We’ve always been a fan of the charts Steve Rattner uses on MSNBC’s Morning Joe to explain national issues. For the past few months we have been using a similar approach at Alaskans for Sustainable Budgets to help explain our views on state issues. At Editor-in-Chief Jeff Landfield’s suggestion, this kicks off an effort to broaden the reach of that project with a “chart of the week” to be published Fridays in the Alaska Landmine.
This week we focus on what the Department of Revenue’s (DOR) Spring ‘21 Revenue Forecast looks like after substituting oil prices reflected in the current futures market strip for those used in the original forecast. There has been a huge change in oil prices since the DOR published the Spring Forecast back in March. For example, in March DOR projected the average FY22 oil price at $61/barrel. In her August presentation to the legislature’s Comprehensive Fiscal Plan Working Group, DOR Commissioner Lucinda Mahoney updated that to $72/barrel. After a continued surge, the futures market is now suggesting an average FY22 price in the range of $81/barrel.
Substituting those prices has a significant impact on the traditional revenues component of the state budget. In March, DOR projected traditional revenues for FY22 at $1.7 billion. Substituting current and projected price levels raises that to $2.4 billion, roughly 40% higher. If translated into a supplemental PFD, for example, the difference equals $1,125 per PFD
Advertisement. For information about purchasing ads, please click here.
But the analysis shows other things as well. While the current futures strip projects higher prices than included in DOR’s March forecast in the near term (the next 3 years), it projects significantly lower prices — with resulting lower traditional revenues — over the intermediate (years 4-6) and longer (years 7-9) term. Under the rule of “good for the goose, good for the gander,” if some want to use the futures strip to argue the state’s fiscal situation is less dire in the near term, they also should be prepared to admit the intermediate and longer term is more bleak than projected in the spring.
Brad Keithley is the Managing Director of Alaskans for Sustainable Budgets, a project focused on developing and advocating for economically robust and durable state fiscal policies. You can follow the work of the project on its website, at @AK4SB on Twitter, on its Facebook page or by subscribing to its weekly podcast on Substack.
"traditional" - Google News
October 23, 2021 at 03:47AM
https://ift.tt/3jtrkpS
Brad Keithley's chart of the week: Traditional revenues up... for now - Alaska Landmine
"traditional" - Google News
https://ift.tt/36u1SIt
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Brad Keithley's chart of the week: Traditional revenues up... for now - Alaska Landmine"
Post a Comment