The Department of Revenue’s (DOR) spring revenue forecast update was released yesterday and presented this morning in Senate Finance. You can access the full presentation here.
In a nutshell: An increase in oil prices and production has led to an adjustment in the state’s forecast that adds $332 million in unrestricted general fund revenue in 2021 and $460 million in 2022.
Dan Stickel, chief economist for DOR, led the committee through the details of the forecast, focusing on background and key assumptions.
Key Alaska Economic Indicators
- Real state GDP is up 7.2% from Q2 2020 but still down 4.9% from Q3 2019.
- Employment is down 23,000 compared to January 2020 with leisure/hospitality, transportation/warehousing and oil/gas industries seeing heaviest impacts.
- Wages & Salaries are up 5.2% from Q2 200 and flam from Q3 2019.
- Foreclosures: 98 in Q3 2020, 303 for calendar year 2020 (through Q3) compared to 197 in Q3 2019 and 729 for calendar year 2019.
- Housing Starts: 1, 494 for calendar year 2020 compared to 1,689 for calendar year 2019.
- Delinquency Rates: 1.4% for mortgages 30-89 days delinquent, .4% for mortgages 90+days delinquent at end of FY 2020. Compared to 1.5 % for mortgages 39-89 days delinquent, .4% for mortgages 90+ days delinquent at end of FY 19.
Key Assumptions:
- Stable growth in investment markets.
- New stimulus package passed in March not included.
- ANS oil price of $53.05 per barrel for FY 2021 ($7 increase over fall forecast) and $61.00 per barrel for FY 2022 ($13 increase over fall forecast).
- No further oil production curtailments.
- Most economic activity will return to baseline levels by FY 2022, except tourism full recovery by summer 2024.
To access the entire Spring 2021 Revenue Forecast, click here.