Favorite Link Friday January 5, 2016

Alaska's Economy Trends and Future Projections

In the near term—over the next few years—three factors appear most likely to drive change in Alaska’s economy, all of which are uncertain and difficult to project. First, the decline in federal spending and employment of recent years appears likely to continue, although we don’t know what specific cuts may occur, and particularly whether or not significant reductions will occur to military units based in Alaska. National politics, including the outcomes of next year’s presidential and congressional elections, will likely influence how much money the federal government spends in Alaska and what it spends it on.  

A second important factor will be the response of Alaska’s oil industry to likely continued low oil prices and to potential reductions in state oil and gas tax credits. To date, Alaska has not yet experienced the dramatic decline in oil industry employment that has occurred in most other US oil-producing states. This reflects in part the larger scale of Alaska oil fields and investments and the increased difficulty of oil extraction from aged fields which requires more labor. However, Shell’s recent decision to stop further offshore oil exploration on its Chukchi Sea leases—in which low oil prices were almost certainly a contributing factor—was a reminder that oil prices affect profitability and investment in remote, high-cost areas such as Alaska. Moreover, the recent further slide in oil prices to below $40/barrel (as of early December) will further test the oil industry’s ability and willingness to invest in Alaska exploration and development.  

A third important factor—and likely the largest driver of near-term economic changes—will be how the state adjusts to dramatically lower oil revenues. [Source]

State of Alaska Bold Proposal Shifts Oil Volatility Away from Budget

On December 9, Governor Bill Walker of Alaska (Aaa negative) released a $4.8 billion fiscal 2017 budget proposal that would redirect the flow of petroleum-related tax revenue, restructure the distribution of earnings from the state’s $47 billion Permanent Fund, and levy an individual income tax for the first time in 35 years. The proposal represents a bold effort to address the state's enormous budget imbalance caused by sharply lower oil prices and to shift the future funding of government operations away from direct oil sector volatility.  

Oil and gas production-related taxes provided nearly 90% of the state's fiscal 2014 general fund revenues, but these revenue sources declined by more than 60% over the subsequent two fiscal years. To close the resulting budget gaps, the state tapped its substantial fiscal reserves, drawing down $2.8 billion in fiscal 2015 and an estimated $3.4 billion in fiscal 2016, even after cutting $1.1 billion of operating and capital spending from the 2016 budget.  

The expected reserve draw this year covers a very large 68% of estimated expenditures, while the projected gap between unrestricted revenues and expenditures for fiscal 2017 is about 63%. The centerpiece of the governor's plan is a proposed increase in the amount of Permanent Fund investment earnings (calculated on a smoothed return basis) transferred to the state's general fund each year. To accomplish this the plan would replace the annual dividend paid to Alaska residents from the Permanent Fund's earnings with a smaller dividend paid from half of annual production-related revenues.
The remainder of the production-related revenue would be transferred to the Permanent Fund. The estimated annual transfer to support the general budget is $3.2 billion, compared to production revenue and reserve draws of $4.4 billion in fiscal 2016. The goal of this new approach is to shield the state's operating budget from volatility in the global commodity markets while still allowing Permanent Fund principal to grow over time.  

The proposed income tax would generate approximately $200 million in annual revenue, while adjustments to other taxes would yield another $260 million. The budget proposal also cuts $100 million from agency budgets in fiscal 2017 following significant reductions that started in fiscal 2013. Since then, spending has been cut from $8 billion to $5 billion, a 35% reduction. The state would also modify the oil and gas tax credit system, although it would honor existing claims. To provide economic development assistance, the plan establishes a low interest revolving loan program as a substitute for tax credits, with interest rates tied to job production for Alaskans. These actions are estimated to produce $500 million in yearly benefit to the state's budget. [Source]

Compare and Contrast:

Protein World sparked protests with its billboards — now it's launching TV ads

The fitness-supplement company Protein World made a lot of people very angry last summer when its billboard advertising campaign, which asked "Are you beach body ready?" was labeled "sexist" and accused of "fat shaming." [Source]

Jezebel Blogger Shames Tattoo Artist for Not Giving her a Neck Tattoo

Dan: “Okay, so you’re both getting this one on your arms, yes?
Me and Sasha: [In unison] “Yes, please! About this size...” blah, blah.
Dan: “And then you want your daughter’s name... on your neck?” Shakes head left to right.
Me: “What.”
Dan: “Not gonna happen.”
Me: “Wait, what? Why?”
Dan: “It’ll look tacky. It’s just tacky.”
Me: “Wait, you’re telling me what will look tacky on me? Don’t I get to decide that?”
Dan: “A neck tattoo on someone without a lot of tattoos is like lighting a birthday candle on an unbaked cake.”
Stunning analogy, right? I wonder: Does Dan know what an analogy even is? And then suddenly I’m fighting back tears because, as Dan has already correctly assessed, I’m just a feeble-minded, hysterical girl. And then I ask the next thing that pops into my head.
Me: “Would you say this to a guy?”
Dan luh-hiterally paused, looked askance, and said with a slight nod, unconvincingly, “Yeah.”[Source]

Meanwhile in Europe:

Migrant sex crime shock - 118 women assaulted by gangs across Germany on New Year's Eve

The major migrant cover-up claim was sparked after it became clear at least one public funded broadcaster ignored the brutal assaults on women by marauding gangs up to 1,000 immigrant men in Cologne, Hamburg and Stuttgart. A huge number of women have come forward saying they were victims of the shocking crimes, which included rape, sexual assault, and robbery. They claimed the attacks were carried out by gangs of “north African and Arabic appearance” [source]

Police Helpless to Prevent the Rapes over New Years as Migrants Taunt Them

The police have, however, we can not help each victim. Also, identification of the perpetrators had not been possible. "The task forces were not all events, assaults, crimes, etc. Lord, but there were just too many at the same time." The report says literally: "Due to the constant presence of the forces and attentive pedestrians at the station, completed rapes were prevented become." 

Offs have remained often ineffective. Concerned people had always returned and made themselves a "fun of the situation." "I am Syrian, you have to treat me kindly! Mrs Merkel has invited me ", was according to a report of Proverbs, had to listen to the officials. [Source]

[Swedish] Migrant in Sweden murders 7 YEAR OLD SWEDISH GIRL of his host family

Gebru [the migrant] has not been able to give any other more concrete reasons for why he cut the throat of the seven-year girl in the bathroom of her home. He had previously been inherent in the apartment. What he did there on that day is unclear because according to some data was not living there anymore. As the Court notes, however, he should have lived in the apartment when the murder was committed but have failed to pay the rent. Gebru has stated that he had intended to take his own life but for unknown reasons instead stabbed the girl to death. He inflicted but also themselves afterwards a cutting injury. The retrospective self-inflicted injury could of course have been a way to hide the real motive for the crime against the girl, but the court chose to go on the defense line in this part, that the murder was committed in a state of mental confusion and no real motive to the girl or To cover up another crime against the girl. [Source]

Slovakia will not let Muslim "Refugees" into the Country

The Slovak Prime Minister Robert Fico announced that his country would in response to the sexual assaults on women in Cologne leave Hamburg and no Muslim refugees into the country. "We do not want that in Slovakia anything can happen, as in Germany," he said in a press conference called at short notice in Bratislava. Slovakia will not only continue the enforcement of mandatory EU quotas for admission of refugees to fight, but also prevent a closed Muslim community could arise. "The idea of ​​a multicultural Europe has failed," Fico said. "The migrants can not be integrated, it is simply impossible." [Source]