Save the money
If North Slope crude oil prices now hovering near $80 per barrel remain at that level, or even increase, Alaska could be within striking distance of closing its chronic budget gap, perhaps by next year.
The added revenue, along with the Legislature’s decision to use Permanent Fund earnings to help pay for government at the expense of dividend checks, puts the state closer to bridging the gap.
We are left to wonder whether the Legislature, as the fiscal pressure is alleviated, will get the state’s spending under control or whether it will continue to spend as if there is no tomorrow while telling Alaskans the government cannot be cut further.
We correctly predicted the Legislature would do nothing of note about Alaska’s fiscal crisis until the state’s reserves were almost gone. Here is another prediction. With more money to spend, the Legislature will simply spend more money, again growing government.
With oil prices rebounding, and more money for lawmakers to spend, it only will be a matter of time before Alaska is back in a fiscal mess.
Instead of spending a penny more than it has to, the Legislature should use any new revenues to begin rebuilding the state’s reserves.
If oil prices go up, they most certainly will go down. It would be nice to again have a cushion.