Alaska's state government, already battered by a crash in oil prices, will see even less natural resource revenue in the coming fiscal year, according to a new forecast from the state's revenue department.
And even that prediction may be rosy: The forecast, released Tuesday, suggests oil prices will average about $50 a barrel during the one-year period ending June 30. That prediction was about right between July and October, but prices have dropped over the past month to a new low of $38 a barrel as of Monday, without much hope of an immediate recovery. Total statewide oil production also dropped by 5 percent over the last fiscal year, to an average of 519,500 barrels a day.
If the prediction holds, Alaska will bring in just over $1 billion in unrestricted petroleum revenue and $1.6 billion in total unrestricted revenue — down from the $2.2 billion projected for the same period in the previous revenue forecast in April. The state took in $2.3 billion in unrestricted revenue last year and $5.4 billion the year before that.
The per-barrel oil price is predicted to recover to $56 per barrel over the next one-year period, helping drive the state's unrestricted revenue back up to $1.8 billion.
The projected revenues are far less than Alaska spends each year. But Gov. Bill Walker will announce his next proposed budget Wednesday, a spending plan likely to contain new revenues to manage the fiscal crisis, including a guarantee of more stable funding for state services through investment returns from a reconfigured Permanent Fund. Since oil began flowing through the trans-Alaska pipeline in 1977, oil taxes and royalties have been the primary source of unrestricted state government revenue.
Revenue Commissioner Randy Hoffbeck didn't immediately respond to a request for comment about Tuesday's forecast.