The upcoming session of the Alaska Legislature will grapple with shrinking oil revenue and balancing the state budget.
Lawmakers will return to Juneau later this month to begin the first session of the 34th Alaska Legislature . A new bipartisan caucus, mostly composed of Democrats and independents, will take control of the state House, aligning it with the coalition-controlled Senate. However, declining oil prices present a financial challenge, as Alaska Public Media's state government reporter, Eric Stone, explained.
The Department of Revenue forecasts lower oil prices for the remainder of the fiscal year, with North Slope crude oil projected to be around $73 per barrel. This decrease is attributed to competing market forces, with geopolitical uncertainty driving prices up while the global energy transition pushes for alternatives. As a result, unrestricted oil revenue, the amount lawmakers can spend freely, is projected to be about $1.7 billion in the next fiscal year, more than half lower than fiscal year 2022. The state relies heavily on the Alaska Permanent Fund to balance its budget, drawing 5% of its market value annually for state services. This reliance on investment revenues, as Revenue Commissioner Adam Crum describes it, raises concerns about potential pressure on the fund. Governor Mike Dunleavy's proposed budget includes nearly $4,000 Permanent Fund Dividends (PFDs) but requires spending over half of the primary non-permanent fund savings, necessitating a three-quarters majority vote in both legislative chambers. Due to Democratic control in both chambers, the governor's budget is unlikely to pass as is. Additionally, Dunleavy's budget would allocate roughly $175 million less to public schools compared to this year, although he plans to propose an unbudgeted education bill. These budgetary constraints leave limited room for new bills and capital spending, anticipating fierce debates during the legislative session, particularly concerning the PFD and potential reductions
Alaska Legislature Oil Prices Budget Permanent Fund PFD Education
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