Oil Plunge Forces Soul-Searching on How to Pay Alaska’s Bills

[Purveyor]

by Jennifer Oldham
June 3, 2015 — 9:51 AM EDT

Oil has been Alaska’s lifeline. The collapse of crude prices could change everything.

Lawmakers are embroiled in a stalemate over how to fill a $3.5 billion deficit after oil’s plunge sapped two-thirds of the state’s revenue. If oil remains near a six-year low, as some analysts project, it will deplete Alaska’s $10 billion reserve fund by 2018.

The nation’s second-youngest state depends more than any other on royalties and taxes from oil production, which fund 90 percent of its budget. Governor Bill Walker, an independent, is preparing for a government shutdown amid the impasse and has called on policy makers to consider how a state without income or sales taxes will pay its bills. He’s even said a lottery is an option.

“Self-determination was at the heart of our quest for statehood,” Walker wrote in a May 31 opinion piece in the Juneau Empire. “Once again, Alaska is at a decision point. With oil revenue alone unable to sustain us, how do we chart a new course?”

Alaska isn’t alone. Other oil-rich states such as North Dakota have had to dismiss employees, raid rainy-day funds and revisit how they tax energy firms.

Plumbing the icy, remote tundra for natural resources is expensive and time-consuming, a process that has fueled a years-long debate over how to tax companies without discouraging drilling.

more...

http://www.bloomberg.com/news/articles/2015-06-03/oil-plunge-forces-soul-searching-on-how-to-pay-alaska-s-bills

[Erich Bloodaxe BSN]

1. Time to add an income tax and property taxes.

We're seeing all these shows pop up on cable about Alaska, and there's one even dedicated to 'million dollar home buyers', so some folks with lots of scratch are moving there or living there.