Alaska Has Most Volatile State Revenues

A new study says that Alaska has the most volatile state revenues in the nation, with income fluctuating more than twice as much as that of its nearest rivals -- which are often also resource states.

 

The study recommends that states set up and make regular deposits into "rainy day" funds, into which they can dip when tax revenues fall short.

 

This week, some leaders of past efforts to plan for the future said Alaska needs to resume those efforts, and new deficits may actually prompt that.

 

"When we've been flush, the public sees large surpluses and comes to us looking for things that the public thinks are good and needed," said Rep. Mike Hawker, R-Anchorage.

 

Then legislators respond with more spending.

 

Or, as Hawker puts it, "It's much harder to say 'no' when there's a lot of money sitting there."

 

But now, those years of surpluses have ended, and the state is facing years of deficits.

 

The study by the Pew Charitable Trusts, called "Building State Rainy Day Funds," ranked volatility of state tax revenues and concluded that the states with the most variation in tax collection needed the biggest funds.

 

Alaska ranked first in the nation in standard deviation of year-over-year change in total tax revenue from 1994 to 2012, at 34.2 percent.