1 / 25

Maximum Sustainable Yield: A Fiscal Road Map for Alaska

Maximum Sustainable Yield: A Fiscal Road Map for Alaska. University of Alaska Budget Committee Fairbanks, Alaska August 8, 2013 Scott Goldsmith Institute of Social and Economic Research University of Alaska Anchorage With Generous Financial Support From.

aman
Download Presentation

Maximum Sustainable Yield: A Fiscal Road Map for Alaska

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Maximum Sustainable Yield:A Fiscal Road Map for Alaska University of Alaska Budget Committee Fairbanks, Alaska August 8, 2013 Scott Goldsmith Institute of Social and Economic Research University of Alaska Anchorage With Generous Financial Support From

  2. Alaska Petroleum Revenues: $183 Billion since 1977

  3. GF Appropriations Has Grown to Match Higher Revenues

  4. DOR Projected Petroleum Revenues Fall 2012 (before SB21) – 5% Real Decline Rate

  5. Non Petroleum GF Revenues (per capita)

  6. Non-Petroleum Strategies for the Future? • Natural Resource Development • Value Added Processing • Economic Diversification • Infrastructure Investments in Power and Transportation • Footloose Industry • Renewable Energy

  7. Replace $7.5 Billion in Petroleum Revenue with Taxes on Other Resources $10,000 / OZ. GOLD $50 / SALMON $5,000 / TOURIST *Estimate for FY 2011

  8. Alaska: An Island Economy

  9. Petroleum Wealthin the Bank (Billion $)

  10. 10 Year Fiscal Plan: Judicious Use of Reserves ? $3 $400 million in 2013, $700 million in 2014

  11. A Bridge to Nowhere?

  12. Wellhead Values: Oil vs Gas Tax Base $3.8 $17.2 Gas Pipeline @ 3.5 bcf Oil Pipeline @ 500k

  13. Limited Petroleum Revenue Potential

  14. How Can We Sustain a Healthy Level of Public Services in the Future? MAXIMUM SUSTAINABLE YIELD Management of our biggest asset—Petroleum. How Big is Our Nest Egg? How Should We Manage It? How Should We Spend it?

  15. HOW BIG IS THE NEST EGG? $200,000 for each current resident

  16. HOW SHOULD WE MANAGE THE NEST EGG (Asset, Endowment)? For Maximum Long Run Return

  17. DRAW each year at a rate that will conserve the value of the Nest Egg for future generations of Alaskans—the Maximum Sustainable Yield. HOW MUCH OF THE NEST EGG SHOULD WE SPEND?

  18. Maximum Sustainable Yield: Calculation

  19. Maximum Sustainable Yield: Mechanics (2013) NEST EGG $4.5 $7.3 Oil & Gas Revenue Financial Earnings Nest Egg Cash Flow Saving & Reinvestment 4% Draw $6 $5.8 Total Maximum Sustainable Yield $6

  20. Maximum Sustainable Yield:Disposition (2013) Total Maximum Sustainable Yield $6 $5 $1 GF Non Petroleum Revenues General Fund Permanent Fund Dividend $.5 $5 $5.5 GENERAL FUND MAXIMUM SUSTAINABLE YIELD

  21. Maximum Sustainable Yield: Nest Egg Growth

  22. Maximum Sustainable Yield: General Fund Growth

  23. FY 13 & 14 General Fund Spending (Billion $) * Sustainable with income and sales taxes.

  24. MSY Sensitivity to Assumptions

  25. Maximum Sustainable Yield:A Fiscal Road Map for Alaska University of Alaska Budget Committee Fairbanks, Alaska August 8, 2013 Scott Goldsmith Institute of Social and Economic Research University of Alaska Anchorage With Generous Financial Support From

More Related