2016 State of the State: Key Questions for Alaska’s Leaders

Tomorrow night Governor Walker delivers his State of the State address before the Alaska Legislature.  The Governor will likely detail and echo fiscal plans the administration has previewed in recent months.  With a deficit approaching $3.5 billion and forecasts of continued low oil prices, Alaska faces a number of challenging decisions to fix its fiscal plight.  Already, it’s clear that leaders in the Legislature share the public and Headlamp’s concerns for the State’s economy and future. Deciding how to plug the hole will dominate news coverage in the state over coming months.

Looking back over the past year, and the few months since we launched Headlamp, we have a number of important questions for Alaska’s leaders in 2016. With a day to go before the State of the State, here are some key questions we’re hoping to get answered by Governor Walker, his team, and the rest of Alaska’s leaders:

  1. How will state leaders ensure we have a sound business climate for the support industry?
  2. Is the state’s checkbook going to be published in 2016?
  3. Will the State enact new taxes on job-creating industries in Alaska?
  4. Is it fair to raise taxes on Alaskans by $400 million while only cutting state government by $100 million, as proposed by Walker?
  5. Will Alaska address its structural budget challenges by seeking further spending reductions this year, or will the State seek to plug the hole by tapping the Permanent Fund and increasing taxes on businesses and individuals?
  6. Are state leaders committed to reaching the sustainable budget level, of $4 billion in UGF spending, as developed by Dr. Scott Goldsmith of ISER?
  7. How will the state keep small-to-medium sized independent oil and gas companies exploring and producing in Alaska during this period of low oil prices?
  8. What plans do state leaders have to increase Alaska’s dismal level of economic freedom?
  9. Will the State of Alaska commit to existing negotiations on the gas project or will it change it up like last year?
  10. Will there be yet another shake-up of the Alaska Gasline Development Corporation this year?
  11. Will Alaska threaten a gas reserves tax on the industry again in 2016?
  12. Will offtake points for in-state gas supply be selected this year?
  13. Are we committed to utilizing the full extent of our resources to advance AKLNG or is ASAP still a potential option?

A lot remains to be seen in 2016, but the year certainly hasn’t started strong for many Alaskans. Oil has plummeted and many are forecasting that the low price environment is here to stay for some time. The challenges of 2016 will be great for many Alaska businesses and for our state. Strong leadership and smart fiscal decisions are needed to keep Alaska on sound footing. Headlamp hopes that everyone in Juneau will keep this in mind.