Legislature(2025 - 2026)ADAMS 519
01/22/2026 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Department of Revenue Fall Forecast | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
January 22, 2026
1:33 p.m.
1:33:14 PM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 1:33 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Elexie Moore
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Janelle Earls, Acting Commissioner, Department of Revenue;
Dan Stickel, Chief Economist, Economic Research Group, Tax
Division, Department of Revenue.
SUMMARY
PRESENTATION: DEPARTMENT OF REVENUE FALL FORECAST
1:33:36 PM
Co-Chair Josephson reviewed the meeting agenda.
^PRESENTATION: DEPARTMENT OF REVENUE FALL FORECAST
JANELLE EARLS, ACTING COMMISSIONER, DEPARTMENT OF REVENUE,
introduced herself and turned the presentation over to a
colleague.
DAN STICKEL, CHIEF ECONOMIST, ECONOMIC RESEARCH GROUP, TAX
DIVISION, DEPARTMENT OF REVENUE, provided a PowerPoint
presentation titled "Fall 2025 Forecast Presentation: House
Finance Committee," dated January 22, 2026 (copy on file).
He reviewed the agenda on slide 2. He moved to slide 4
showing a background of the fall revenue forecast. He
advanced to the fall forecast assumptions on slide 5:
Fall Forecast Assumptions
• The economic impacts of financial and geopolitical
events are uncertain; Department of Revenue has
developed a plausible scenario to forecast these
impacts
• Key Assumptions:
• Investments: Stable growth in investment markets,
7.60% for remainder of FY 2026 and 7.30% for FY
2027+
• Federal: The forecast incorporates known funding as
of December 1, 2025. FY 2028+ assumed to grow with
inflation
• Petroleum: Alaska North Slope oil price of $65.48
per barrel for FY 2026 and $62.00 per barrel for FY
2027
• Non-Petroleum: Stable economic conditions. 1.7
million cruise passengers, five-year recovery for
fisheries taxes, minerals prices based on futures
markets
• The revenue forecast is inherently uncertain and
represents one scenario among a range of many
possible scenarios
Mr. Stickel elaborated on the slide. // record gold and
solar prices. The forecast was based on the futures market
//
1:39:54 PM
Representative Hannan asked what the average had been for
oil for the past six months.
Mr. Stickel replied that thus far oil prices were tracking
very close to the forecast. //
1:40:43 PM
Mr. Stickel looked at total revenue from all sources on
slide 6. He noted that state revenue was a three legged
stool with petroleum, federal, and investment earnings
making up the majority. He moved to slide 7 showing
unrestricted state revenue. He reported that 90 percent of
the state's unrestricted revenue came from investment
earnings and petroleum.
Representative Allard asked //
Mr. Stickel would follow up.
Representative Allard asked for the percentage as well.
1:42:50 PM
Mr. Stickel addressed the total revenue forecast on slide
9. // unrestricted general fund (UGF) // designated general
funds (DGF), other restricted funds, federal revenue //
under federal law all of the // the head tax on cruise
ships // all federal revenue coming into the state had to
be used for // purposes // total state revenue // $17.8
billion and $15.3 billion for FY 27.
Representative Galvin looked at the difference in the
federal revenue from FY 27 to FY 27. She observed there was
a significant reduction. She assumed it pertained to
healthcare. She asked //
Mr. Stickel replied that the majority of the presentation
focused on UGF. // He deferred to OMB for detail. He
relayed that in the past there was some one-time funding
for broadband enhancements //
1:45:56 PM
Representative Hannan looked at a significant decline in
other restricted
Mr. Stickel replied // FY 25 was a strong year for market
returns // rest of FY 26 and FY 27 return to a more noral
rate of return //
Co-Chair Josephson //
Mr. Stickel agreed.
1:47:41 PM
Mr. Stickel move to slide 10 reflecting the changes in the
two-year outlook. // The lower oil price outlook was the
primary //
Mr. Stickel moved to slide 11 // investment revenue was the
largest source // investments generated about // petroleum
revenue generated // non-petroleum revenues generated //
forecasted for FY 26 //
1:50:35 PM
Mr. Stickel turned to investments on slide 12. The
Permanent Fund was projected to generate $3.8 billion in FY
26 and $4 billion in FY 27. Forecasting slight reductions
to the number based on // He moved to slide 13 showing
unrestricted investment revenue from the percent of market
value (POMV) transfer forecast. The 5 percent calculation
was based on the average fund value of the first five of
the past six years.
