’t fly from dillingham he has to get to Anchorage on his own, stuff like that.
Noticed you left out expand economy or lower spending. It seems they should least be options.
Income tax, sales tax etc. may make sense in a population dense state like Florida(if I am not mistaken they don’t have an income tax either), but taxing everyone here will never meet the legislature’s insatiable hunger for more money and be a drop in the bucket in this deficit. As it stands every man, woman and child in this state already pays a hefty tax, as the legislature takes it out of the PFD at will. As Kevin said, cutting the budget is the only sensible option. We don’t have a income problem, we have a money wasting problem. However I do like your idea to make Bryce Edgemon pay for this own travel and while we are at it have Donny Olson pay for shipping weight benches and pianos on his own dime.
Fool! They’re will never be enough money for them! Don’t you get that!???? They get and take and squander more and more and more! It’s never enough! We IE MIDDLE CLASS WORKING AMERICANS DONT HAVE ANY MORE FOR THEESE FOOLS TO SQUANDER! WAKE UP! This is not a money problem, if it were the GAZILLION OF dollars they are throwing at it would be enough to start making it better!!!!!!! It keeps getting worse! Every day, every week every month and every year! Yeah take some more from us to squander! That will help! That’s your option? That’s your solution? Tighten the screws a lil more on us???? GIVE ME A BREAK! You should run for office. You would make a great politician!
And another thing. Batman and Robin are not real and neither is the vaccine.
Oh, the Wuhan Virus so-called “vaccine” is very real. It is simply not a vaccine (all officially changed, post-2020 definitions of the word “vaccine” to the contrary).
It’s called money laundering. Do it until the courts say that you can’t. Blame game oil all you want. Oil is booming everywhere else. This is lame.
Ohh, just print more money and don’t forget special interests like the homeless, the LBQZXYC, the New Green Deal, illegals and paying reparations to every victimized group in Alaska…throw good sense and a sound mind out the window…because we’re not paying attention any way-shape-or-form!
How about we start removing administrators with no responsibilities? It worked pretty well for Twitter.
This seems like the perfect time to add an expensive pension plan to fund more government employees!
And also the perfect time for funding yet more “Drag Queen Story Hours” and public drag queen shows.
Because life is simply a drag without constant drag queen DEMONstrations!
We gotta find a way to get, Stedman and Giessel’s fingers out of the cookie jar. They are thieves in Juneau.
Here’s a wild idea. Cut the bloated state government. Hard.
Its gonna get worse as the ongoing stock market crash drives earnings of the PF down. And we have a couple more years to go. Cheers –
The $925 M is based on $85 oil today and $73 oil next year. The Crude Price today is $68. The shortfall will be over $1B. The anonymous comments get crazier as the oil price drops.
It’s cute how you keep throwing around anonymous like it makes you sound clever or one up on people.
Especially since you constantly refuse to post proof you are who you claim to be.
But when nonsense is all you got, I suppose you gotta use it.
That is simply another in a long line of typically disingenuous, irrelevant and ad hominem attacks by radical leftists like “frank rast”, TMA. When facts and logic fail them (as they always do), the radical leftists always try to divert the discussion with inane nonsense.
Like I have said they are after the PFD. The public automatic raises union members and politicians want the fund and are in the process of taking it piece by piece. Walker started it by taking our PFD. Now it’s open house on parts of the PFD just because the politicians won’t cut the blood state government and their sheep.
Cash cow. It’s for the taking if you’re smart enough.
That attitude is the reason no amount of money will ever be enough.
Just stating the facts, like dangling a carrot in front of the donkey
Income taxes are coming. Fast.
Yeah possibly, but I’m more in favor of sales tax. If this is going to be fixed everybody’s going to have to put something in the kitty. People that are on welfare or the elderly on fixed income aren’t going to pay much but they use the system as does any citizen. But if you buy something, that seems to me to be a more fair resolution. The more you buy the more you pay.
We are already paying more from what they are stealing from each Alaskans PFD. Give me my full PFD and try and live off the lower amount they collect from an income tax. Pretty sick they are stealing PFDs from children.
Yes it is. You’re right but it’s not needed. We need sensible money, managers, running state coffers.
Why income taxes? They are already collecting more than an income tax with PFD theft. Think about it they are taxing the children already.
Reduce the State of Alaska budget.
Schools and Medicaid needs to be addressed.
Why are Alaskan Natives who have Federal Sponsored Health Insurance covered by State of Alaska Medicaid? Or anybody else who already has a health insurance plan. Makes no sense. Massive costs could be saved on this issue alone.
Mismanagement of school budgets by local governments must not be rewarded with additional State funds. Accountability at the local level should be keep at the local level. Especially when student enrollment is decreasing.
