Does Alaska have a huge surplus or huge deficit?

February 19, 2011 11:37 AM

Can somebody explain to me how Alaska claims a budget surplus, yet is scores low nationally on deficit rankings?

I see articles claiming that Alaska has a huge budget surplus, and then see scores like this:
http://www.stateline.org/live/ViewPage.action?siteNodeId=136&languageId=1&contentId=15158

I don't understand.

posted by Raichle to Law & Government (8 answers total)

From the bottom of your link

Period Covered: Deficit figures are for the remainder of fiscal year 2003, which ends June 30 for most states, and the entirety of fiscal year 2004. They are estimates and are subject to change

Seems like that's pretty old data
posted by ghharr at 12:10 PM on February 19, 2011

Alaska is highly dependent on oil prices, so budgeting for the coming year is difficult. Projected surpluses can become actual deficits (and vice versa) due to oil market fluctuations.
posted by D.C. at 12:11 PM on February 19, 2011 [1 favorite]

This site seems to have some more up to date info on their budget. They get practically all of their revenue from taxes on oil so like D.C. says, fluctuations can mess them up.
posted by ghharr at 12:18 PM on February 19, 2011

It might have to do with the rebate checks, too. They can have a surplus of revenue, but then after the checks get sent out, they can be in deficit and have to borrow. I can't prove this is happening, but it is plausible that the state wouldn't want to reduce the rebate checks "in these hard times".
posted by gjc at 12:24 PM on February 19, 2011

Best answer: I believe the rebate comes from the Permanent Fund which isn't part of the regular state budget.
posted by ghharr at 12:38 PM on February 19, 2011

Best answer: The following wikipedia article discusses Alaska's Personal Fund Dividend, or "PFD." Also discusses Alaska's Congressional Budget Reserve, which was created to smooth out the budget in lean oil years: http://en.wikipedia.org/wiki/Alaska_Permanent_Fund

The Alaska State Division of Finance website explains how the Congressional Budget Reserve is used to cover budget shortfalls: http://fin.admin.state.ak.us/dof/financial_reports/index.jsp

But what you really want to see is the CBR spreadsheet covering FY 2002-2011:
http://fin.admin.state.ak.us/dof/financial_reports/resource/cbr_status.pdf
posted by L'oeuvre Child at 12:43 PM on February 19, 2011

oops. "Constitutional Budget Reserve"
posted by L'oeuvre Child at 12:49 PM on February 19, 2011

Ghharr is totally correct, the PFD is not part of the regular budget. Most of Alaska's budget comes from taxes on oil revenue. This data is from 2003, when a barrel of oil was about $25, the last of a series of low years. The price shot up soon after, peaking in 2008 at about $150/barrel and is still higher than in the early 2000's. The taxation of oil has changed slightly since then, bringing in more revenue. Also, there was a tightening of the government belt in the early 2000's and most state departments haven't gained back the budget and staff they had to ax. In Alaska's case, the situation has changed greatly since 2003.
posted by Foam Pants at 10:51 PM on February 20, 2011