Oily Politics - Breaking the Bank in Alaska

I don't think that anyone with a shred of integrity is at all surprised by the recent budget fiasco Alaska's republicans have brought about.

Let's start with Gov Parnell's oil tax giveaway spearheaded by our own state senator, Peter Micciche. According to the latest report by the Department of Revenue, the state will see a 38% decline of oil production for at least the next 10 years. So much for the oil tax giveaway spurring production.  And then the lower tax rate that the major oil companies were given have led to a near $2 Billion reduction in revenues just this year alone. Sure, the price of oil dipped a little, but not nearly to the extent to cause such a massive revenue hit. Read more here and here. Parnell got a little tripped up at a press conference last week when someone asked him to explain his statement that the new tax bill would bring about the same as ACES when oil is at the price it is now, over a hundred a barrel. The Department of Revenue said that the price would have to fall below $80. Parnell said someone showed him the figures, but he couldn't explain the math. Right.

Then there's the budget. The latest one for 2014 is operating at $3 Billion deficit. For 2013, Parnell had promised a $3.7 surplus. Wrong. Right now it's almost $400 Million in the red and all the bills are not in. How to make up for the difference? Well, tap the savings, of course. Gee, pretty much everyone who was opposed to the oil tax give-away figured out that busting the bank was what the Parnell's, Chenault's and Micciche's wanted to do. Lo, and behold. How long will it be before the PFD is tapped and a state tax is re-instated?

Still in the budget is seed money for some of Parnell's pet projects - $36 million for roads to the resources (the tab for these projects to proceed will be in the billions) and $10 million for the Susitina Dam (and that will be another billion+ dollar project if that goes through).

Cutting the University of Alaska system will be a priority. Can't be having educated people hanging around the state.

On the positive side, Parnell did say he wanted to begin paying down the state unfunded retirement obligation. But that too will come from savings.