JUNEAU, Alaska (AP) – After years of being flush with oil money, Alaska now faces drastic budget cuts and having to dip into well-stocked savings to offset unprecedented deficits exacerbated by an unexpected plunge in oil prices.
When lawmakers left Juneau last April, the price of North Slope crude, Alaska’s economic lifeblood, was $107 a barrel. On the eve of a new legislative session, starting Tuesday, the price had dropped by more than half.
Alaska heavily relies on oil revenue to fund the cost of state government, but the fall in prices has contributed to an estimated 80 percent decline in the state’s share of production taxes from last year.
The new governor, Republican-turned-independent Bill Walker, is among those calling for a look at revenues along with budget cuts, but that could involve ideas that no one who dreams of re-election is eager to take up.
Among those ideas are instituting a personal income or sales taxes, or tapping Alaska’s oil wealth fund, which provides nearly every Alaskan with a yearly check just for living here.