Total Budget: -$1,254 million dollars

That's $2,000 per Alaskan

Revenue: Corporate Income Taxes

Alaska taxes corporate income at graduated rates ranging from 0% to 9.4% divided over ten tax brackets. There are 18,000 non-oil and gas businesses that are paying about $75 million in Corporate Income Taxes (CIT) this year.

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Revenue: Mining Taxes

The Alaska Mining License Tax (AMLT) is assessed on any mining operation with a net income exceeding $40,000. The six large mines in Alaska pay the majority of the AMLT (about $40 million this year) as well as rents, leases, royalties, corporate income tax, motor fuel tax, local property tax, etc.

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Revenue: Commercial Fisheries Taxes

Commercial fisheries pay about $172 million in combined taxes, fees and self-assessments to manage fisheries. This includes local fish taxes assessed by local communities, as well as State fish taxes that the legislature directs to be shared with local governments. The value of fish taxes collected is tied to the value of fish, which means state revenue goes up and down with fish volume and global markets.

Of the amounts collected, about $60 million is “unrestricted general funds.” Of this, the State keeps $20 million to help manage the fisheries; $24 million goes to local governments; and $16 million goes toward specific projects and marketing. The Fisheries Business Tax is the largest revenue generator (FY 21 forecast of $35 million). The State could keep new revenue from any future increase, instead of sharing with local communities.

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Revenue: Oil & Gas Taxes

Oil and gas producers in Alaska pay a production tax, conservation surcharges, and royalties on each barrel of oil. They also pay a corporate income tax as well as a property tax that is shared with local governments where oil and gas infrastructure is located ($446 million was paid last year to local governments). The state constitution requires that at least 25% of all oil and gas royalties go into the Permanent Fund; the remainder goes to the state’s general fund. Last year, when oil prices averaged $69/barrel, all revenues totaled $2.4 billion; this year with an expected price of $37/barrel, $936 million is expected, of which $207 million is going to the Permanent Fund.

The value of production tax collected is tied to the price of oil, which means state revenue goes up and down along with the world price of oil. Last year the state collected $587 million from oil and gas production taxes, but this year it has dropped to $114 million primarily due to low oil prices caused by decreased demand/oversupply in the world market.

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Revenue: Excise Taxes

Alaskans pay $124 million in excise taxes (aka “sin” taxes“ on tobacco, alcohol, marijuana). Of this amount about half of the revenue goes to the state’s general fund; the rest is designated by law to particular programs. Any new increase could have all new revenue go to the general fund.

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Revenue: Fuel Taxes

The state’s fuel taxes will raise $43 million this year. The highway fuel tax is $0.08 per gallon; marine is $0.05/gallon; and aviation gasoline is $0.047/gallon. Airport fuel revenue goes to fund airports; marine fuel tax revenue helps fund harbors; and highway taxes go to the Department of Transportation. Alaska has the lowest motor fuel taxes in the United States.

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Revenue: Permanent Fund Earnings

The Alaska Permanent Fund has grown to a value of $66 billion. A 2018 law prescribes how much of the Fund's earnings can be made available annually to help pay for state services and dividends. This law limits the annual amount to about 5% of its earnings, which is the amount financial experts said balances protection of the Fund’s future earning power with helping meet the state’s revenue needs. This year the payout was $2.7 billion; next fiscal year it will be $3 billion. Based on these commitments, the earnings reserve account will have an estimated balance remaining of $5.3 billion. Every $1 billion in earnings spent, means $50 million less will be available each year going forward to help pay for services and dividends.

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Revenue: Income Tax

Alaska repealed its income tax starting in 1979 when revenue from oil started flowing (at that time it had a progressive tax with brackets from 3 to 14.5%). Currently Alaska is one of seven states without an income tax.

A flat tax is a fixed rate in which everyone pays a percentage of their wage or net earnings (if self-employed). Nine states have a flat tax that ranges from 5.25% in North Carolina to 3.07% in Pennsylvania; the average is 4.49%. Because everyone pays the same percentage, this tax is viewed as regressive because it takes a larger percentage of a low wage earner’s income compared to high earners.

