Alaska state budget

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Alaska state budget

Flag of Alaska.png
Budget calendar:  Annual
Fiscal year:  2014
State Credit Rating:  AAA (as of May 2012)
Current Governor:  Sean Parnell
Financial figures
GF expenses[1]:  $7.3 billion (estimated for FY 2013)
All funds expenses:  $12.1 billion (estimated for FY 2013)
Spending % Change:  Green Arrow Up Darker.svg2.99%[2]
% from Federal Funding:  19.97%
State Debt:  $29,780,396,000
Per Capita State Debt:  $40,714
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This page contains information about budget processes and policy issues in Alaska, including:
  • A summary of the budget drafting process
  • Trends in revenues and expenditures
  • Current fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Alaska's total expenditures decreased by approximately $0.44 billion, from $12.58 billion in 2009 to $12.14 billion in 2013. This represents a 3.5 percent decrease.

Budget process

The state operates on an annual budget cycle, with the fiscal year beginning July 1 and ending June 30. The sequence of key events in the budget process is as follows:[3][4]

  1. Budget instructions are sent to state agencies in July.
  2. Agencies submit their budget requests to the governor in October.
  3. Agency budget hearings are held from September through November.
  4. The governor submits his or her proposed budget to the state legislature by December 15.
  5. The legislature adopts a budget by a simple majority in April.

The governor is required by statute to submit a balanced budget. Likewise, the legislature is required by statute to pass a balanced budget.[4]

In Alaska, the governor has line-item veto and item veto of appropriations authority.[4][5]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[6]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
  • Federal funds: "Funds received directly from the federal government."
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[6] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[6]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Alaska $7,301 $2,902 $1,389 $550 $12,142 $16,516.76
Oregon $5,960 $7,452 $12,262 $132 $25,806 $6,566.30
Washington $15,633 $7,744 $7,809 $2,016 $33,202 $4,762.60
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[7]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Alaska can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[6]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
Alaska 13.4% 9.3% 1.1% 11.6% 3.0% 16.8% 44.8%
Oregon 14.0% 2.5% 0.7% 18.2% 3.9% 6.7% 54.1%
Washington 22.9% 17.8% 1.0% 12.1% 2.7% 8.4% 35.1%
Source: National Association of State Budget Officers

Expenditure trends

Between 2008 and 2012, transportation expenditures increased by nearly five percentage points, or 38.8 percent, as a share of the budget. Similarly, elementary and secondary education expenditures rose by 2.6 percentage points, or 24.1 percent, as a share of the budget. Spending categorized as "other" fell by nearly 14 percentage points, or 23.4 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012.[6][8][9][10][11] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
2012 13.4% 9.3% 1.1% 11.6% 3.0% 16.8% 44.8%
2011 11.0% 8.3% 0.9% 9.3% 2.5% 11.9% 56.2%
2010 14.6% 8.6% 1.2% 12.0% 3.2% 17.0% 43.4%
2009 10.0% 7.5% 0.9% 7.5% 2.3% 14.9% 57.0%
2008 10.8% 7.0% 0.9% 8.4% 2.4% 12.1% 58.5%
Change in % 2.6% 2.3% 0.2% 3.2% 0.6% 4.7% -13.7%
Source: National Association of State Budget Officers

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[6] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[6]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Alaska $0 $0 $605 $8 $6,863 $7,476 $10,169.60
Oregon $0 $6,300 $500 $0 $496 $7,296 $1,856.46
Washington $7,656 $0 $0 $0 $8,116 $15,772 $2,262.38
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[7]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[6][8] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Alaska ($ in millions)[6][8]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $0 $0 $605 $8 $6,863 $7,476 $10,169.60
2012 $0 $0 $667 $8 $8,810 $9,485 $12,987.69
2011 $0 $0 $700 $8 $6,965 $7,673 $10,607.22
2010 $0 $0 $528 $3 $4,799 $5,330 $7,466.37
2009 $0 $0 $613 $3 $4,968 $5,584 $7,994.58
Change in % 0% 0% -1.31% 166.67% 38.14% 33.88% 27.21%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[7][12]
Source: National Association of State Budget Officers

