A new paper by ISER researchers Mouhcine Guettabi, Trang Tran, and Linda Leask aims to give some context to to the ongoing debate about how much Alaska’s state government should be spending, as it faces big budget deficits. The paper look at state spending in several ways.
As of 2015 (the most recent year for which cross-state data are available), per-person spending by Alaska’s state and local governments was twice the national average. But much of that gap is due to Alaska’s unique spending programs (PFDs being the largest but not the only one), higher living costs, and federal grants that are twice the U.S. average per person.
Adjusting for Alaska’s unique spending and higher living costs, spending per person in Wyoming (another oil-producing state with a small population) was higher than Alaska’s in 2015. Spending in North Dakota (another oil-producer with a small population) was within 15% of Alaska’s.
Over the 20-year period from 1992 to 2015, real (adjusted for inflation) spending per person in Alaska grew much slower than the national rate—50% compared with 73%. Alaska’s spending did grow faster than the national rate in the last years of that period, when oil prices were high.
Download the paper, How Does Spending in Alaska Compare? A grant from Northrim Bank helped fund this research. If you have questions, get in touch with Mouhcine Guettabi, assistant professor of economics at ISER, at email@example.com or 907-786-5496.