Alaska revenue forecast: permanent fund remains core source as oil revenues fall short of spring outlook

Juneau — On Jan. 24 the Senate Finance Committee heard the Department of Revenuepresent its fall 2024 revenue forecast, which lowers near-term oil revenue projections and shows the Permanent Fund transfer continuing to supply the largest share of unrestricted general fund revenue.

Dan Stickel, chief economist for the Department of Revenue, told the committee the fall forecast projects $16.8 billion in total state revenue for fiscal 2025 and $15.7 billion for fiscal 2026, with federal receipts, investment earnings and petroleum revenue accounting for the bulk of receipts. "Each dollar change of oil price equates to about $35,000,000 of unrestricted general fund revenue," Stickel said when summarizing sensitivity to price movements.

The nut graf: the forecast reduces the oil-price assumption and production outlook from the spring forecast, shifting several hundred million dollars from the unrestricted general fund in the near term and increasing attention among committee members on liquidity of the Permanent Fund and the Constitutional Budget Reserve (CBR). That matters because state spending decisions this year will rely heavily on these estimates.

Most important details

- Oil and production assumptions: The Department used an Alaska North Slope oil price of $73.86 per barrel for fiscal 2025 and $70 per barrel for fiscal 2026, down roughly $4 per barrel from the spring forecast. The department reported a near-term production reduction to about 467,000 barrels per day in fiscal…