A crash in Alaska North Slope crude prices that echoes a worldwide drop in the price of oil has raised the possibility of multibillion-dollar deficits in a state where 88 cents of every dollar spent by state government comes from oil production.
Alaska crude hit a four-year low of $59.30 a barrel Monday, a collapse that threatens jobs, public services and some of the ambitious infrastructure projects needed to harness and navigate the state’s vast natural landscape.
State officials are now projecting a more than $3 billion shortfall in funding the state’s original spending plans. Across the U.S., oil-producing states are feeling the pinch. Louisiana is mulling cuts in youth programs and road maintenance to fill a $180-million funding gap. New Mexico recently cut its projected revenue growth in half. North Dakota is counting on a rebound in oil prices, higher taxes and increased production to help balance its budget.
None are facing a situation quite so precarious as Alaska’s, because no other state relies so heavily on oil production.
image credit Elffie LaChance
