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3. Budget History

3.1 General Fund

The state pays for most basic public services out of the unrestricted general fund. Appropriations from the unrestricted general fund increased through the early 1990s, but in the last few years they have been trending downward modestly. At the same time other parts of the budget have been expanding. (See Budget Shifting and Operating Spending.)

Operations is the largest part of the general fund and it has experienced the most stable growth. Capital expenditures and loan appropriations grew dramatically during the "petrodollar" boom of the early 1980s but have since fallen and constitute a small share of the total general fund.

These figures include supplemental appropriations. They do not reflect the recent phenomenon of moving revenues and spending into separate accounts .

The cost of the same level of public services increases each year with inflation. A two percent rate of price increase on a $2.3 billion budget requires an additional $46 million just to stay even. Adjusting for inflation, the level of general fund expenditures has clearly been falling during the 1990s.

If we adjust general fund spending not only to take account of inflation but also of population growth, we find that it has fallen each year in the last decade (since 1989) and now stands at about the same level as in 1975, when oil from the North Slope first began to flow.

Fiscal Policy Papers