Effect of Alaska Fiscal Options on Children and Families

How might steps Alaska’s state government takes to balance its budget affect Alaska families? Different ways of closing the state’s $3 billion budget gap—the result of lower oil prices and dwindling oil revenues—will have different effects on households with and without children, according to a new report by Matthew Berman and Random Reamey of ISER. They looked specifically at how state income, sales, or property taxes and a cut in Permanent Fund dividends would affect incomes of households with and without children.

They found that a cut in PFDs would be by far the costliest measure for households with children—compared either with what they would pay under any of the tax measures, or with what PFD cuts would cost households without children. Households with children would pay about 2.5 times more of their per-person incomes than those without children, for every $100 million of revenue raised.

Download the summary (PDF, 696KB) or the report (PDF, 702KB), Effects of Alaska Fiscal Options on Children and Families. If you have questions, call Matthew Berman, professor of economics, at 907-786-5426

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