Mastodawn

The Friday P.M. "Goldilocks" Charts| We publish five charts Fri afternoons showing the impact of current futures $$oil on Alaska's fiscal outlook and three alternatives for resolving it. (Background: https://bit.ly/3UhbLCZ) #akleg

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Brad Keithley’s chart of the week: The new "Goldilocks" charts

Some readers will know that in addition to these weekly columns, we also regularly produce a series of daily charts focused on various aspects of Alaska oil, gas, and fiscal issues. We call one set of those charts, which we publish on Friday afternoons, the...… Read More

The Alaska Landmine

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AKs 4 Sustainable Budgets

𝙁𝙞𝙧𝙨𝙩, we update the 10-year outlook for the most recent $$oil futures prices and other updated information (now using the #AKGov's enacted budget for spending levels). Currently, the state is running an average annual 𝙙𝙚𝙛𝙞𝙘𝙞𝙩 over the next 10-year period of $1.97 billion (32% of the UGF budget, ~4.7% of Alaska AGI, ~2.9% of Alaska Private Sector GDP).

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AKs 4 Sustainable Budgets Feb 27

𝙎𝙚𝙘𝙤𝙣𝙙, we then look at four ways of closing the deficit.

* Retaining the current law PFD and using a flat tax to close the deficit instead,

* Restructuring the PFD as POMV 50/50, w/ the remaining deficit filled through a flat tax,

* Restructuring the PFD as POMV 25/75, w/ the additional deficit (above POMV 25/75) filled through a flat tax,

* Abandoning a rules-based PFD and using the "leftover" PFD approach (which reduces the PFD over the period to 17% of the POMV draw).

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AKs 4 Sustainable Budgets Feb 27

As the charts demonstrate, the first approach spreads the burden proportionately among all #AKfams. The second, third & fourth are increasingly regressive, taking more from 80% of #AKfams than the first approach.

As a measure of regressivity, at current deficit levels, the second approach (POMV 50/50) takes 2x more from the Low20% than the Top1%; the third approach (POMV 25/75) takes 14x more, and the fourth approach takes 36x more.

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