I will use the GOP talking point of "I am not a scientist" but with a twist....I am not an economist but......
Here is your sign boys!
World oil price decline creates multibillion-dollar budget risk for Alaska
And because most of you will not take the time to read something that is not filtered through FOX I will do my cut and paste job for you...
�when all hell broke loose.�In June, the threat of a disruption on the world market by continued unrest in the Middle East sent prices climbing to $113, but in four months the world view has changed again. Oil is $30 cheaper, and the gaping hole in the Alaska budget is potentially hundreds of millions deeper
oil between $80 and $90, the state will be piling up annual deficits of $2 billion or more, with easily accessible savings that could last five or six years. That is not counting the $50 billion Alaska Permanent Fund.
The effective tax rate on the gross value at $80 is about 8.6 percent, while it is about 16.7 percent when the price per barrel on the West Coast is $100, the department says.
This sums it up neatly....
The last revenue forecast from the state in the spring predicted that oil prices would average $105 this fiscal year, which would mean a deficit of $1.3 billion, according to the Division of Legislative Finance.
The deficit would be $1.7 billion if oil prices average $100 a barrel this year, $2.1 billion if it drops to $95 a barrel and hundreds of millions higher if oil goes lower. And now we are at $88 a barrel.
In 5 years we may find that SB 21 has had an impact upon production and world oil prices have bounced back to $110 a barrel but in the short term (the next 5+ years) the state is screwed!
You can pretend all you want but the truth is the state will have to make some very hard choices on taping into the Permeant Fund, making some nasty cuts in services or the most likely scenario, both. Get ready for a really rough future and 50% sits squarely upon Parnell's shoulders but the word is he will be a well paid oil lobbyist by January 1st and why not! Our system really rewards the $hit Bags!
