Economy / Fiscal Policy

Olga Faizulina is a Fulbright visiting researcher and PhD student in economics from Yakutia, in Russia (see map). She is studying at ISER this year, analyzing how air transportation policy influences economic development and sustainability of small rural communities in Alaska. She first briefly describes the people, culture, and economy of Yakutia, and then discusses in more detail her previous research on the air transportation system in northern Russia.

Want to practice balancing the state budget in a variety of ways? Want to see how a particular strategy might play out? At lunchtime on Tuesday, September 29, we will set up the Balancing-Alaska's-Budget game in the ISER conference room so anyone can try balancing what the state spends and how to pay for it. Alaska Common Ground and ISER unveiled the game at a recent forum on Alaska's fiscal and economic future. It explains our current state budget crisis in a hands-on and understandable way, with a spinning wheel, scales, and blocks. There won't be any formal talk, but Cliff Groh, chair of Alaska Common Ground, and Bob Loeffler, visiting professor of public policy at ISER, will be there to help the players. Please join us.

When: Tuesday, September 29, 12 to 1
Where: 1901 Bragaw Street, third floor, ISER conference room

1901 Bragaw Street is about two blocks from the intersection of Northern Lights Boulevard and Bragaw Street. Parking will be limited, because an area of the parking lot is blocked off for construction. Do not park in the adjacent parking lot for East High School; the school district can have your car towed. Call 907-786-7710 if you have questions.

To help Alaskans better understand the big budget problems the state government faces, Alaska Common Ground and ISER hosted a public forum on September 19. The forum introduced a new budget-balancing game, and it included a group of Alaskans presenting their own budget proposals, other Alaskans discussing potential economic effects of reduced state spending, and a panel of policymakers talking about factors that will influence future budget decisions.

Forum handouts
Alaska’s Fiscal Situation in Four Graphs (PDF, 484KB)

Brad Keithley's “Sustainable Budget Proposal” (PDF, 140KB)
Gary Wilken's “Everyone Helps a Little: A Five-Year Fiscal Plan” (PDF, 132KB)
John Havelock's “The Hat Trick” (PDF, 114KB)
Liz Medicine Crow's “Progress Will Come by Investing in Our Own” (PDF, 129KB)

Watch forum videos courtesy of 360 North and Alaska Public Media.

To help Alaskans better understand the big budget problems the state government faces, the new Balancing-Alaska's-Budget Game will be introduced at a free public forum September 19 at UAA's Wendy Williamson Auditorium. The forum, Alaska's Fiscal and Economic Future, is presented by Alaska Common Ground and ISER and will examine fiscal and economic issues in a number of ways. A group of Alaskans will discuss and defend their own budget proposals, and audience members will have the chance to vote on those proposals. There will also be a debate between two Alaskans with different visions of Alaska's likely economic future, and a panel of policymakers will discuss factors influencing future decisions and how the public can have more of a  say in those decisions.

The game will provide a new way for Alaskans to think about budget issues. Using a spinning wheel, giant scales, and blocks, game players will try to balance what we spend with how we pay for it. Please join us at this interesting and innovative forum.

What: A free public forum, Alaska's Fiscal and Economic Future

Where: UAA's Wendy Williamson Auditorium

When: Saturday September 19, 9 to 4.

Download a program (PDF, 535KB). For more information, go to akcommonground.org.

ISER and Alaska Common Ground are sponsoring a free public forum on Alaska’s fiscal and economic future on September 19. But in advance of that forum, Gunnar Knapp, ISER’s director, and Cliff Groh, the chair of Alaska Common Ground, talked at ISER, previewing some of the material they plan to present. They encouraged those at the talk to ask questions and offer suggestions for improvement.

Download the handouts (PDF, 341KB) from this lunchtime talk.

You are invited to join other Alaskans at a free public forum on Saturday, September 19, from 9 to 4, at UAA's Wendy Williamson Auditorium, for a conversation about the scale of fiscal and economic challenges the state faces and our options for dealing with them. It is co-sponsored by ISER, Alaska Common Ground, the Anchorage Public Library, and the League of Women Voters of Anchorage. Alaska Common Ground is a nonprofit organization that brings people together to talk about public policy issues.

The forum will include speakers and panelists, but those in the audience will also have the opportunity to vote on how they think the state can best move toward a healthy fiscal and economic future. Later we'll post more detailed information.