A progressive tax is based on the taxpayer's ability to pay. It imposes a lower tax rate on low-income earners than on those with a higher income by creating tax brackets based on income ranges; some states tie the rate to that of a taxpayer’s Federal income tax liability.

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Revenue: Sales Tax

Some consider a sales tax a more transparent way for government to collect tax revenue because consumers anticipate and see taxes paid as they purchase goods and services. If the tax applies to all purchases (no exemptions), it is viewed as “regressive” since low income families pay a greater percentage of their income. A total of 45 states have a sales tax in place, with rates from 2.9-7.25%. While Alaska currently has no state sales tax, most local communities do, except for Anchorage and Fairbanks.

The revenue estimates below are for a broad sales tax on the purchase price of sales of goods and services to consumers and businesses with no exemptions.

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Revenue: Lottery

There's several ways the State can generate revenue from this form of gambling. A lottery that offers a drawing only (such as Lotto and Powerball) is estimated to generate about $5 to $8 million in revenue. A lottery with both a drawing and instant games (scratch-off) is estimated to generate about $35 million; a lottery with drawing, instant games, as well as video lottery terminals (video gambling), is estimated to generate about $135 million.

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Spending: K-12 Funding

The budget's largest program is K-12 funding; this year the state is spending $1.3 billion to fund Alaska’s schools. The state uses a formula to divide up funds among school districts. It starts with a “Base Student Allocation” (BSA), which was $5,930 per student last school year. More funding then is added based on a number of factors. A national study put Alaska at third in the nation for K-12 spending per student at $22,304, which includes local funds.

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Spending: Early Learning

The State is spending $2 million for pre-K/early learning programs. Studies have shown that early education before kids enter kindergarten can improve school readiness. Some Alaska school districts currently offer programs, which are reaching about 10% of Alaska’s 4 year-olds.

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Spending: University of Alaska

UA has 15 campuses and training centers around the state that offer a variety of programs from vocational training to doctorates. UA's budget has been cut about $50 million over the last two years (it currently is $277 million in state funds) and is slated for another $20 million cut next year. Student tuition has been annually increasing 5% in recent years.

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Spending: Medicaid

The State’s cost for the Medicaid program is $636 million. In 2015 the State expanded who was eligible for Medicaid health insurance; enrollment this year is expected to be 58,600. The current cost per enrollee is about $325.00 in state funds plus the state gets another $7,935 in Federal funds.

While the Federal government mandates certain services be covered under Medicaid, it also has other services considered "optional," which range from dental services, at-home personal care services, to prescription drugs. In some instances, these optional services are less expensive than what would otherwise be a mandatory alternative (i.e. at home compared to a nursing home). Over 90,000 Alaskans have been able to access optional services.

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Spending: Senior Benefit Payments

This program provides a monthly stipend (from $76 to $550) to about 13,500 seniors that meet Federal poverty guidelines. Individuals earning up to $27,913 per year ($37,713 for couples) qualify. This program morphed from the Longevity Bonus (seniors in Alaska at the time of Statehood) and SeniorCare (seniors with low-incomes and limited assets).

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Spending: Alaska Pioneer Homes

The Alaska Pioneer Home system is six licensed assisted living homes providing care to 440 Alaskans in Anchorage, Fairbanks, Juneau, Ketchikan, Sitka, and Palmer (Veterans and Pioneer Home). The first Pioneer Home opened in 1913 for indigent men. In 1915, an age requirement of 65 years was instituted. Monthly rent ranges from $2,967 to $15,000 for which the state pays a monthly subsidy based on income (51% of residents privately cover their cost).

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Spending: Mental Health & Substance Misuse

The Behavioral Health Division provides services that range from prevention and screening to brief intervention and acute psychiatric care at API. The State awards $11 million to organizations to provide mental health and substance misuse services.

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Spending: Children's Services

The State spends $54 million for social workers responsible for child protective services and $40 million for foster care and subsidized adoptions. Foster care subsidies are paid to families to assist with the care of children placed with them; rates are augmented for a child with special needs.

