Scott Goldsmith, a University of Alaska Anchorage economist, has lowered his estimate of what the state can afford to spend next budget year and over the long haul.
In an analysis released Thursday, Goldsmith put the figure at $5 billion from the main state general fund pot. He earlier had estimated the state could spend $5.5 billion.
The change came because the state Department of Revenue projected a big drop in oil revenues and the need for bigger-than-expected draws from savings to cover deficits for the 12 months ending June 30 as well as the year before, Goldsmith noted.
Goldsmith for years has been calling for the state to set a spending level that it can sustain over the long haul without running out of money.
With a $5 billion cap that only grew as fast as population and inflation, the state savings accounts would last much longer than if too much were spent now, he wrote.
Gov. Sean Parnell has proposed spending $5.6 billion from the unrestricted general fund, and legislators will likely want to increase that, he said.