Rising oil prices drove up state oil revenues in the 2011 fiscal year by more than $2 billion, with total oil revenues to the state topping $7 billion for the year, according to the Alaska Department of Revenue.
For the current fiscal year, revenues are projected to go up even further and top $8.2 billion, driving the state to another budget surplus, according to the department’s Fall Revenue Sources Book, released Thursday.
Those numbers are for unrestricted general fund revenues; other oil revenue was allocated directly into the Alaska Permanent Fund, more than $1 billion last year.
Alaska’s strong financial status was driven largely by the state’s ACES oil tax, passed in 2007 under former Gov. Sarah Palin. It allows the state to reap big rewards from the current high oil prices.
That’s given Alaska billions of dollars in savings and enabled the state to easily balance its budgets at a time when many other states are arguing about cutting services and raising taxes.
“Unlike most states, we have savings in the bank and we have healthy surpluses,” Parnell said.
Parnell and Department of Revenue Commissioner Bryan Butcher continued to advocate for reducing oil taxes, and called attention to the continued decline in oil production.
High prices, Butcher said, are “masking the underlying production decline.”
In 2011, the report shows, oil production declined by 6.3 percent, and was expected to drop 4.7 percent in the current fiscal year.
Parnell and Butcher have been highlighting the decline in oil production as they advocate for cutting the state’s oil tax, but Rep. Beth Kerttula, D-Juneau, said slashing it would be bad for the state.
“If we want to join the other 47 states that are in a depression, then the way to do it is to get rid of our oil tax,” she said.
As House minority leader, Kerttula joined with Palin to back the tax increase in 2007.
While oil revenues fund most state government operations and are closely watched, total revenue for the state is far higher, including federal dollars and investment earnings.
The total state revenues in 2011 were $19.5 billion, according to the Revenue Sources Book. Total oil revenue, unrestricted and restricted, was $8.1 billion, followed by investment earnings of $8 billion, federal contributions of $2.4 billion and $1 billion in other revenues.
Most of the investment earnings are in the Alaska Permanent Fund and Constitutional Budget Reserve and are not available for spending. The federal dollars going to the Alaska state government include funding for Medicaid and other formula programs.
• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.
Comments (19)
Add commentGood fo you Alaska
glad to heaqr your coffers are overflowing due to high oil prices.
However my excitement is subdued for selfish reasons, the $1,500 price to fill my oil tank didnt help my coffers so much. But hooray for you.
The Decline
Will continue to happen regardless of the taxes. The only difference under Parnell's plan is that the oil companies will pocket more money before they bail on us.
How about RAISING oil taxes and putting those revenues in a 'sovereign wealth fund' to pay for state services after the oil's gone.
Parnell's an oil company flunky, and when he gets tossed out of office in a couple years he'll slither right back into their boardroom.
surplus
Now is the time for the state to fund PERS and TRS soundly in to the future, and to modify Tier IV PERS to a defined benefit plan. These moves are an investment in Alaska's future, by offering incentives to professionals make a long term career commitment in public employment.
Cut the size of government, &
Cut the size of government, & save the money.
And our oil lobbyist Gov.
And our oil lobbyist Gov. Sean Parnell wants to cut taxes for the oil industry????
Lobbyists do NOT belong in Government on a State level and not on a Federal level.
We will never get at good policies with Lobbyists in our Government, because lobbyists work for Corporations, period.
This is why in the 21 century our country still does not have a sensiable energy policy and it is why our country has one of the most expensive health care system in the world!
Alaskans we need a real Governor to run this state, not a lobbyist.
We need a Governor that puts Alaskans first, that respects our VOTE, one that respects science, education and the Alaskan environment!
Our Lobbyist Governor works to undermine the people in this state every chance he gets
Comments
Latitude 58, we have a fund like you describe; it's called the Alaska Permanent Fund. Unless Parnell decides to run against Begich, Parnell will be governor for a record 12+ years. There are no known Democrats today that are of governor status, and an unknown thinking today about starting the climb has to look at what happened to Scott McAdams and wonder why bother (as Democrats voted against McAdams of course).
Rep. Kerttula needs to have her own plan to rebuild oil production instead of merely whining about Parnell's plan. She might begin by telling Obama that his now-aborted conversion to wind and solar didn't work so he should let Alaska produce more oil.
I agree with twogood and madison89, and their comments are not conflicting. However, the trend is solidly away from defined benefit plans in the private and public sectors. Perhaps because she is a Republican, the union leaders didn't offer much help to Rep. Munoz when she tried to move PERS & TRS back to DB, and now the window has solidly closed. Politics is all in the timing.
Incorrect, Gdoggie
The Permanent Fund is not intended to fund state operations. It's intended to hand out free money to residents.
Norway has an oil fund that will cover the country's expenses after the oil runs out.
And I have news for you: Parnell is not of 'governor status' either. He slipped into office only because your previous heroine, Palin, bailed on the job. He was elected because the voters didn't realize how fully corrupted he was by the special interests. They know now.
