Alaska predicts sharp oil tax decline amid low prices

  • By Becky Bohrer
  • Tuesday, December 8, 2015 10:34pm
  • News

JUNEAU — The state of Alaska is projecting revenue from oil and gas production taxes at $172 million this year, a dramatic drop from two years ago when production taxes totaled $2.6 billion.

Continued low oil prices contributed to the decline. “Nobody’s making any money on oil,” deputy Revenue Commissioner Jerry Burnett said.

In a report released Tuesday, the state Revenue department said production taxes for fiscal year 2015, which ended June 30, totaled nearly $390 million.

Alaska relies heavily on oil revenues to fund state government and is currently grappling with an estimated $3.5 billion budget deficit amid chronically low prices. In recent years, petroleum revenue provided about 90 percent of the money available for spending. Last year, that dropped to 75 percent, and it’s not projected to provide more than 72 percent during the rest of the decade, the report said.

Gov. Bill Walker is expected to release his budget proposal for fiscal year 2017 on Wednesday. In an opinion piece released Tuesday afternoon, Walker said his plan “might not make me the most popular governor, but I didn’t run to be popular. I ran because I love Alaska and am committed to doing the best by our state and our people.”

The state is also pinning high hopes on a major proposed liquefied natural gas project.

The revenue forecast is based on an annual average North Slope oil price of about $50 a barrel for the current fiscal year. Alaska crude closed just over $38 a barrel on Monday. This past spring, the department forecast a price of $66 a barrel.

The department is forecasting $1.6 billion in unrestricted general fund revenue for the current year. That is money that has no restrictions on how it can be spent. It’s down from $2.3 billion last year. The department attributed the projection to low oil prices.

North Slope oil production decreased from 531,100 barrels a day in fiscal year 2014 to 501,500 barrels per day last year. The department is projecting production around 500,000 during the current year.

A fuller report is expected to be published later this month.

More in News

Shawn Dick of Talkneetna carries a fresh catch out of the water while dipnetting on the Kenai Beach on July 10, 2020. (Peninsula Clarion file)
Kenai River dipnetting opens this month

The Kenai River personal use dipnet fishery opens July 10

The sun is seen shining above the Kenai River in Soldotna, Alaska, on July 14, 2020. (Photo by Erin Thompson/Peninsula Clario file)
When the temperature hits 70, Alaskans feel the heat — and start suffering health ills

Acclimatization, the angle of the sun at high latitudes and other factors make summer heat more intense in Alaska

A map shows active fires around the state of Alaska on Friday, July 1, 2022. (Screenshot from Alaska Wildland Fire Information Map)
Fire danger prompts restrictions on burning, fireworks

There were 160 fires in Alaska as of Thursday, and of those 17 were staffed with fire personnel

Jessica Cook, left, and Les Gara are photographed in The Peninsula Clarion’s offices Thursday in Kenai. (Ashlyn O’Hara/Peninsula Clarion)
Gara, Cook campaign on the Kenai Peninsula

The pair cited education funding, reproductive rights and election security as priorities

A map shows the Seward Highway MP 17-22.5 Rehabilitation Project area. The Seward Highway between Mileposts 17 and 22.5 — from about Primrose Campground to near Teddy’s Inn The Woods — will be closed from 8 p.m. and 5 a.m. on Mondays and Wednesday starting July 18, 2022. (Screenshot)
Roadwork in Moose Pass to shut parts of Seward Highway

The Seward Highway between Mileposts 17 and 22.5 will be closed from 8 p.m. and 5 a.m. on Mondays and Wednesday starting July 18

Former Homer High School athletic director poses on Friday, July 1, 2022, at the high school athletic field in Homer, Alaska. (Photo by Michael Armstrong/Homer News)
Work ethic, grit and teamwork

After two decades, Homer athletic director says goodbye to program he helped build

Assembly members participate during a meeting of the Kenai Peninsula Borough Assembly on Tuesday, June 21, 2022, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Another renewable energy company seeks to set up peninsula solar farm

Utopian Power wants to build a two-megawatt solar farm on a 40-acre chunk of land owned by the borough

COVID-19. (Image courtesy CDC)
COVID hospitalizations up from last week

Hospitalization data is the most effective indicator of the prevalence of the virus

Most Read