1:52:44 PM
Mr. Stickel looked at unrestricted petroleum revenue on
slide 14. At current price // total tax revenue would be at
or below the minimum tax floor // oil and gas production
tax was forecast at $316 million in FY 26 and $285 million
in FY 27. // petroleum corporate income tax // petroleum
property tax was $134 million in FY 25 and forecast at $143
million in FY 26 and $144 million in FY 27. He moved to
royalty revenue in the bottom portion of the table. //
1:55:09 PM
Co-Chair Josephson asked about the mineral bonuses, rents,
and interest. He asked if it did not include // He
generally saw //
Mr. Stickel noted that it was only related to oil and gas
and did not include any mining royalty.
Co-Chair Josephson asked what pertained to hard rock
minerals.
Mr. Stickel answered it was a significant number // over
$100 million per year // He could follow up with details.
Co-Chair Josephson declined the additional information and
understood the number was somewhere over $100 million.
Mr. Stickel addressed unrestricted non petroleum revenue on
slid 15. // offset by increased revenue expectations // He
looked at the mining license tax that brought in $42.7
million in FY 26 and was expected to bring in $62.4 million
in FY 27. // He looked at program receipts. The division
had worked with OMB over the interim // any program
receipts that were surplus // previously were unrestricted
// a little over $60 million //
1:59:22 PM
Representative Hannan asked about the large passenger
vessel gambling tax. She was surprised it was not bringing
in more, especially due to an increase in cruise ship
passengers. //
Mr. Stickel replied that it was a tax on the income earned
by casinos and gambling operations. The revenue had been
growing in recent years // the revenue source had typically
exceeded the division's expectations. He thought it would
level off //
Representative Hannan noted that it did not grow in
relation to the number of passengers. //
Mr. Stickel replied that the revenue source had grown // He
pointed to page // of the Revenue Sources Book // the
revenue had taken off after the COVID-19 pandemic //
2:01:58 PM
Representative Stapp looked at unrestricted revenue // He
thought it was likely restricted.
Mr. Stickel // how they were classified in the fall
forecast. Prior to the // the entire amount of the payments
were treated as a pass through to communities but it did
not // the passage of the big beautiful act // the reality
the monies would be used // 25 percent going to the
Permanent Fund //
Representative Stapp noted there was a different state
statute // 9.6 would use the approach in state statute //
Mr. Stickel turned to slide 14 and discussed the $9.6
million of Natural Petroleum Reserve-Alaska (NPRA) //
Representative Stapp had a hard time understanding how the
number had been derived.
Mr. Stickel replied // any bonuses from ongoing lease sales
// annual rent payment // a portion of the Colville River
Unit // shared 50 percent with the state. He believed
Representative Stapp was referring to large revenue in the
future resulting from Willow field coming online //
2:06:01 PM
Representative Stapp asked if the state was taking money
from communities //
Mr. Stickel deferred any further questions to the
Department of Law //
Co-Chair Josephson stated there were smart people on both
sides of the issue // the local people were not going to be
silent on the topic //
Mr. Stickel could speak to the change in the revenue
forecast. Anything related to litigation he would defer to
DOL.
Co-Chair Josephson asked if // suggested the state was
providing a service for a fee. He asked if it was the
reason there were receipts //
Mr. Stickel answered that program receipts was a large
category in the state budget. It was not his area of
expertise. // the Division of Motor Vehicles (DMV)
collected about $70 million annually for motor vehicle
registration and licensing fees. // provide the service.
There was a surplus // the amount required was //
2:08:56 PM
Co-Chair Josephson asked for verification that there was
someone on a large passenger vessel //
Mr. Stickel answered that // tracked the time in state
water // factored into the calculation. There was not a DOR
official standing on the boat //
2:09:46 PM
Mr. Stickel turned to slide 17 showing petroleum detail:
changes to the long-term price forecast. // generate the
price forecast on December 5 // the FY 26 forecast was
reduced // the longer term forecast // the change in the
forecast reflected an anticipation // He moved to slide 18
showing petroleum detail: nominal brent forecasts
comparison as of January 21, 2026. The current futures
market was mostly unchanged since the time the division
prepared its forecast in the beginning of December. //
typically the lines were clustered close together and the
slide reflected a difference from past years. //
uncertainty in risk premium // some of the analysts were
more bullish on the forecast over years // as demand growth
remained strong. Historically in the // were wrong // felt
comfortable with the range //
2:14:18 PM
Mr. Stickel advanced to slide 19 showing what would happen
to revenues if prices were different than the forecast. //
FY 27 forecasted (UGF) revenue not including the Permanent
Fund transfer was about $2.2 billion // He moved to slide
20 showing petroleum detail: changes to North Slope
petroleum production forecast. // FY 30 started to show the
impacts of Willow and Pikka coming online // over 650,000
barrels per day in // firming up the timeline around Pikka
and Willow
2:17:06 PM
Mr. Stickel moved to slide 21 showing petroleum detail
related to North Slope allowable lease expenditures. //
continued to ramp up on major developments like Pikka and
Willow // forecasting the high water mark // operating
expenditures were $3.1 billion in FY 25 //
Co-Chair Josephson noted that the investment was there even
though there had been articles highlighting cuts to
employees in the industry.