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Spending: Permanent Fund Dividend

Since the early 1980’s, the state has paid citizens a dividend based on a formula tied to the Fund’s earnings. To save more of the earnings, in recent years the state has not used the traditional formula to calculate the dividend amount, which resulted in smaller dividends.

In 2018 a new formula was approved that says 5% of the Fund’s earnings goes to the state’s general fund to help pay for state services as well as the dividend (prior to this, earnings had only been used for dividends). In practice, the individual dividend amount no longer is based on a prescribed formula; instead, legislators decide each year how much can be spent for dividends, just as it does in funding other programs. The total cost for this year’s dividend was $680 million, which is about one-third what it otherwise would have been if the traditional formula had been followed.

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Spending: Corrections

Corrections’ budget is $339 million; it operates 12 correctional centers, halfway houses, and probation/parole services. With increasing pressure to take action against growing crime, Alaska’s prisons currently are at around 90% capacity. Last year Alaska’s cost per prisoner was about $169/day; Outside private facility costs were 42% less ($98/day). The department also provides pre-trial court-order supervision for 1180 Alaskans.

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Spending: Public Safety

About 88% of the Department of Public Safety's $180 million budget is for the Alaska State Troopers ($147 million) and Village Public Safety Officers ($11 million). The department also operates the Crime Lab ($6 million) and provides $22 million for the Council on Domestic Violence and Sexual Assault. Alaska has one of the nation’s highest rates for domestic violence. The Council awards grants for emergency shelter, victim assistance, and battery intervention programs.

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Spending: Prosecutors & Public Defenders

The Law Department's Criminal Division prosecutes violations of state criminal law committed by adults and a large portion of the serious crimes committed by juveniles. Its budget is $31 million. The Public Defender (PD) Agency and Office of Public Advocacy (OPA) provide court-directed legal advocacy and guardian services to vulnerable Alaskans and constitutionally mandated legal representation to indigent clients; its budget is $55 million. As crime increases and more arrests made, their workloads increase.

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Spending: Court System

The Court System’s $111 million budget includes operation of the state’s appellate, trial, and therapeutic courts. Offices and courtrooms are located in 40 communities throughout the State. With increased attention on crime, the Court system’s number of cases also increases.

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Spending: Fish & Game

Out of the Department’s $51 million budget, the largest share ($31 million) goes to manage commercial fisheries. While fisheries-related taxes bring in $45 million in revenue, more than half of that revenue is redistributed to local governments. If the State retained these revenues, it would fully cover management costs. Other department programs are almost fully self-supporting through license and permit fees.

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Spending: Natural Resource Management

The Department of Natural Resources manages all state-owned land, water, and natural resources (except for fish and game). This year about 47% ($31 million) of its $66 million budget is for fire preparedness and fighting. It primarily covers the "fixed costs" for staffing and contracts for fire fighting equipment just in case there are fires. Each year the actual cost to fight fires is funded after the fact. In FY 19, the total state cost for fire suppression was $124 million.

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Spending: Transportation

The Department of Transportation and Public Facilities (DOT/PF) has responsibility for state roads, airports, state-owned buildings, and the ferry system. About 43% of its $150 million budget funds operation and maintenance of airports and highways, and 36% goes to operate the Alaska Marine Highway System.

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Spending: Governor's Office

The Governor’s office budget of $24 million includes funding for the Human Rights Commission ($2.2 million); Office of Management and Budget ($2.4 million); Lt. Governor’s office ($1.1 million) and Elections ($5.5 million); and operation of the Governor’s office itself ($11.4 million), which includes rent and staff for regional offices.

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Spending: Legislature

The Legislature's overall budget is $67 million; 44% of it supports operation of the Legislature while in session. Budget and Audit Committee has a $14.4 million budget primarily for Legislative Audit and the Legislative Finance Division. Another $24 million pays for support services, which includes Legal and Research Services ($4.6 million); Ombudsman ($1.3 million); and administrative support ($12.4 million) such as the Legislative Information Offices (LIOs).

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