Business/Economy

State forecast for 2018 revenue jumps by $250 million as oil prices rise

Thanks in part to increased oil prices, Alaska expects to earn $2.1 billion in unrestricted general fund revenue in the current budget year, up by $247 million from a preliminary report issued just weeks ago.

Other factors contributing to the increase include unexpected production tax payments made after that preliminary report was issued, and an adjustment to mineral royalties being deposited into the general fund, said a statement from the Department of Revenue Tuesday.

The statement accompanied the release of the state's fall revenue sources book, an annual look at state income with a decade-long forecast. The prediction for unrestricted general fund income in the 2018 fiscal year, ending in June, is up from last year's $1.35 billion, the lowest level since the late 1990s.

Alaska officials in late October issued the unusual preliminary report to inform lawmakers' discussions during a special session that included budget matters.

North Slope oil prices that help determine critical royalty and production tax revenues have jumped, to close to $64 a barrel on Monday, up from about $56 a barrel in early October.

The state also slightly raised its long-term oil price forecast since the preliminary report.

"Oil markets appear to have come into balance compared to prior periods," said Sheldon Fisher, revenue commissioner.

He said the department expects oil prices to steadily increase, reaching $75 a barrel in a decade.

The preliminary report in October cited better-than-expected oil production as contributing to increased revenue forecasts. That report warned Alaskans that the annual budget deficit still exceeded $2.5 billion.

Sponsored