Uncharted Waters: Alaska’s 2015 Budget Process

• Published in: California Journal of Politics and Policy
• Main Authors: Glenn, Wright, McBeath, Jerry
• Format: Article in Journal/Newspaper
• Language: English
• Published: eScholarship, University of California 2016
• Subjects: Western State Budget Report; Alaska; Fiscal Policy; Taxes; Oil; Alaska Permanent Fund; north slope
• Online Access: http://www.escholarship.org/uc/item/4nf5h06z

After a bland start to the 2014 legislative session, fiscal year 2015 became interesting (and challenging) due to the defeat of an incumbent Republican governor and a rapid decline in the global price of oil. Because taxes on oil generate around 90% of Alaska’s non-transfer revenues, and oil production from Alaska’s North Slope oilfields has been in decline since the late 1980s, the state faced a significant deficit going into FY2015. The decline in revenue led the legislature to pass a significantly reduced budget for FY 2015. At the same time, Alaska’s sovereign investments have increased in size in recent years and the state’s savings and investments totaled more than $60 billion, leaving it with reasonable options for balancing its budget over the long term, but no clear strategy for the future.