If Politicians are concerned about budget shortfalls, then Politicians need to ask the hard questions. There are solutions but these solutions require tough answers. Don’t hold your breath.
The state of Alaska spending $16.2 billion dollars on governing a state of 750,000 people should give any working person pause, as this is a ridiculous amount of money. 307,000 working Alaskans, 156,000 of them work for state, local, or federal government. Since $8.6 billion of that spending is state spending, 151,000 of us would have to come up with $59953.00 each to fund state government at it’s current burn rate of cash, if the oil stopped flowing. Juneau is living in a complete disconnect of reality because the legislators don’t even consider the disaster of the continual explosion of state government. In what universe is it necessary for half of the working population to be working for “government”? It is just incomprehensible when you consider the reality of what is being spent in Juneau.
Very well said.
If we had a defined benefit retirement system today guess who would be making up the difference as oil prices or investment revenue drops. One way or another that would be YOU. Just so we’re clear, even if you don’t have a defined benefit where you work.
How about reporting on how much Alaska gets paid per barrel of oil, compared to everywhere else in the world.
Suzanne is that budget hole REALLY $925 BILLION as it states in the first paragraph? Since the total state budget usually runs at about 14-18 billion, that seems disproportionate. I am assuming it is $925 million, when looking at the rest of the numbers.
IF the legislature had the will, they should cut ALL funds going to any non-profit and let the non-profits justify their causes to the general population and solicit for donation instead. Freeze the BSA and add a provision to increase it ONLY when student test scores have improved consistently over 3-5 years.
Refocus the budget on essentials and aggressively pursue and support more resource/oil production….but we all know that’s not going to happen.
I fixed that this morning. It was a typo. 925 million. I added a few extra zeroes haha. – sd
Lol, as did I and the case of California. They aren’t hundreds of billion dollars in debt, only about 25 billion.
Taxpayer: Yes to all your points!! And thanks for questioning the amount of the budget hole. Makes a big difference!
Alaska is 5th highest spending per student in the US. We spend more per capita than EVERY other state. Alaska state spending is nearly double the average of the US.
Cut the spending. It needs to come down across the board. It is time to remove the annual pilgrimage to Juneau. Place the legislature in Anchorage. Drop per diem spending for all Anchorage and Palmer and Wasilla legislators. Turn the Governor’s Mansion into a museum and give it to Juneau. Build a few boarding schools so that the rural kids can get the same level of education as Anchorage and Fairbanks. We need BETTER ideas not more spending.
They tried moving the rule kids out of the villages and then to boarding schools back in the early 1900s. That didn’t go over so well. I once talked to an elder out in Gambell, and I asked him if he would do it all over again and he just slowly shake his head at me and didn’t say anything. There is Mount edge come if they want to go somewhere, but I take a kid out of their village? That’s not the solution unless you want to try to assimilate them. You do realize that teaching in Alaska is way more expensive because the cost of living is so much higher. Transportation for teachers and their families in and out of the village a couple of times a year, transporting groceries in, transportation for the school districts themselves for sports and other extracurricular activities is very expensive. The costs aren’t the same as in the lower 49 states. They are escalated tenfold. And if you say the teachers are overpaid, if that’s the case why is there a teacher shortage? You have to ask yourself if it’s such a good deal why isn’t everybody flocking to the bush? You can’t come out ahead teaching in the bush. It takes just about everything someone makes to break even.
They deserve the option. Rural kids who graduate from Mount Edgecombe are far more likely to go to college than any other high school. I was actually advocating for improvement in Anchorage and Fairbanks primarily. But we KNOW that rural schools cannot afford a grade level dedicated math and or science teacher for grades 10 through 12. Nor do they have the chemistry labs, etc. Yes, Anchorage just hired a Superintendent from the failing Houston, Texas school district, hardly a first round draft pick. One thing I will agree with you about is that parents are not nearly as involved enough. If they were we would not be having this conversation or funding this obviously failing system.
Totally agree with you there sap. Anchorage shot themselves in the foot when they failed to hire Steve Atwater for superintendent years ago.
You just made the argument as to why the rural Alaskan villages cannot be sustained in today’s world.
They can’t, but don’t try to assimilate them. These are native villages with culture. What happens in eagle River means very little to them.
We all know why teachers accept bush assignments, to boost their last few years salaries, which in turn puts them in a higher pension bracket. Its been that way since way back in the 80’s. Villages and or our participation trophy parents could all do us a favor by actually disciplining their children. BTW there are only 48 lower states. Hawaii doesnt count as lower 48 state. Thought you lived here at some point in life.
The quality of teaching in Anchorage and Fairbanks isn’t any better than in the bush and you’re kidding yourself if you think that. What is different is the developmental growth of children synapses. Without the different daily exposure that challenges the brain, a lot of those connections are never made and they never will be. They’re still great kids and I truly loved some of them like they were my own. Their victims of their surroundings and in their world I don’t fault them for that. It’s what makes them unique. Read up on it sometime.
