New revenue forecast tied to lower oil prices adds $300M to Alaska’s budget shortfall
JUNEAU — Alaska’s budget deficit just got worse — $300 million worse.
The numbers come from a preliminary version of the spring 2016 revenue forecast released Monday by the Department of Revenue, which shows lower oil prices than projected in the 2015 fall forecast.
Revenue projections are based on $40 a barrel oil, versus the $50 per barrel estimate put forward in December 2015. Total general fund unrestricted revenue is now estimated at $1.3 billion by the end of the fiscal year, and $1.2 billion by fiscal year 2017.
The new estimates represent a 17 percent decrease, $300 million less than total revenue projected in the fall forecast.
The department anticipates oil prices to hover between $30-$40 a barrel over the next 15 months, and to stay lower than originally projected for the next 10 years, eventually reaching $60 a barrel in fiscal year 2021.
“In any case, petroleum revenue will likely not exceed $1.3 billion this coming year, or the next,” said Department of Revenue commissioner Randall Hoffbeck in a press release Monday.
Hoffbeck said he released a preliminary version of the report to aid in budget discussions. The final version is expected to be released the first week of April, incorporating information from annual production tax returns due by March 31, 2016.
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