9,413 research outputs found
Web Note No. 14
In fiscal year 2014, Alaskaâs state government can afford to spend about 149 billionâa combination of state financial assets (the Permanent
Fund and cash reserves) and the value of petroleum still in the ground.
The size of that nest egg fluctuates, depending on the stateâs forecast of petroleum revenues, earnings on
investments, and other factors. This Web Note presents the latest in a series of estimates of the
maximum amount the state can spend and still stay on a
sustainable budget path.Northrim Bank
High Oil Prices Give Alaskans a Second Chance: How Will We Use this Opportunity?
Think about this: 10 years ago, it looked as if Alaska was on the brink of a tough transition to a post-Prudhoe Bay economy. Oil production was half of what it had once been, the stateâs oil revenues were about 27 a barrelâand that was high by historical standards.
Things have changed dramatically since then: a combination of much higher oil pricesâabout $115 a barrel as this paper is being writtenâand revisions in the way the state calculates production taxes have caused state oil revenues to skyrocket, even though oil production is down 40% since 2002. We now find ourselves in a second huge oil-revenue boom, comparable to the one in the early 1980s (Figure 1 ).Northrim Ban
Oil Pumps Alaska's Economy to Twice the Size - But What's Ahead?
Oil money has driven most of the growth and paid for state
government operations in Alaska for 40 years. Weâve
all gotten used to that money, so itâs easy to
underestimate how much of the stateâs
prosperity is built on oil. Think about this: without
oil, the economy today would be only half the size.
But now times are changing. The North Slope
is producing just a third the oil it once didâand thereâs a danger
Alaskans will assume the state can keep going the way it is, without
future oil development. Not true.Northrim Bank
Web Note No. 9
In 2008 the Alaska Legislature passed and the governor signed into law a bill requiring the
Office of Management and Budget (OMB) to prepare an annual state fiscal plan projecting state
spending for 10 years and identifying the revenue sources to pay for that spending. One
objective of the law was to get government and the general public thinking, discussing, and
planning for the long-term fiscal health of the state in light of declining oil production.
These plans have not attracted the attention they deserve. In this Web Note we review the most
recent fiscal year 2012 10-year plan and offer suggestions for improvement.Northrim Bank
The Alaska Permanent Fund Dividend: A Case Study in the Direct Distribution of Resource Rent
The Alaska Permanent Fund is a sovereign wealth fund of the state of Alaska established in 1976
by a vote of the people to preserve part of the revenues from current oil production for future
generations. Twenty percent of direct petroleum revenues have been deposited into the fund
which now has a balance of 35 billion.
The successes of the fun in saving a share of the Alaska petroleum windfall and generating income
are due to several factors. The boom-bust economic history of the state has been a reminder of
the need to actively manage public resources. Fund management is independent of general
government finances and extremely transparent. It invests to maximize long run income.
In addition, the modest share of petroleum revenues set aside in the fund has left enough
available for the state to expand public spending, including the establishment of a number of
programs designed to strengthen the economy in recognition of the non sustainability of the
petroleum sector. Since these public programs benefit particular segments of the population, the
Alaska Permanent Fund dividend program was created in 1982 to provide an annual unconditional
direct cash distribution to all Alaska residents. The dividend was felt to be the most equitable way
to distribute a share of the public wealth of the state to the entire population.
Since the inception of the program, the dividend has been paid each year. About half of
Permanent Fund earnings have been allocated to the dividend program and the rest to increasing
the balance in the fund. The size of the dividend has increased as the fund has grown, but it
fluctuates considerably because fund earnings change from year to year. In 2010 the dividend
payment was $1,281 which augmented per capita income by 3 percent.
The dividend program has become extremely popular since most Alaskans feel that individuals
can benefit more from deciding themselves how to spend at least a portion of the public wealth
rather than allowing the government to decide on their behalf. However a minority of the
population feels the dividend fosters an attitude of consumerism and leads to underinvestment.
And although the dividend has created a strong constituency defending the Alaska Permanent
Fund, which many feel is the main reason for the success of the fund, there is concern that the
dividend will prevent the fund from being used for its ultimate purpose which is to help support the
economy after petroleum production ends.
Beyond its obvious positive impact on aggregate income, employment and population, little
analysis has been done of other economic, social, and political effects of the dividend program.
