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Senator Sean Parnell Portrait of Representative Eldon Mulder

Senator Sean Parnell
State Capitol, Room 518
Juneau, AK 99801-1182
Phone: (907) 465-2995
Fax: (907) 465-6592
Send E-Mail

Representative Eldon Mulder
State Capitol, Room 507
Juneau, AK 99801-1182
Phone: (907) 465-2647
Fax: (907) 465-3518
Send E-Mail

Forecast Affirms Need for Balanced Budget Plan

For Immediate Release: March 23, 1999
Contact: Senator Sean Parnell at (907) 465-2995 or
Representative Eldon Mulder at (907) 465-2647

Juneau -- After hearing from national energy experts Tuesday, state lawmakers agreed that Alaska can no longer depend on oil revenues to fund the lion's share of the State's budget. Lawmakers also agreed that any long-range plan must be based on realistic oil price and production assumptions.

"The House, Senate, and Administration must be on the same page in terms of assumptions as we build a balanced budget plan that works for today and years to come," said Senate Finance Committee Co-Chair Senator Sean Parnell (R-Anchorage). "We must agree on the rate of inflation, the price of oil, and the level of oil production-and after today's presentation, we all agree that we cannot build a fiscal plan that depends heavily on oil revenues."

Peter Bogin, from Cambridge Energy Research Associates, and Douglas M. MacIntyre from the U.S. Department of Energy are nationally recognized energy experts who both told a joint meeting of the House and Senate Finance Committees that the days of easy oil money are gone.

Bogin told lawmakers that the price of oil per barrel over the next year will average $13.50, which is up from all time lows this year when prices dipped below $10 per barrel. The average price in the following year is forecast to average around $14 per barrel.

"Higher prices and lower production mean it's a case of 'good news, bad news,'" said Representative Eldon Mulder (R-Anchorage), Co-Chair of the House Finance Committee. "While oil prices seem to have hit rock bottom and are now on the upswing, it appears we are not going to see huge spikes in the price of oil in the coming years. That means we have to base our economic model on very conservative estimates of what we'll be receiving from oil and gas."

Senator John Torgerson (R-Kasilof), Co-Chair of the Senate Finance Committee, said the Governor's long-range proposal is based on an average per barrel oil price of $17-20, which is higher than what both experts project. "Given what the experts told us, I think we should base our oil revenue assumptions on $13-14 per barrel when we craft our long-term budget plan," Torgerson said.

"Even though there has been a slight increase in the price of oil, long-term declining production means oil prices would have to skyrocket before oil alone would save us," said Representative Gene Therriault (R-Fairbanks/North Pole), Co-Chair of the House Finance Committee. "We have a long-term economic problem, which means we're going to have to figure out how we survive over the next ten to fifteen years."

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Broadcasters note: Audio comments are available on the Majority Actuality line, 1-800-478-6540
= Sean Parnell, 23 K = Eldon Mulder, 77 K
= John Torgerson, 66 K = Gene Therriault, 31 K
= Joe Green, 116 K = Gail Phillips, 109 K

| Top | Representative Mulder's Home Page | Senator Parnell's Home Page |
| Senator Torgerson's Home Page | Representative Therriault's Home Page |
| Representative Green's Home Page | Representative Phillips' Home Page |