(SitNews) Juneau, Alaska - Alaska Department of Revenue (DOR) Commissioner Lucinda Mahoney released the Spring 2022 Revenue Forecast today.  The Revenue Forecast includes the Department’s spring forecast of oil price, oil production, and state revenue. 

Unrestricted General Fund (UGF) revenue, before accounting for the transfer from the Permanent Fund Earnings Reserve, is forecast to be $3.9 billion in fiscal year (FY) 2022 and $5.0 billion in FY 2023.

The Permanent Fund is expected to transfer $3.1 billion to the General Fund in FY 2022 and $3.4 billion in FY 2023.  These amounts include funds that are available for general government spending and the payment of dividends.  With continued growth of the fund, the Permanent Fund transfer remains a large source of UGF revenue, contributing 65% of UGF in FY 2021 and projected to contribute in the range of 40% to 62% in each of the next ten years. 

For FY 2021, Alaska North Slope (ANS) oil prices averaged $54.14 per barrel.  The revenue forecast incorporates the most current indications from financial markets and is based on an annual average ANS oil price of $91.68 per barrel for FY 2022 and $101.00 per barrel for FY 2023.  Prices are expected to decline beyond FY 2023, stabilizing at $77.00 per barrel by FY 2031.

For FY 2021, ANS oil production averaged 486,100 barrels per day.  ANS oil production is expected to average 481,800 barrels per day in FY 2022 and 502,300 barrels per day in FY 2023, before climbing to 576,600 barrels per day by FY 2031.  

Compared to the Department’s Fall 2021 Forecast which was released in December 2021, the ANS oil price forecast has increased by $15.96 per barrel for FY 2022 and $30.00 per barrel for FY 2023.  The ANS oil production forecast decreased by 4,900 barrels per day for FY 2022 and increased by 2,200 barrels per day for FY 2023.  Driven by this improved outlook for oil price, the Unrestricted General Fund (UGF) revenue forecast has increased by $1.2 billion for FY 2022 and $2.4 billion for FY 2023.  

Former Governor Bill Walker released a statement on the State of Alaska's updated revenue forecast:

"Alaska's short-term revenue outlook is bright for the first time in a decade. While the global events that led us here are incredibly tragic, we are fortunate to have the ability to provide a healthy dividend, a one-time energy relief check to help Alaskans confront high gas prices, and to pay for teachers and troopers, park facilities, roads, Pioneer Homes, and every other essential service the state provides. I thank the legislators who are committed to spending this windfall wisely and recognize that we need to begin replenishing the $27 billion in savings we have spent down since deficit spending began in 2013. 

While the revenue picture looks good today, we need to follow the example of the leaders who created the Permanent Fund and save while we can. We should also prioritize investments that will rebuild Alaska's economy and pass legislation that will make it so our schools are not forced to make cuts because of inflation again this year."

Bill Walker served as the eleventh governor of Alaska. He is seeking office again in 2022, running with Heidi Drygas. Incumbent Mike Dunleavy, Les Gara, Christopher Kurka, Bruce Walden, and Bill Walker are running in the primary for Governor of Alaska on August 16, 2022. Jessica Cook, Heidi Drygas, Edie Grunwald, and Tanya Lange are running in the primary for Lieutenant Governor of Alaska.

The Spring Revenue Forecast is an annual update to the Fall Revenue Sources Book, providing basic information about state revenue, as well as a forecast of state revenue over the next ten years.  The Spring 2022 Revenue Forecast will be made available Tuesday, March 15, 2022, at 1:30 p.m. on the Department’s website, at www.tax.alaska.gov.

The online interactive 10-year fiscal model, which is available on the DOR and Tax Division websites, will be updated shortly to include a revenue scenario that includes the Spring 2022 forecast.  The interactive fiscal model is available online at https://dor.alaska.gov/ and www.tax.alaska.gov.

On the Web:

Spring 2022 Revenue Forecast

Edited By: Mary Kauffman, SitNews



Source of News:

Alaska Department of Revenue
www.dor.alaska.gov

Walker Drygas for Alaska
www.walkerdrygas.com

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