Because the dividend is not viewed as a policy to improve social welfare, but rather as a means to
share public wealth equitably, interest in these other potential effects has been limited.The Revenue Watch Institut
Annual Report for the Construction Industry Progress Fund and the Associated General Contractors of Alaska
The Construction Industry Progress Fund (CIPF) and the
Associated General Contractors (AGC) of Alaska are pleased
to have produced another edition of âAlaskaâs Construction
Spending Forecast.â
Compiled and written by Scott Goldsmith and Mouhcine
Guettabi of the University of Alaskaâs Institute of Social and
Economic Research (ISER), the âForecastâ reviews construction
activity, projects and spending by both the private and public
sectors for the year ahead.
The construction trade is Alaskaâs third largest industry, paying
the second highest wages, employing nearly 16,000 workers with
a payroll over 8 billion
to the stateâs economy. The construction industry reflects the pulse
of the economy. When it is vigorous, so is the stateâs economy.
Both CIPF and AGC are proud to make this publication available
annually and hope it provides useful information for you.
AGC is a non-profit, full service construction association for
commercial and industrial contractors, subcontractors and
associates. CIPF is organized to advance the interests of the
construction industry throughout the state of Alaska through
a management and labor partnership.Northrim Bank.
The Associated General Contractors of Alaska.
The Construction Industry Progress Fund
2010 Alaska's Construction Spending Forecast
The total value of construction
spending âon the
streetâ in Alaska in 2010 will
be 4.0 billionâ
down 4% from 2009.
Private-sector construction
spending will be down only
1% from 2009, to 2.6 billion, in spite of
the infusion of cash from the
American Recovery and
Reinvestment Act (ARRA).
Although some categories of
federal spending will be higher,
many will be lower and
state spending will also be
lower because of the lean FY
2010 capital budget.
Uncertainty in this yearâs
forecast comes from several
sources. As we start 2010
there is no clear indication
if the national economy is
starting to recover from the
recession, and if it does, how
strong that recovery will be.
Although Alaska has been
insulated from the worst
effects of the recessionâthe
crash in the housing market,
high unemployment, and
lack of creditâconcerns
about the national recovery
will continue to influence
investment decisions in the
state, particularly in the
commercial and residential
markets. Local government
capital spending is also
vulnerable to reductions in
tax revenues from activities,
like tourism, driven by the
national economy.
The passage of the American
Recovery and Reinvestment
Act (ARRA) in early 2009
has provided an important
boost to construction spending
this year. A second stimulus
may be undertaken later
this year, but it is too soon to
speculate on how that might
impact construction spending,
so we assume no further
federal action.
The Alaska economy contracted
in 2009 for the first
time in 22 yearsâbut the
reduction in employment
was only about 1%. Forecasts
for Alaskaâs economy in 2010
vary from further moderate
declines in employment to a
resumption of growth. This
difference of opinion underscores
the sense of caution
in the business community
about the near-term
prospects for the economy.
As the year begins, petroleum
and precious metal (gold
and silver) prices are strong
and rising, and base metal
prices (zinc) have rebounded
from the lows of last year.
Petroleum and mining capital
budgets are particularly sensitive
to these prices, which are
likely to continue to fluctuate
throughout the year. We
assume these prices remain
strong throughout the year.Construction Industry Progress Fund.
Associated General Contractors of Alaska
Propane from the North Slope: Could It Reduce Energy Costs in the Interior?
Could propane from the North Slope cut energy costs in Fairbanks and
other Interior communities that heat buildings or generate electricity
with fuel oil or naphtha? The Alaska Natural Gas Development Authority
(ANGDA) thinks it could.
Thatâs because a North Slope producer has agreed to sell ANGDA
propane for considerably less than what it might otherwise cost, if there
were a natural gas pipeline. Propane is a component of North Slope natural
gasâand right now thereâs no way to get that gas to market.*
Naphtha and fuel oil, by comparison, are refined from oilâso their
prices are closely tied to the volatile price of crude oil. ANGDA hopes getting
a price break on propane could make it cheaper, at least until a pipeline
is builtâand it asked ISER to analyze the potential effects of one idea.Alaska Natural Gas Development Authorit
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