GOVERNOR RELEASES BUDGET BOOK AND SURVEY RESULTS
March 05, 2015
“As Alaskans, we’re in this together,” said Governor Walker. “In order to find the best solutions to the challenges at hand, we need as many people as possible to participate in these discussions. Our hope is that these documents will bring more Alaskans to the table as we discuss our fiscal future.”
The Governor’s Budget eBook explains how Alaska’s current budget gap developed, offers possible future scenarios and provides a financial overview for each state department. It is available online and can be downloaded as a PDF or an electronic book.
As a resource development state, Alaska’s economy rises and falls with the price of oil. The State receives tax revenue from each barrel of oil that flows through the Trans Alaska Pipeline and this money is used to provide services and fund projects that Alaskans depend on.
Quoting the Governor's eBook, oil production in Alaska has declined in recent years. The amount of oil now flowing through the pipeline is 25% of peak capacity. Low oil production and low oil prices mean less revenue to the State.
With the lower oil prices, Alaska is now facing a budget gap. The State general fund is the account that pays for most State govern ment operations, services and projects. Oil revenue generates about 90% of the State’s general funds. As of February 2015, oil is worth about half of what it was last year when the current State budget was adopted. As a result, a $3.5 billion gap has formed between the amount the State expects to spend in the current year, and the amount of oil revenue it expects to receive.
Today, to make ends meet, about $10 million a day is being spent from the State’s savings. Alaska has about $14 billion in the bank to help cover the shortfall, but at current spending levels and $50-a- barrel oil prices, the State's savings are estimated to last only 3-6 years.
This sudden, unexpected drop in oil prices has drastically reduced revenue to the State of Alaska, creating a budget gap that is too large to be addressed by spending cuts alone. Getting Alaska on stable financial footing will require a combination of short-term solutions, long-term strategies, and prudent investments.
Every Alaskan benefits in some way from State services and pro- jects. Alaska’s budget supports communities, organizations and individuals through grants, direct payments and capital project funding. 100% of spending benefits Alaskans with 43% of the spending to State agencies and personnel and 57% to Communities, organizations and individuals through grants, direct payments and capital projects.
There are many possible approaches to addressing the budget gap, but three factors are key to influencing any outcome: oil production and price, State spending, and State savings. For more indepth information, download Doing What Needs to Be Done; Life At $50 A Barrel.
Doing What Needs to Be Done; Life At $50 A Barrel explains how the current budget gap developed, offers some possible future scenarios, and provides brief descriptions of all State government departments.
Each department overview contains an explanation of the department’s mission and core services, a summary of the department’s 2016 proposed budget reductions, and a link to the department website. The 2016 budget, also called the FY 2016 budget, covers the period from July 1, 2015 to June 20, 2016.
Governor Walker also released today results of the Voices for Vision Budget Survey, which invited state employees and members of the public to weigh in on ways to manage Alaska’s finances. Eighteen students and three faculty members from across the University of Alaska system summarized and categorized more than 4,000 comments to provide an overview of the ideas submitted.
With the Voices for Vision Budget Survey, Governor Walker and Lieutenant Governor Mallott sought to access two of the state’s most important groups of stakeholders, the public employees charged with ensuring responsible stewardship of public resources, and the citizens of Alaska who expect public servants make strategic and effective decisions about how those resources are managed.
A total of 2,778 surveys were completed with the following breakdown:
Governor Walker and Lieutenant Governor Mallott are reviewing the survey results now and will announce their five favorite ideas soon.
“I want to thank the students and faculty members who worked so hard to put this report together,” Governor Walker said. “I encourage all public servants to look at these documents and consider the ideas submitted as you’re making important budget decisions. Lieutenant Governor Mallott and I are doing the same, and plan to announce our five favorite ideas next week.”
Source of News: