Behind Alaska’s Big Fight Over Oil Money
For decades, the state paid its bills through a natural-resource windfall. Now the money’s running out.
No longer a firehose of free money.
Photographer: stanley45/E+The state of Alaska is in the middle of a big budget fight. In late June, the state’s new Republican governor used a line-item veto to slice more than $400 million in spending out of the $8.7 billion state operating budget. By far the biggest cuts fell on the three-campus University of Alaska system, which would lose 41% of its state funding. Last week the majority-Republican state legislature passed a bill to restore most of this money. The governor has signaled that he’ll veto that legislation, too, and nobody seems to know exactly what will happen after that. Meanwhile, critics of the governor have launched a recall campaign.
Many of the details here (such as the fact that the Alaska House of Representatives, while mostly Republican, is led by a majority coalition composed mostly of Democrats) involve quirks of Alaska politics that I’m not really the guy to explain. But the clearest reason why the state is having these budget troubles — and it’s been having them for a while — is that its revenue from oil and gas taxes and royalties fell by 50% in 2015, and has recovered only slightly since: