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Web posted
Monday, March 3, 2008
Senate action brings state’s liquid cash reserve to $13 billion
By Bradners’ Alaska Legislative Digest
The Senate’s version of SB 296, now in the House Finance Committee, appropriates $2.6 billion of the current projected revenue surplus to the constitutional budget reserve. An additional $1 billion would be appropriated to the statutory budget reserve, a second cash account. The $3.6 billion to be placed in the two funds, when combined with $3.1 billion now in the CBR and $6 billion in the permanent fund’s earnings reserve account, would give the state $12.7 billion in liquid cash reserves that could be tapped to meet a revenue emergency.
The permanent fund’s earnings reserve, unlike the permanent fund principle, can be appropriated by the Legislature to meet public needs.
Legislators are concerned that while the revenue outlook is good for now, declining oil production and the possibility of a decline in oil prices could put the state budget at risk in a few years.
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