With rising oil prices, Alaska’s government projected to receive millions in revenue.
Andrew Kitchenman, Alaska Public Media & KTOO - Juneau
March 17, 2021
Alaska’s state government is forecasting $791.3 million more in revenue over the next 15 months than they projected last fall.
The Department of Revenue released its spring forecast Monday, an update to the fall projection. The revenue forecast adds $331.7 million by June 2021, and another $459.6 million in fiscal year 2022.
Revenue Commissioner Lucinda Mahoney described the reason for the change to the Senate Finance Committee on Tuesday.
“We’ve incorporated our actual results to date and have forecast an increase of revenues for the remainder of this fiscal year, with the primary driver being the price of oil,” Mahoney said.
Both the price of oil and oil production are expected to rise in Alaska this year.
The price of oil is forecasted to rise $7.73 per barrel this year, and $13 per barrel in 2020.
Production is estimated to increase by 4,700 barrels per day by June, and then 20,100 barrels a day for the year after.
But even with the improved forecast, the state doesn’t have enough money to pay a full $2 billion in permanent fund dividends under the formula dictated by a 1982 law without drawing from other sources. Gov. Mike Dunleavy has proposed drawing additional funding from the Alaska Permanent Fund’s earnings reserve account, more than allowed under a more recent state law enacted in 2018. His proposal has raised concerns about the long-term health of the fund.