My wife’s family is from the bush, all 4 girls went to college. I have many nieces who went to school in bush schools, most went to college and assimilated just fine. Teachers, Nurses, etc.
Who is selling who short Greg?
Your family is not the norm. More than likely they had good parents. I know of students in the bush that leave to go to college, most on a nursing or sporting scholarship. Most Bush kids aren’t cut out for the real world. Three or four days in Anchorage is about all they want
Kinda like Mary Petola?
Not only is Alaska the 5th highest spending per student, it’s also 49th in the US for test scores! Oh, but they need more money!! Until the quality of education improves no more money!
But, I am sure the State’s funding for the Alaska Humanities Funding will stay intact.
The money per student needs to follow the student to wherever their parents want. When homeschooling, charter, and other schools start getting the students and the public school system goes further down the tube perhaps they will return to teaching what our kids need to make it, reading, math, history. When enough
“ teachers” lose their jobs we will be able to hire teachers who care about All the kids, not just little specialized groups. There is no sense in throwing more money away. And, where did all the money they got from Covid funds go? Teachers? What? Taxpayers would like to know.
You can’t fill vacancies now. Wake up.
At some point in time our bloated Guv’ment must do more with less, just like the private sector, maximizing efficiencies at minimal cost, automating many functions. If the political leadership would only cut the budget of every Department by 25%, I’m quite sure we’d be just fine, and if not we’d just adapt.
Heck, while we’re at it why not just forbid oil production and use by, what, 2030? And while we’re at it let’s tax investment and corporate income even more so that the PF earns less!
In the end there will be even less to tax.
Stupid is as stupid does ……
“…….The hole looks like about $925 billion in total……..”
Want to try that again and trade “billion” for “million”? I admit that my accounting classes were attended nearly 40 years ago, but I find it difficult to believe that the Alaska annual revenue stream is a few bucks shy of a trillion dollars down for a single year. But if you know somebody who can squeeze a trillion dollars out of a turnip (or a $20 price increase on a barrel of crude oil), I’d be willing to watch. I always wished I could have witnessed Moses part the Red Sea. This could be almost as impressive…………
I know someone who can squeeze a trillion dollars out of a turnip. His name is Brandon. He is very impressive! The son of Brandon is also a chip of the old block. The Big guy can bearly walk and talk but man o man can he ever squeeze a boat load of money out of a freaking turnip!
The State does not have an income problem it has a spending problem and need to cut the non-productive state employee’s to the point agencies can operate effectively once again.
Meanwhile NO ONE talks about reforming the State budgetary process itself. No one. Waste and an incredibly archaic system that no agency budget manager thinks works well. Yet those same budget managers are FORBIDDEN by policy from officially conferring with any legislator about waste and better ways to operate a fiscal policy. The people of Alaska are being played big time. Cuts and/or revenue “enhancement” are all politicians know. Low hanging fruit is the easiest to pick.
Let me just say how utterly shocked I am that our City and State leaders along with our federal administration from the top down have somehow come up short on revenue? I would be LMAO if it wasn’t so painful just to survive in this Great State. The only thing that is not great about this once great State and our once Great Country are the Clowns that are running it into the ground! In the last three years in particular our governments have been been the deligated Stewards of more money than at any other time in history. Unheard-of amounts of money, for politicians corporations, unions and are somehow short? They need more from me? You? What they need #1 is to get paid the yearly average wage for the state they are allegedly serving and not a penny more! Maybe then they will begin to understand the value of a dollar and learn also some budgeting skills at the same time. They would learn all the lil things that make a big difference, such as not spending more than you have. Only spending for what you need while saving for a rainy day. On second thought I don’t think any of them are capable of doing anything more than blowing sunshine up each other’s alley while they continue to spend and send US to the poor house. This is not a republican or democratic problem. We need to stop being angry with each other in this country and realize it’s our entire political system and that would include our corporate system along with the Unions and realize they are all one and the same! At some point, sooner than later they all need to go away. For good!
We all voted to move the Capital to Anchorage or Wasilla, and it didn’t get moved! That would be a start, how much money would be saved on airplanes, hotels and rentals, most of all Senators, Representatives, all live in these two cities! It’s a start!!!
I think that is a great idea! Let’s throw in a independent quarterly city and state wide audit for an accounting of every penny spent and make it public information for all to see.
> Uh-oh: State comes up short in revenue this year and next
Excellent. Cut whole departments.
CUT SPENDING STUPID !!
Poor-mouthing again? A lot of funds used to be in the CAFR accounts. Maybe they are hiding that some other place.
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