The following section outlines Alaska’s full post-reform budget scenario under the assumption of $40 per barrel oil prices. With the restoration of the original statutory Permanent Fund Dividend (PFD) formula, the repeal of the Percent of Market Value (POMV) statute, and the implementation of systemic government and administrative reforms, Alaska can operate a balanced budget while preserving the corpus of the Permanent Fund.
Revenue Assumptions (Post-Reform)
• Oil Production Estimate: 470,000 barrels/day
• Oil Price Assumption: $40/barrel
• Annual Oil Revenue to UGF: ~$450–500 million
• Permanent Fund Realized Earnings: ~$4.5–5.0 billion
• Statutory PFD (50% of Realized Earnings): ~$2.25 billion
• Remaining Earnings to General Fund: ~$2.25 billion
• Total Available Unrestricted Revenue: ~$2.7–2.8 billion
Expenditure Reductions from Lean Government Reform
• Education Reform (DEED/district dissolution, ESA redirection): $600–800 million
• Medicaid Rollback and Health Agency Reforms: $200–350 million
• Administrative Reduction and AI Modernization: $120–250 million
• State Travel/PR Budget Cuts: $19–39 million
• State Corporation and Pension Reform: $300–500 million
• Capital Project Deferrals (Ambler, NPR-A): $50–100 million
Fiscal Stability and Sustainability
This model enables Alaska to:
• Operate a fully funded government at $40 oil
• Pay the full statutory PFD
• Preserve and grow the Permanent Fund corpus
• Avoid new taxes or debt issuance
• Reinvest surplus earnings into infrastructure, resource development, and community-led education and healthcare models
Summary
Under this framework, Alaska achieves long-term budget balance through aggressive modernization, reduced dependency on federal programs, and optimized use of its own natural resource wealth. With $40 oil as the baseline, Alaska proves it can fund its obligations, honor the PFD, and build a sustainable economic future without growing government or surrendering its sovereign potential.
The views expressed here are those of the author.
8 Comments
Dream on, Michael!!!
GREAT
Our legislatures don’t want to release the full statutory PFD, they believe the funds are theirs to spend on pet projects, and cycle through to their union supporters back to their campaigns.
It’s the Law to a Full PFD
TRUMP: “A lot of people are saying maybe we’d like a dictator.”
Biden you mean, when we were told to stay home, wear a mask get the shot etc. Just like sheep jumping off the cliff together holding hands.
No dude, your Vandal President said that. He is really close to destroying our democracy and replacing it with a lot of pain and chaos from which America may never recover. But lucky you. You get to make up stuff and believe it, evidence not required. You, as a Trump fool, are directly responsible for the cruelty and waste.
Michael Tavoliero,
If the plan is to shut the state down your unrealistic budget proposal works. Alas, If you want a state where people choose to live your proposal does not pass the mustard. How about all Eagle River and Mat SU follow your ideas and see how it works out. Please run for office and see how your ideas work out.