Falling oil prices aren’t just affecting countries that rely on oil revenue. The price drop is severe enough that Alaska’s bond rating has been dropped to ‘negative’. Revenues are falling as oil prices fall, but the government has not acted to replace the revenues with other sources. Lower income without lower expenses leads to the possibility of another downgrade. Deciding on how to raise the revenues requires enacting policies, like increasing taxes or reducing subsidies, that are uncommon in Alaska, and yet may be necessary. The state’s main benefit that keeps it from being another Puerto Rico is the large cash reserves from earlier oil revenues.

S&P Drops Alaska’s Bond Rating Outlook” – Alaska Dispatch News

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s