Monthly Archives: June 2011

Alaska Fiscal Policy| Alaska’s Legislature Is Spending Away Alaska’s Future

An article in yesterday’s Anchorage Daily News caught my attention.  The article — “Parnell budget vetoes due in next 2 weeks” — reports on the status of the Parnell Administration’s consideration of the Alaska capital and operating budgets passed during the recent legislative session.

The truth?  The Alaska Legislature is spending away Alaska’s future.  In a recent report, UAA’s Institute for Social and Economic Research concluded that while oil production has built the Alaska economy, extending the current production and revenue numbers past 2020 reveals “a story of significant decline.”  See Alaska’s Petroleum Industry, Transformative But Is It Sustainable,” University of Alaska Anchorage, Institute for Social and Economic Research (April 2011). Continue reading

Perkins Coie Ranked Among Alaska and the Nation’s Best …

Chambers USA ranks the leading firms and lawyers in an extensive range of practice areas throughout America. The guide is read by industry-leading companies and organizations worldwide. It is also widely used by firms in all states for referral purposes.

As in prior years, this year Chambers USA once again ranked Perkins Coie’s Alaska Environmental, Natural Resources and Regulated Industries’ practice as one of the state’s best.  This year’s comment by Chambers: Continue reading

Once again, Sen. French Misses the Point …

In a Compass piece appearing in today’s Anchorage Daily News, Sen. Hollis French argues that Alaskans should not be concerned about the level of oil taxes because a recent judicial opinion finds that TAPS may continue operating for longer than Sen. French suggests some have recently argued.  See H. French, “Judge’s ruling underscores longevity of oil pipeline,” Anchorage Daily News (Jun. 16, 2011).

Once again, Sen. French misses the point.  As Scott Goldsmith/ISER have pointed out, even assuming the pipeline operates forever (which it won’t — Sen. French also overlooks the point about whether it will be economic to make the investments necessary to heat the pipeline as production continues to decline), the revenues from oil will fall in the near future to levels below those needed to sustain Alaska state government as we have come to know it.  See S. Goldsmith, “Revising the State Fiscal Plan to Account for Petroleum Wealth,” Web Note 9, Institute for Social and Economic Research, University of Alaska Anchorage (May 2011).   Even with the most optimistic assumptions about oil decline, the State will start eating into savings in 2018 and all savings will be gone by at least 2028, and possibly as early 2023.

Continue reading

Recommended Reading: Professor Haycox’s June 10, 2011 Commentary

Dr. Stephen Haycox, Commentary: “Spending Cap Would Simplify Oil Taxes,” Anchorage Daily News, June 10, 2011.

Written by one of Alaska’s foremost historians and observers, this commentary endorses the recent proposal from Scott Goldsmith of UAA’s Institute for Social and Economic Research (ISER) to bring a rational order to Alaska’s current spending spree.  Like Goldsmith, Haycox recognizes that Alaska’s current fiscal policy undermines the economic outlook for future generations of Alaska.  In Dr. Haycox’s words, “The concern over Alaska’s economic future in the face of the fall-off of Prudhoe Bay production is appropriate. … Scott Goldsmith of UAA’s Institute for Social and Economic Research suggests we cap petroleum spending at $5 billion annually …. It’s an elegant solution to the current panic ….”  Read Dr. Haycox’s full commentary at the above link.  The Goldsmith paper is “Revising the State Fiscal Plan to Account for Petroleum Wealth,” Institute for Social and Economic Research, University of Alaska Anchorage, Web Note 9, May 2011.

Recommended Reading: ISER’s View of Alaska’s Future Economy

Institute for Social and Economic Research (ISER), University of Alaska Anchorage: “Alaska’s Petroleum Industry:  Transformative, But Is It Sustainable,” April 2011.

The above analysis from ISER provides an  excellent overview of the fundamentals of both Alaska’s current economy and its future outlook. Oil production has built the Alaska economy, but extending the current production and revenue numbers past 2020 reveals “a story of significant decline.” What does that mean for Alaska and Alaskans? Read the easy to understand ISER analysis at the following link.