Tags: Bill Walker | Alaska | gas prices | budget

Gas Prices Force Alaska Governor to Make Hard Choices

Image: Gas Prices Force Alaska Governor to Make Hard Choices
Gov. Bill Walker, R-Alaska. (Chip Somodevilla/Getty Images)

By    |   Monday, 26 Jan 2015 03:01 PM

Consumers may not cheer the news that after falling every month since July, the slide in gas prices may be nearing an end, but one person certainly is Alaska Gov. Bill Walker.

"In the past 10 days, the wholesale prices that gasoline marketers and retailers pay are up. Retail prices will most likely be bottoming soon, if they haven’t already," Trilby Lundberg, the president of Lundberg Survey, told Reuters.

Prices for regular grade gasoline fell to $2.07 a gallon in the survey dated Jan. 23 from the previous survey on Jan. 9, according to the Lundberg survey released Sunday.

Governors from energy-producing states all are facing stark budget choices as gas prices decline and the bottoming-out of the global energy market, but Alaska's economy is viewed as more vulnerable than the rest.

A recent analysis by S&P Ratings predicted that if oil prices remain at record lows through the next year, several states will face intense budget pressures, including Texas and Wyoming, but Alaska faces the biggest challenge because oil- and mineral-related revenue as a share of its budget is the highest of all at 87 percent, reports US News & World Report.

In addition, much of the state's 2014 budget was based on higher gas prices and Moody's recently downgraded its outlook for the state from "stable" to "negative," reports Politico.

"The oil plunge caught them off guard, and now they are trying to recalibrate," Ted Hampton of Moody's said in an interview.

Walker acknowledged in his address on the budget that the government cannot impact gas prices, it can control spending, which he said could not be sustained.

"The fiscal year 2016 budget recommendation begins with cutting back on spending," Walker said in his State of the Budget Address.

"I asked all of our commissioners to submit scenarios if their department budgets were reduced by 5 to 8 percent. I have analyzed these responses, and am now forwarding a 2016 general fund budget that reduces non-formula agency spending by 6.5 percent from fiscal year 2015, and 5.4 percent below the work-in-progress budget," he added.

The governor, who switched his party affiliation from Republican to Independent and ran with a Democrat as his running mate, also is considering raising taxes, which has received a chilly reception from the Republican-controlled Legislature, reports The New York Times.

"We might agree to disagree. I’ve tried to keep an open mind and keep all avenues of conversation open, and I’ll continue to do that until we either decide that we can make this work or we can’t," Republican state House Speaker Mike Chenault told the Times.

While Walker and Republicans in the Legislature may disagree on how to solve the budget crisis, they share an opposition to the Obama administration's plan to protect more than 12 million acres of the Arctic National Wildlife Refuge, including 1.5 million acres of the Coastal Plain.

"Having just given to Alaskans the State of the State and State of the Budget addresses, it’s clear that our fiscal challenges in both the short and long term would benefit significantly from increased oil production. This action by the federal government is a major setback toward reaching that goal," Walker said in a statement released after the White House formally announced their plan on Sunday.

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Consumers may not cheer the news that after falling every month since July, the slide in gas prices may be nearing an end, but one person certainly is - Alaska Gov. Bill Walker.
Bill Walker, Alaska, gas prices, budget
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2015-01-26
Monday, 26 Jan 2015 03:01 PM
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