California Journal of Politics and Policy

After a bland start to the 2014 legislative session, fiscal year 2015 became interesting (and challenging) due to the defeat of an incumbent Republican governor and a rapid decline in the global price of oil.  Because taxes on oil generate around 90% of Alaska’s non-transfer revenues, and oil production from Alaska’s North Slope oilfields has been in decline since the late 1980s, the state faced a significant deficit going into FY2015. The decline in revenue led the legislature to pass a significantly reduced budget for FY 2015. At the same time, Alaska’s sovereign investments have increased in size in recent years and the state’s savings and investments totaled more than $60 billion, leaving it with reasonable options for balancing its budget over the long term, but no clear strategy for the future.