Institute of Social and Economic Research, University of Alaska Anchorage
Abstract
We provide a broad overview of the state’s economic and fiscal conditions. We show how the economic
contraction has spread away from natural resource and mining and state government to household
spending dependent sectors. We also show that while the rate at which jobs are being lost has slowed, it
is inaccurate to think about that as a sign of a recovery. That is because the engine of growth that is
O&G employment as of June 2017 was only 75% of what it was in 2014. Additionally, the softness in
spending activity may linger for an extended period of time.
We also assess the regional effects of the recession and show the significant heterogeneity in
experience. Unsurprisingly, areas with economic bases not associated with Oil and Gas and with
relatively little dependence on state government spending are holding up best.
After establishing an understanding of the economic conditions, we offer a back of the envelope
calculation of the capital investment losses associated with the fiscal uncertainty. Then, we provide a
comparison of Alaska’s taxes relative to the rest of the US, and a simulation of the effects of different
withdrawal amounts on the permanent fund balance and the earnings reserve.Northrim Ban