Excerpts from Alaska's Fiscal Health
July 2001
Is There Life After the CBRF Runs Out?
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Oil revenues will always be volatile.
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The CBRF has served as the state's cushion, or shock absorber, in years of low
oil prices.
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A fiscal plan based on average oil prices would still leave the state in risk
in years of low oil prices.
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If the CBRF is gone, how would we pay for public serves when oil prices are
below average?
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The Permanent Fund dividend and Permanent Fund earnings are options.
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Paying millions of dollars a year for oil futures to lock in prices also is an
option. It's called hedging.
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The best plan is to keep $1.5 billion in the CBRF to balance the budget in
years of low oil prices.
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