Today, AKHEADLAMP waits for Governor Walker to introduce his FY 2019 budget. We will skip our normal format for today’s post and provide this background information provided by the Department of Revenue in their annual Fall Revenue Forecast, for our readers to consider:
- General fund unrestricted revenues totaled only $1.35 billion in FY 2017, the lowest level for unrestricted revenue since the late 1990’s. The department is forecasting unrestricted revenue of $2.1 billion and $2.0 billion for FY 2018 and FY 2019, respectively.
- The State of Alaska received an estimated total of $12.1 billion in revenue in FY 2017 from all sources, more than double the FY 2016 total. The big increase was mostly due to strong investment returns as the Alaska Permanent Fund returned over 12% for the fiscal year. The Department of Revenue forecasts total revenue of $10.3 billion in FY 2018 and $11.0 billion in FY 2019.
- Given the state’s budget requirements and the low levels of unrestricted revenue which are expected to continue for the foreseeable future, the Commissioner of Revenue believes that using a portion of Permanent Fund earnings for government operations is both prudent and necessary, provided that use of Permanent Fund earnings is limited to a level that is sustainable over time.
- The revenue forecast is based on an annual average ANS oil price of $56.00 per barrel for FY 2018 and $57.00 per barrel for FY 2019. Actual Alaska North Slope oil prices averaged $49.43 in FY 2017. Oil markets appear to have come into balance over the past year, and the Department of Revenue projects that annual average prices will stabilize around $60 per barrel in real terms going forward.
- For FY 2017, Alaska North Slope crude oil production averaged 526,500 barrels per day, an increase of 11,600 barrels per day over FY 2016. The Department of Revenue forecasts North Slope production of 533,400 barrels per day in FY 2018 and 525,700 barrels per day in FY 2019.
To read the entire revenue forecast, click here. AKHEADLAMP will provide analysis of the full budget on Monday.