Juneau – Department of Revenue (DOR) Commissioner Bruce Tangeman released the Fall 2018 Revenue Sources Book today. The Revenue Sources Book includes the Department’s fall forecast of oil price, oil production, and state revenue.
The fall forecast is the department’s first revenue forecast following passage of SB 26, which established a protocol for transferring a portion of the earnings of the Permanent Fund to the general fund each year. The department is presenting the estimated Permanent Fund transfer as unrestricted revenue beginning in FY 2019.
Under this structure, this Permanent Fund transfer will fund both the Permanent Fund Dividend as well as general government operations.
General fund unrestricted revenues totaled $2.4 billion in FY 2018. Not counting the Permanent Fund transfer, the department is forecasting unrestricted revenue of $2.8 billion for FY 2019 and $2.3 billion for FY 2020.
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Under SB 26, the percent of market value to be transferred from the Permanent Fund to the general fund is calculated to be $2.7 billion in FY 2019 and $2.9 billion in FY 2020.
Alaska North Slope oil prices are forecast to average $67.96 per barrel for FY 2019 and $64.00 for FY 2020. In recent weeks oil prices have trended downward with ANS oil prices closing below $60.00 per barrel in late November 2018. Currently, ANS price is trending in the mid to low-$60 range, in stark contrast to the multi-year high price of over $85.00 per barrel at the beginning of October 2018. This forecast accounts for these recent swings in price.
For FY 2018, North Slope oil production averaged 518,400 barrels per day, a decline of 1.5% compared to FY 2017. The department forecasts that new fields will help increase production to 526,800 barrels per day in FY 2019 and 533,200 barrels per day in FY 2020 before entering a period of declining production through FY 2024. Production is expected to remain around 500,000 barrels per day over the next decade, as new developments help offset most of the declines from existing fields.
The Revenue Sources Book is an annual publication that provides basic information about state revenue, as well as a forecast of state revenue over the next ten years. The Revenue Sources Book will be made available December 14, 2018 at 3:00pm on the Department’s website, at www.tax.alaska.gov.