Mr. Stickel replied //
Representative Hannan asked how long the capital
expenditure reductions could be paid out //
Mr. Stickel responded that for the net profits portion of
the tax // to the extent a company had income and revenues
from work on the North Slope // if the company was a new
entrant and did not have sufficient revenue // it would
earn a carryforward tax expenditure // could be carried
forward // at a certain point they began declining
2:21:39 PM
Representative Hannan considered a historic revenue // on
the North Slope // could stretch out for another decade for
taxes owed.
Mr. Stickel replied affirmatively. // about $6.4 billion of
the $8 billion was applied to the tax calculation // became
carryforward lease expenditures //
Co-Chair Josephson asked if they could go below the floor
// gvr (gross value reduction) //
Mr. Stickel answered // per taxable barrel for new oil //
Co-Chair Josephson noted that the committee may hear
something about the issue that evening [during the
governor's State of the State address].
Representative Stapp looked at the graph on slide 21 //
2:24:46 PM
Mr. Stickel asked Representative Stapp to rephrase the
question.
Representative Stapp asked why the projection showed //
companies in the outyears.
Mr. Stickel // net profits calculation // relatively low
oil prices and relatively high spending // investments and
significant inflation // lower value // 4 percent gross tax
would be higher than the net profits tax //
Representative Stapp asked how long the foreseeable future
was.
Mr. Stickel replied // 10 year revenue forecast.
2:26:31 PM
Representative Bynum referenced the statement relatively
low oil prices. He asked for detail.
Mr. Stickel answered that he had been comparing to a period
of $100 per barrel oil prices //
Representative Stapp asked if there was any benchmark to
help understand values //. $60 per barrel //
Mr. Stickel responded that each company // in the aggregate
the division expected around $64 per barrel // very close
to the level // other companies that would not exceed // it
depended on how much the companies were investing //
2:28:57 PM
Representative Stapp looked at the range of 60 to 100 // 10
plus years.
Mr. Stickel answered that the division forecast tax
liability for every company // the number published in the
Revenue sources book was an aggregate // companies paying
at, below or above the minimum tax floor.
Representative Stapp asked for an indicator that would
change the calculus.
Mr. Stickel replied that it included oil price, oil
production, spending, and transportation cost.
2:30:45 PM
Co-Chair Josephson asked for a repeat of the four
variables.
Mr. Stickel replied price, lease expenditures, production.
transportation cost. He moved to slide 22 and discussed
North Slope transportation costs. // the average
transportation cost in FY 25 was // the number would be
stable and declining in the 10-year forecast.
2:32:50 PM
Mr. Stickel looked at slide 23 titled "State Petroleum
Revenue by Land Type." // applied to everything in the
state // the state received all royalty // for NPRA
currently 50 percent was shared with the state // would
increase to 70 percent //
Co-Chair Josephson asked if the state received a 5 percent
royalty on private land.
Mr. Stickel asked //
Co-Chair Josephson asked about the Gulf of Mexico //
Mr. Stickel //
Representative Hannan directed a question to the acting
commissioner. She asked for an update on the status of the
oil tax audits //
Acting Commissioner Earls answered that the department was
working with // on the audits. They were not complete.
Representative Hannan asked if there would be 7 or 5 years
of audit information.
Acting Commissioner Earls believed it went back to 2018.
Representative Hannan stated she would ask the auditor the
same question. She asked about an expectation completion
timeline.
Department of Revenue did not have any information on it at
the time.
Co-Chair Josephson thanked the presenters. He reviewed the
schedule for the following day.
ADJOURNMENT
2:38:35 PM
The meeting was adjourned at 2:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| H.FIN DOR Fall 2025 Forecast Presentation 01.22.26.pdf |
HFIN 1/22/2026 1:30:00 PM |