State budgets by year

Fiscal year 2014

Alaska state budget -- 2014
Alaska State Legislature
Text:HB 65
Legislative History
Introduced:January 16, 2013
State House:March 14, 2013
Vote (lower house):29-8-3
State Senate:March 28, 2013
Vote (upper house):16-3-1
Conference:April 14, 2013
Conference Vote (upper house):19-1
Conference Vote (lower house):39-0-1
Governor:Sean Parnell
Signed:June 24, 2013

The state operating budget was passed by the State House on March 14, 2013. The State Senate passed its own version of the budget on March 28, 2013. A conference committee was appointed in early April 2013. The conference committee report was adopted by both houses on April 14, 2013.[13]

Governor Sean Parnell announced on May 21, 2013 that he would veto $2.5 million in appropriations from several budgets, including the state operating budget. He cited calculation discrepancies as the cause for his vetoes. The operating and capital budgets for 2014 included $1.1 billion less in unrestricted general funds than the fiscal year 2013 budget. Parnell ultimately signed the 2014 budget into law on June 24, 2013.[13][14]

Fiscal year 2013

See also: Alaska state budget (2012-2013)

Fiscal year 2012

See also: Alaska state budget (2011-2012)

Fiscal year 2011

See also: Alaska state budget (2010-2011)

Fiscal year 2010

See also: Alaska state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[6][9]

Historical state budget spending in Alaska ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $7,400 62.8% $1,322 11.2% $3,017 25.6% $50 0.4% $11,789
2010-2011 $8,948 64% $1,643 11.7% $3,173 22.7% $228 1.6% $13,992
2009-2010 $5,627 57.6% $1,209 12.4% $2,925 30% $0 0% $9,761
Averages: $7,325 62% $1,391.33 12% $3,038.33 26% $92.667 1% $11,847.33
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Alaska had a state debt of over $29 billion. Its state debt per capita was $40,714. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[15][16]

Total state debt in Alaska[17]
Type Totals U.S. rank
Total state debt $29,780,396,000 38
Per capita debt $40,714 1
State and other fund expenditures $8,722,000,000 35

Public pensions

See also: Alaska public pensions and Alaska public employee salaries

A 2012 report from the Pew Center on the States noted that Alaska's pension system was funded at 60 percent at the close of fiscal year 2010, well below the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[18]

Taken together, the funding ratio for the state's pension systems decreased from 74.2 percent in fiscal year 2006 to 54.7 percent in fiscal year 2012, a decrease of 24.7 percentage points, or 33.3 percent. Likewise, unfunded liabilities increased from approximately $3.4 billion in fiscal year 2006 to more than $8 billion in fiscal year 2012.[19][20][21][22]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[23]

The table below lists the Standard and Poor's credit rating for Alaska from 2001 to 2012 (grades from surrounding states are provided for additional context).[23]

S&P credit ratings from 2001 to 2012
Alaska Oregon Washington
2012 AAA AA+ AA+
2011 AA+ AA+ AA+
2010 AA+ AA AA+
2009 AA+ AA AA+
2008 AA+ AA AA+
2007 AA AA AA+
2006 AA AA- AA
2005 AA AA- AA
2004 AA AA- AA
2003 AA AA- AA+
2002 N/A AA AA+
2001 N/A AA AA+

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[24]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[24]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid ($ in millions) National rank
Alaska 19.97% $2,861 50
Oregon 36.09% $7,831 12
Washington 28.59% $9,743 37

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Alaska received $2,030,660,000.00 in federal funding between February 2009 and June 2013.[25]

Budget transparency

Transparency evaluation
Alaska Check Register
Searchability N
600px-Red x.png
Grants N
600px-Red x.png
Contracts N
600px-Red x.png
Line item expenditures N
600px-Red x.png
Dept./agency budgets N
600px-Red x.png
Public employee salaries P
Partial.png
Last evaluated in 2012.
See also: Evaluation of Alaska state website, Evaluation of Alaska state website and Constitutional provisions regarding reading of bills

[[Article II, Alaska Constitution#Section 14|Article 2, Section 14 of the state constitution] provides that bills must be read three times in each chamber on three separate days. The lower house may forego the second reading with a three-fourths vote.

