FALL 2011 - Alaska Department of Revenue - Tax Division

118 Pages·2011·4.42 MB·English

Revenue Sources Book
Alaska Department of Revenue – Tax Division
FALL 2011
Revenue Sources Book
Alaska Department of Revenue – Tax Division
FALL 2011
Tax Division Contact Persons Contact Persons for Specific Topics
Matthew R. Fonder, Director Alaska Permanent Fund
907-269-6620 Julie Hamilton, Chief Financial Officer
[email protected] Alaska Permanent Fund Corporation
907-796-1535
Johanna Bales, Deputy Director
[email protected]
907-269-6628
[email protected] Constitutional Budget Reserve Fund
Angela Rodell, Deputy Commissioner
Cody Rice, Petroleum Economic Policy Analyst
Alaska Department of Revenue, Treasury Division
Revenue Sources Book Publisher
907-465-3669
907-269-1024
[email protected]
[email protected]
Restricted Revenue
Cherie Nienhuis, Commercial Analyst
John Boucher, Senior Analyst
907-269-1019
Office of the Governor, Management and Budget
[email protected]
907-465-4677
[email protected]
Cover Photo Credit: © Alaska Division of Community and Business Development

In Memoriam
Senator Ted Stevens
In Memoriam
Senator Ted Stevens
The Fall 2011 Revenue Sources Book is dedicated to Theodore Fulton Stevens, U.S. Senator for Alaska for forty years, who died
August 10, 2010 at the age of 86.
Ted Stevens was a founding father of Alaska as an attorney arguing for statehood at the Department of Interior in 1958. Returning
to Alaska to practice law in 1961, Ted was later appointed to the U.S. Senate by Governor Walter Hickel, upon the death of Sena-
tor E. L. Bartlett, on Christmas Eve, 1968.
Throughout his 40 year career in the U.S. Senate, he became the longest serving Republican Senator, was voted “Alaskan of the Cen-
tury,” and was appointed President Pro Tempore. Through his position on the Appropriations Committee, Senator Stevens was able
to advance our very young state by acquiring the hundreds of millions of federal dollars necessary to build the infrastructure we now
enjoy. This money resulted in projects that employed thousands of Alaskans, matching funds for construction projects statewide for
state and local governments and was an amazing economic driver for local businesses.
Virtually every federal project throughout Alaska has Stevens’ name on it from the International Airport in Anchorage to the Trans
Alaska Pipeline that runs from Prudhoe to Valdez, the oil from which provides royalty payments and dividends to Alaskan residents.
We wish to express our sincere gratitude to the late Senator, in the words of his family “He was a guiding light through statehood
and the development of the 49th State. Now that light is gone but the warmth and radiance of his life and his work will shine in
the last frontier. His legacy is the 49th star in the American flag.”
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Revenue Sources Book
Alaska Department of Revenue – Tax Division
FALL 2011
ii · Fall 2011 Revenue Sources Book
Revenue Sources Book
Alaska Department of Revenue – Tax Division
FALL 2011

1. Introduction ..................................................................................1
2. Executive Summary ......................................................................3
3. Rare Earth Elements ...................................................................17
A brief overview of Rare Earth Elements.
4. Oil Revenue .................................................................................25
In FY 2012, oil revenues are projected to contribute 92% of the state’s Unre-
stricted General Fund Revenue. Oil revenues will continue to play a key role in
Alaska’s future.
5. Other Revenue (except Federal & Investment) ..........................45
Revenue from non-oil sources includes non-oil taxes, charges for services, fines and
forfeitures, licenses and permits, rents and royalties and other revenue sources.
6. Federal Revenue ..........................................................................59
Federal funding accounted for $2.4 billion of the state’s total revenue in FY
2011.
7. Investment Revenue ....................................................................63
Investment earnings come from the Alaska Permanent Fund, Constitutional
Budget Reserve Fund, General Fund and other state investments.
8. State Endowment Funds .............................................................71
Alaska has six endowment funds including the Alaska Permanent Fund, Mental
Health Trust, Public School Trust, Alaska Children’s Trust, Power Cost Equaliza-
tion Endowment and the University of Alaska Endowment.
9. Public Corporations & University of Alaska .............................75
Seven public corporations and the University of Alaska are treated as separate
component units of state government for financial reporting purposes.
10. Appendices ..................................................................................83
The appendices provide 10 years of historical data and 10 years of forecast data
on oil revenue, prices and production.
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1. Introduction
General Discussion
The purpose of the Revenue Sources by about 70% over that period, the as taxes, charges for services, licenses,
Book is to provide the governor, legisla- market price of oil has increased over permits, fines and forfeitures. The
ture and citizens of the state a summary 500%. For FY 2012, we project ANS information provided in this book will
of our past collections of state revenue oil production will decrease to an aver- provide greater insight not only into
and a forecast of future revenue. Rev- age of 0.574 million barrels per day. the sources of revenue that support the
enues are categorized into four major state today, but also into future revenue
The Constitutional Budget Reserve
components: oil revenue, income from from potential new sources.
Fund (CBRF), created in 1990,
sources other than oil, federal revenue
has served the state well as a budget Please note that the totals in some
and investment revenue.
stabilization fund in years of low oil tables throughout this publication may
Oil revenue continues to be the most revenue. High oil prices in recent years not equal the sum of components due
significant source of revenue to the combined with a higher production tax to rounding. Fiscal year 2011 totals
state, and it is projected to provide rate on oil have masked the impacts should be considered preliminary and
more than 88% of General Purpose of declining oil production. Lower oil will be updated in the spring of 2012.
Unrestricted Revenue through FY prices combined with declining North
2021. However, production of oil and Slope crude oil volumes could lead to
natural gas liquids on the North Slope future budget shortfalls and draws on
is declining. In FY 2011, Alaska North the CBRF.
Slope (ANS) output averaged 0.603
Alaska’s total revenue picture also
million barrels per day compared to a
includes earnings from investments
peak of 2.01 million barrels per day in
in the Permanent Fund and CBRF,
FY 1988. While production declined
federal revenue, and other sources, such
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