A Closer Look at Alaska’s FY22 Budget Proposal

Governor Dunleavy released his proposal for the Fiscal Year 2022 budget last week. It will serve as the starting place for the legislature as they begin work in January. According to the Office of Management and Budget (OMB) documents, the proposal includes $294.6 million in reductions. Unfortunately, people often speak first and sort out the[…]

Alaska’s Finances Aren’t as Bad as You Think

If you happen across some information about Alaska’s current financial situation, you probably get the impression that we are in dire straights. When oil prices crashed 77% in late 2014, the State’s oil revenues collapsed – leaving a gaping hole in the budget. By all accounts, we’ve been deficit spending ever since. But that is[…]

Fixing Alaska’s Investment Earnings Paradox

I wrote a piece a few weeks back about how Alaska’s current investment earnings laws don’t work together. They create a paradox in which the budget deficit gets smaller if investment earnings get worse. In the extreme, we could balance the budget by losing $7 billion in the stock market. Because that makes absolutely no[…]

Inflation Proofing the Permanent Fund

There was a little bit of a sparring match during the PFD working group meeting last week. Senators Hughes and Stedman seemed to have different impressions about the Percent of Market Value (POMV) approach to managing the Permanent Fund. But, the fireworks came in the form of a misunderstanding about how inflation proofing works. Let’s[…]

Sorry, the Cavalry Is Not Coming

You have undoubtedly heard about the renaissance that is just starting on Alaska’s North Slope. It’s a very exciting time with good news breaking every week. All that excitement may tempt you to think that the North Slope oil cavalry is on the way to help us win our budget battle. I’m sorry to say,[…]

The Fuzzy Logic of Columnists Writing about the Earnings Reserve

“How are you going to pay for all that?” a reporter asks Governor-elect Dunleavy. “$19 billion in the ERA. That’s how” he quips. Since well before the press conference following the election, reporters, journalist, columnists, bloggers, opinion havers, and fiction writers have been questioning how the promises made on the campaign trail would turn into[…]

Exploring Alaska’s Budget: Part 5 – FY20 Budget Issues

We’ve looked at Alaska’s budget for the past month. In part 1, we learned some terminology. Then, in part 2, we explored what we buy with all that money. In parts 3 and 4, we analyzed where the budget growth occurred during the high oil price years, and how we got the budget back under[…]

Exploring Alaska’s Budget: Part 4 – What Did We Cut?

Now that we’ve explored how the budget increased when oil prices were high, let’s take a look at what got cut when oil prices crashed. Budget Cuts The time period of interest for this article is from the highest budget year (2013) to the most recent budget (2019). In this first graph, we are only[…]