Gunnar Knapp, ISER's director, was the opening speaker at Governor Walker's conference, "Building a Sustainable Future: Conversation with Alaskans," held June 5 to 7 at the University of Alaska Fairbanks. Two former ISER directors, Vic Fischer and Scott Goldsmith, also took part in the conference, which brought together Alaskans from around the state to discuss Alaska's fiscal future. The conference was held at a time when a sudden drop in oil prices has slashed state oil revenues and left the budget for the coming year several billion dollars in the red.

Oil revenues have largely funded state government for more than 30 years. Dr. Knapp's presentation to the conference, An Introduction to Alaska Fiscal Facts and Choices, summarizes the fundamental fiscal problem the state government faces over time: "Alaska oil production is falling and our population is rising. It is hard for falling oil production to support most of state government for a growing population."

The presentation goes on to describe the fiscal choices for Alaskans, unless oil prices rise dramatically and unexpectedly: adjust our spending or how we pay for it. The state government has several practical options—cut spending more, raise new revenues, or use earnings of the Permanent Fund. As Dr. Knapp points out, "None of these options are easy or popular."

Download the update presentation (PDF, 2.1MB) or watch a video recording.  If you have questions, get in touch with Gunnar Knapp at Gunnar.Knapp@uaa.alaska.edu. ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.

The state government's assets could generate enough earnings in fiscal year 2016 to pay the Permanent Fund dividend, boost the size of the Permanent Fund, and cut the expected General Fund deficit from $3.3 billion to just over $1 billion—which would still be a big fiscal challenge but much more manageable. That's the finding of a new analysis by Scott Goldsmith, professor emeritus of economics at ISER.

Those state assets consist of money in the Permanent Fund and other accounts as well as the value of state-owned petroleum still in the ground. Dr. Goldsmith estimates that after first paying the dividend and adding to the Permanent Fund, the state could put $2.2 billion in remaining earnings in the General Fund, which pays for public services. Right now the state uses only current petroleum revenues and smaller sources to cover General Fund spending—but those revenues are expected to fall $3.3 billion short of the estimated $5.5 billion in spending next year.

Read the analysis, The Path to a Fiscal Future: Use Earnings from All our Assets (PDF, 661.6KB). If you have questions, get in touch with Scott Goldsmith at osgoldsmith@alaska.edu or call 907-786-7720.

ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.

The fall in oil prices has led to growing concern among Alaskans about the state's fiscal situation. To help Alaskans better understand this critical issue, Gunnar Knapp, ISER's director and a professor of economics, has been making a presentation to organizations around Alaska.

Download the full presentation (pdf, 1.7MB) or a summary (pdf, 467.7KB), The Most Important Things to Understand About Alaska's Fiscal Situation, by Gunnar Knapp. The presentation will be updated over time. If you have questions, get in touch with Gunnar Knapp at 907-786-7717 or Gunnar.Knapp@uaa.alaska.edu.

ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.

Construction spending in Alaska will be an estimated $8.5 billion in 2015, down about 3% from spending in 2014. That's according to the 2015 construction spending forecast, by Scott Goldsmith and Pamela Cravez of ISER. That forecast is done annually for the Construction Industry Progress Fund and the Associated General Contractors of Alaska, with funding from Northrim Bank. The authors find:

• Overall construction spending will remain strong in 2015, despite the recent steep drop in oil prices. That's partly because there is still a backlog of projects funded under large state capital budgets in earlier years.

• Forecasting how much oil companies will spend for capital projects in Alaska is especially difficult this year. The companies had earlier announced plans to increase spending 18%. But the low oil price will likely force some cutbacks, so spending is forecast to stay about the same as last year.

• Private spending for commercial and residential construction is likely to be down in 2015, in the face of slowing job and population growth and uncertainty about oil prices.

Download Alaska's 2015 Construction Spending Forecast (pdf, 1.8MB), by Scott Goldsmith and Pamela Cravez. If you have questions, get in touch with Scott Goldsmith at osgoldsmith@uaa.alaska.edu.

A presentation given by Mouhcine Guettabi and John MacKinnon in Anchorage on January 29, 2015 and Fairbanks on January 30, 2015 is also available for download (PDF, 1.8MB).

ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.