Falling World Oil Prices Wreak Havoc With Alaska State Budget

As Allen Newton, 58, filled his ice-caked Ford Expedition for $3.15 a gallon, he happily tried to remember the last time gasoline was so cheap here in Alaska’s biggest city.

“It’s been a long time coming,” Newton said Sunday afternoon, breath steaming outside a downtown gas station.

At the same time a few blocks away, freshly elected Gov. Bill Walker met with his new bipartisan Cabinet. He was talking about oil prices too.

A crash in Alaska North Slope crude prices that echoes a worldwide drop in the price of oil has raised the possibility of multibillion-dollar deficits in a state where 88 cents of every dollar spent by state government comes from oil production.

Alaska crude hit a four-year low of $60.80 a barrel Thursday, a collapse that threatens jobs, public services and some of the ambitious infrastructure projects needed to harness and navigate the state’s vast natural landscape. State officials are now projecting a $3.5-billion shortfall in funding the state’s original spending plans. (Read more from this story HERE)