Alaska Has Lost A Greater Share Of Revenue Than Most States Due To COVID-19

Alaska Public Media | By Andrew Kitchenman

Published August 3, 2020 at 7:00 AM EDT

This story is part of an NPR nationwide analysis of states' revenue and budgets during the pandemic.

Alaska's government expects to bring in $815 million less in revenue this year than it did before the pandemic, and $693 million of that is because of drops in oil prices and production.

The politically divided state legislature was already struggling to agree on a solution to the state's prior budget deficit, now more than $2 billion.

Former budget analyst Pat Pitney described the dilemma in April. "Oil is less than a quarter of the funding necessary for our annual budget," Pitney said. "Where, prior to 2013, it was over 100% of our budget requirement." Pitney recently left her position to become the interim president of the University of Alaska.

Budget options include permanently lowering the annual payments from the oil wealth fund that go to every Alaskan or drawing down savings, which the state has depended on for the future.

Last year, in his first year in office, Republican Gov. Mike Dunleavy proposed nearly $1.5 billion in budget cuts, prompting a backlash that turned into an attempt to recall him. He didn't repeat that proposal this year.

Meanwhile, Alaska remains the only state without statewide income or sales taxes, but there is a proposed 2020 ballot measure that would require major oil producers to pay more in taxes.

Andrew Kitchenman is the state government and politics reporter for KTOO News and Alaska Public Media.