How Should We Use Additional Oil Revenue?
March 10, 2022
Dear Neighbor,

If oil prices stay high for a sustained period of time, we will have unexpected revenue beyond what we need for a balanced budget. It has been more than a decade that we’ve had the opportunity to make generational investments, and I think we should think long term as we consider how to invest additional revenue. I hope you will participate in this process, both by prioritizing some of the options I’ve laid out below, and by writing and suggesting additional alternatives or making a more detailed case for what you think our top priorities should be.

Prioritize:

  • Establish a Child Care Trust Fund that provides long term additional investments in child care.

  • Pre-fund K-12 education for next year so school districts don’t have to issue pink slips to teachers.

  • Fund state match to capture federal Infrastructure Investment and Jobs Act (IIJA) dollars for Port of Alaska, Port of Nome, renewable energy, and other projects where Alaska will be competing for capital with other states.

  • Fund prioritized renewable energy and transmission projects to reduce consumer costs and transition to more renewable portfolio, both in Railbelt communities and rural Alaska.

  • Provide additional cash assistance beyond the dividend, such as an “energy relief check.”

  • Provide a per-district capital allocation to invest in local projects (could be parks, trails, shelters, or other capital projects identified by local elected officials and non-profits).

  • Make a significant payment into the corpus of the Permanent Fund, with goal of growing our trust fund and protecting ourselves from budgetary exposure that could result from lower oil prices or lower production in the future.

Prioritize your preferences HERE.

I’m extremely concerned that the upcoming election and Mike Dunleavy’s obsession with dividends risks squandering much of this windfall. These high oil prices are extremely unlikely to persist, since fracked oil production from the Permian basin is profitable north of $60 per barrel. So we must assume that oil prices will fall, and that the windfall we have today should be invested to provide the greatest benefit over the long term. We may not have another opportunity to make these kinds of long term investments for many years. Please be involved in helping us make wise choices.

If you’d like to talk in person, I’ll be hosting a constituent coffee at downtown New Sagaya on Sunday, March 20th at 8:30am. Hope to see you there!
Zack
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