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The Tax Foundation, a nonprofit think tank based in Washington, DC, has released a detailed report titled “Navigating Alaska’s Fiscal Crisis.” In the report, author Jared Walczak begins by describing the situation in which Alaska finds itself:
“The boom of the late aughts, which saw petroleum-derived revenues soar to almost $12 billion in 2008 and remain above $5 billion a year until 2014, was never sustainable, and should have been regarded as an anomaly—a welcome one, to be sure, but not something on which to hang the state’s budget.
The inevitable decline is always painful, but predictable budget fluctuations can be smoothed, given the political will to set aside surpluses in the good years. But what if this time is different?What if what Alaska has experienced in recent years is not the trough of an economic cycle but a new normal?”