Agree with twogood and madison....
A surplus is only helpful if we PAY OUR BILLS FIRST, instead of spending any unexpected money like drunken sailors.
Honestly, if our legislators treated their own money like they treat "our" money, they would all be broke and homeless. I just don't get the disconnect between personal finances and public finances.
Lobbyist Sean Parnell is
Lobbyist Sean Parnell is using our Governors office to maximize benefits for the oil industry and this is in direct violation of our states constitution.
Our Governor is supposed to be working for Alaskans, not looking for ways to undermine us each day. I
We need a real Governor to run this state not an oil lobbyist.
Lobbyists do not belong in our of Government!
Leave ACES in place...
Keep the extra 2 billion a year and pay off (or at least pay down) the PERS/TERS unfunded liability! These pensions are Constitutionally mandated, so it isn't like there is any shot whatsoever of changing the Alaska Constitution in order to disenfranchise the Defined Benefit baby boomer group. Pay your debts Alaska, we have BILLIONS in the bank! Oil Companies will continue to do very well thank you without Parnell's lap-dog tax giveaway. Keep your eyes upon the Senate, becasue the knee-jerk House already passed Parnell's crazy tax give-away. Hopefully, sharper minds will prevail.
Gotta agree with you, wee one
Sarah wasn't our worst governor for those first couple years. She stood up to the oil industry, approved partner benefits for State employees... Imagine if she had made those accomplishments the centerpiece of her national campaign.
No one would have guessed that she'd turn into such a teabag d-bag when she saw the bright lights of Payree'.
But she did hate Southeast and screwed us every chance she got.
Senate President Gary Stevens
Senate President Gary Stevens (R), is standing up to oil lobbyist Parnell and he is taking crap for it.
Alert to Alaskans:
Our Chamber of Commerce members and the Resource Development Council are back stabbing legislators that are NOT supporting Parnells billion dollar give away to the corrupt oil industry.
Those that disagree with Parnells billions in tax breaks are being rated with an "F", and the legislators that are supporting Parnells giveaway are being rated with an "A".
I think its time to clean the house!
When is green red?
A lot of belly aching about the oil tax, we should be glad we have a commodity to sell on the open market. Whatever comes of the tax at least it won't add to the national deficit. Hopefully the feds will allow Alaska to utilize its resources, the tax could have no relevence if the state is shut down to become a state park. The real scam is Obama's green energy debacle. Billions spent, huge tax breaks, and nothing to show for it. Think I'll head down to the Automall to watch that new Chevy Volt catch fire.
The Best Alaska Governor
That would be Jay Hammond
Well, if you calculate the TERS and PERS thing...
...We would only be down a paltry 5 Billion by the end of the year if we paid down the 'unfunded liability' with our excess. We should pay up now as the future is uncertain.
Unless, of course, the republicans have no intention of paying up the unfunded liability, and plan to default on their obligations in the future so they can ditch the government employee's retirement funds.
And Wally Hickel
Wally Hickel
ACES is working!
If we are still reeling in billions in profits despite a decrease in production, then does that decrease in production really matter that much?
ACES is working! LEAVE IT ALONE!
There are excellent comments in here. I will summarize what I believe:
1. ACES is working. Leave it alone! It doesn't need to be tweaked.
2. Oil companies do not deserve, nor do they need the $2 BN/year tax cut proposed by our governor. He is a lap dog for the oil industry, and they will always attempt to pay less and get more no matter what happens. He is their spokesman.
3. With billions in reserve, it would be an absolute disaster to do anything with that money other than put it into PERS/TERS. That is the elephant in the room. PERS/TERS is billions in the red and counting. Put the surpluses there!
4. Beth Kerttula is governor material. She is awesome. She knows the oil industry. She was an oil attorney at the Attorney General's office! She needs to be our next governor!!! She has ballz!
5. Do not put a cap on the amount of taxes the oil companies pay, even when oil prices are high. We have the oil, we make the rules! In fact, I think we should tax them more!
6. Never believe Parnell or Murkowski's claim that the sky is falling. We are raking in billions from our oil. Let's keep it that way.
Tomorrow's headline
Tomorrow's headline: "Cloudy Day in Juneau: Parnell seeks tax cuts."
Monday's: "Oil Industry raking in record profits; Parnell seeks tax cuts"
Tuesday's: "PetCo opens soon; Parnell seeks tax cuts"
Wednesday's: Winter Weather Advisory in effect; Parnell seeks tax cuts"
Thursday's: PERS/TERS another billion in the red; Parnell seeks tax cuts"
oil prices
Alaska residents pay far more for oil and gas than other states. Some bush communities pay up to $10 per gallon for either. We also pay huge amounts for shipping. Walk into any store to shop, and you will pay $1 to $10 more than lower 48 for every item you put in your cart. The PFD check does not begin to cover the cost difference.