Online checkbook register

See also: Alaska transparency legislation

The Alaska Check Register is an online database of state expenditures that was launched in February 2008. Then-Governor Sarah Palin said, "Alaskans deserve open, transparent government." Palin announced that all state expenditures over $1,000 would be available online via the checkbook register.

Government tools

The table to the right is helpful in evaluating the level of transparency provided by Alaska Check Register.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Alaska, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[26][27]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Alaska tied for 46th in the nation with three other states, earning three out of eight possible points.[27]

Alaska - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures N
600px-Red x.png
"Generally Accepted Accounting Principles" budget Y
600px-Yes check.png
Multi-year forecasting N
600px-Red x.png
Annual cycle Y
600px-Yes check.png
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast N
600px-Red x.png
Non-partisan staff N
600px-Red x.png
Constitution or statutory tax/spend limitations Y
600px-Yes check.png
TOTAL 3

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[27]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[28] According to the report, Alaska received a grade of F and a numerical score of 43, indicating that Alaska was "failing" in terms of transparency regarding state spending.[28]

Budget background

Alaska does not have a state income tax or statewide sales tax. 82% of Alaska’s estimated state revenues for 2010 are from oil taxes, royalties and fees.[29] Alaska has the lowest tax burden of all 50 states.[30]

Accounting principles

See also: Alaska government accounting principles

Article IX, Section 14 of the Alaska State Constitution mandates that "the legislature shall appoint an auditor to serve at its pleasure. He shall be a certified public accountant. The Auditor shall conduct post-audits as prescribed by law and shall report to the legislature and to the governor.”[31]

The Legislative Budget and Audit Committee is responsible for overseeing the Division of Legislative Audit. The Committee is composed of five members from the State Senate and five members from the State House.[32]

Audits are performed by the Division of Legislative Audit in order to ensure that Alaska state administrators comply with financial regulations and adequately manage their state programs. Audits are published online.

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  4. 4.0 4.1 4.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  5. NCSL, "Gubernatorial Veto Authority with Respect to Major Budget Bill(s)," accessed March 2, 2014
  6. 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  7. 7.0 7.1 7.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  8. 8.0 8.1 8.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  9. 9.0 9.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  10. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  12. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  13. 13.0 13.1 Open States, "HB 65," accessed April 15, 2014
  14. Anchorage Daily News, "Governor signs oil tax cut, budget bills, vetoes $2.5M," May 21, 2013
  15. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  16. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  17. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  18. "Widening Gap Update: Alaska," June 18, 2012
  19. "National Guard and Naval Militia Retirement System Actuarial Valuation Report as of June 30, 2012," accessed October 28, 2013
  20. "Public Employees' Retirement System Actuarial Valuation Report as of June 30, 2012," accessed October 28, 2013
  21. "Teachers' Retirement System Actuarial Valuation Report as of June 30, 2012," accessed October 28, 2013
  22. "Elected Public Officers Retirement System Actuarial Valuation Report as of June 30, 2012," accessed October 28, 2013
  23. 23.0 23.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  24. 24.0 24.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  25. Recovery.gov, "Stimulus Spending by State," accessed April 15, 2014
  26. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  27. 27.0 27.1 27.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  28. 28.0 28.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  29. Reuters, “Alaska sees $1.25 billion budget gap on oil price drop,” February 19, 2009
  30. Tax Foundation "Monday Maps: State and Local Tax Burdens vs. State Tax Collections" May 2010
  31. Alaska Division of Legislative Audit, "Brief History," accessed October 7, 2009
  32. Legislative Budget and Audit Committee, "Home page," accessed October 7, 2009