The Current Fiscal Year Of A Multi Billion Dollar Budget Deficit

1185 Words Nov 18th, 2016 5 Pages
Summary The current fiscal year will see a $3.4 billion deficit in the state budget between spending and revenue (Walker, 2015, p. 1). Despite having reduced spending by 35% since 2013, only 40 percent of the state’s budget will be covered by unrestricted general fund revenue (Walker, 2015, p. 1). This increased budget gap is partially attributed to the state’s reliance on the oil industry, which has seen declines in oil prices and production (Davis, 2016a). Subsequent analysis of the oil industry predicts that neither oil prices nor British Petroleum’s North Slope production are excepted to increase sufficiently enough to balance the budget (Walker, 2015, p. 1). Without this steady revenue, state policymakers are struggling to address a multi-billion-dollar budget deficit (Davis, 2016b).
Background
Already there have been attempts to lessen the deficit in the budget. Governor Bill Walker elected to reduce the state’s Permanent Fund to $1,000 per year for most citizens (ITEP, 2016). In addition, Governor Walker has also called for massive cuts in state’s spending (Davis, 2016c). These included cuts in education, a pausing of highway projects, and the completely halting of megaprojects such as the Knik Arm bridge and Susitna River dam (DeMarban & Rosen, 2016). Governor Walker also vetoed funding for oil-tax credits and tax breaks for the oil industry (DeMarban & Rosen, 2016). However, it is apparent that budget cuts, reduced spending and the reduction of the state issued…

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