The document outlines the top 5 budget priorities for Alaska's 2016 fiscal year budget: 1) Achieve a sustainable $4.5 billion budget by 2018 through a 3 year plan of spending reductions; 2) Reduce unrestricted general fund spending for 2017 from $5.4 billion to $4.9 billion; 3) Enact measures to keep the Alaska LNG project on track which requires $750 million; 4) Treat annual permanent fund earnings not used for dividends or inflation proofing as revenue; 5) Fill any remaining budget gaps using earnings reserves or the constitutional budget reserve. It also provides details on reducing oil tax credits, operating budgets, and using permanent fund earnings to balance the budget.

1. Top 5 #AKBudget Priorities
for 2016 (FY 2017) Session
Prepared for the Alaska Republic Assembly
September 15, 2015

2. Top 5 …
• Remain focused on achieving a $4.5 billion
sustainable budget by FY 2018 (“3 year plan”)
• Achieve additional UGF spending reduction for FY
2017 from $5.4 billion to $4.9 billion
• Enact measures required to keep #AKLNG on track
($750 million of $4.5 billion sustainable budget)
• Treat annual PF earnings remaining after PFD and
inflation proofing as revenue
• Fill remaining gap from either PF earnings reserve
or CBR
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3. Key steps …
• FY 2017 Operating Budget
• Achieve $300 million FY 2017 reduction in refundable oil & gas tax
credits (from $700 MM to $400 MM) projected in Fall 2014
Revenue Sources Book
• Reduce remaining operating budget by $200 million (4.2%)
• Ensure that any capital spending above $150 million (including for
#AKLNG) is offset by equal reductions from operating budget
• Prepare for FY 2018: Identify an additional $500 million spending
cuts to be implemented in FY 2018 ($150 million from refundable
oil & gas tax credits)
• FY 2017 Revenues
• Use annual realized PF earnings remaining after PFD & inflation
proofing as revenue ($318 million)
• Balance remaining budget shortfall (~ $1.7 billion, based on Spring
2015 Forecast) from either/both accumulated PF earnings reserve,
after PFD ($6.5 billion) or CBR ($7.7 billion)
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