A hit to Alaska’s economy due to low oil prices is unavoidable according to one economics professor.
The House Finance Committee heard from Gunnar Knapp Thursday, who delivered preliminary findings from a study of the economic impacts of spending cuts, taxes, and cutting PFD checks to deal with low oil prices.
He told legislators that the easiest way to deal with the reality of fairly low oil revenues is to work on making significant headway on reducing Alaska’s multibillion-dollar budget deficit this year.
Knapp says the approach must be weighed out though: fully closing the budget gap this year would negatively impact the state’s already weakened economy and doing nothing would be bad also.
He says he can’t define what significant progress might look like.
Professor Knapp is director of the University of Alaska Anchorage’s Institute of Social and Economic Research.