Oil-rich Alaska's budget deficit could hit US$3b as crude prices go south

Washington

WHAT US state is as hooked on oil revenues as Venezuela, Iran, or Russia? It's Alaska.

Plunging oil prices have blown a huge hole in the budget of the oil-rich state, where in recent years taxes on oil production have covered more than half the total budget (US$13.5 billion including federal funds and capital projects) and 90 per cent of the state's discretionary spending (US$6.5 billion to run agencies and schools).

Now, with prices under US$70 a barrel, the budget deficit could balloon to more tha…