The appearance before Senate Resources last Thursday was interesting. The slide deck for my testimony is here. As I said to the Committee, the “August 9” date on the cover is likely because it was snowing (again) the day I did the slide and my subconscious was wishing for another season. The actual date, of course, was February 9.
The video of the hearing is here. My appearance begins at 35:35. There were several questions and comments by members of the Committee. The most extensive comments came from Senator Stedman. Part of my presentation contained a series of slides and discussion around recent forecasts made by the Office of Management of Budget (“OMB”). The forecasts come from the most recent OMB 10-year plan and compare the level of state expenditures against revenues over the ten year period beginning with Fiscal Year 2012.
Due to declining oil production, the OMB report clearly shows and my testimony reflects that Alaska government starts running a deficit (expenses exceed revenues) sometime this coming decade under all of the scenarios addressed in the plan. Under OMB’s most probable scenario, the deficits start in FY 2016 — a little over three years from now — and continue to deepen through the remainder of the decade. But that scenario assumes the continuation of very robust oil prices, ranging from an average of roughly $109/bbl in FY 2012 to $120/bbl in FY 2022. Continue reading