Alaska lawmakers told by DOR to expect state revenue losses in near future
Department of Revenue’s forecast updates anticipated oil prices, production
ANCHORAGE, Alaska (KTUU) - State revenue is expected to decrease in the next couple of years after a slight increase for Fiscal Year 2025, according to Department of Revenue leadership, who addressed the House Finance Committee Thursday afternoon.
DOR data shows state revenue totaled approximately $16.3 billion for FY24, with the department projecting a bump to about $16.8 billion for FY25.
The so-called “three-legged stool” – of federal revenue, investment earnings, and petroleum – makes up about 92% of that, with industries such as seafood and tourism rounding out the total accumulation.
In the budget year 2026, however, state revenue is expected to drop to about $15.7 billion. The forecasts for unrestricted revenue, including permanent fund transfers, are down $220 million for FY25 and down $232 million for FY26.
The department’s forecast for unrestricted petroleum revenue is also expected to shrink over the next couple of years.
On the other hand, total unrestricted investment revenue is expected to rise, projected to go from $3.67 billion last year, to nearly $3.8 billion in fiscal year 2025, and almost $3.9 billion the following year.
The same report, which was initially released in late 2024 and is the most recent forecast released by the DOR, also details an anticipated increase in oil production over the next decade. With an expected average of 466,600 barrels per day for FY 2025, the agency is also forecasting producing 469,500 barrels daily for FY 2026, before climbing to 656,900 barrels per day in FY 2034.
The full report can be found on the Department of Revenue’s Tax Division website.
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