Because of the falling oil price, Alaska now has a $3.5 billion hole in its $6.1 billion budget, and Gov. Bill Walker has called on state agencies to reduce budgets by 5% to 8% for the coming fiscal year. The state expects to dip heavily into its $14 billion in reserves to bridge the gap, but officials acknowledge that is not a sustainable solution, reports WSJ.
North Dakota's Gov. Jack Dalrymple said that some water projects could be imperiled if oil prices remained below $55 a barrel for five months, which would trigger a state rule that reduces a key oil-severance tax to zero for most production.
“You see people walking around the Capitol looking at their smart phones every couple of hours just keeping track of WTI,” said Dalrymple, referring to West Texas Intermediate, the U.S. benchmark price for oil, says WSJ.
U.S. oil fell $2.29, or 4.7%, to settle at $46.07 a barrel on the New York Mercantile Exchangeon Monday, the lowest level since April 2009. The U.S. benchmark has fallen 14% since the start of the year..
Alaska has been wasting money for years now. There should be no reason the State should be in dire straights, except that the State has been growing and growing, spending money like the fools they are. Alaska used to survive quite well at $8 oil.
ReplyDeleteQuit spending all that stolen loot.