Anchorage cautiously optimistic for 2015.

• Author: Sullivan, Dan
• Position: SPECIAL SECTION: Economic Outlook

With the price of oil dipping below $70 per barrel, there is justifiable concern statewide about the future of our economy. The state budget is an estimated $3 billion in deficit, requiring the new administration and the Legislature to make some very tough spending decisions, and once again, the question of new taxes will be on the table.

Local governments, Anchorage included, are facing the prospect of revenue sharing being reduced or eliminated altogether. For Anchorage, that represents approximately $15 million in revenue. Other state funded programs will certainly see reductions, which in some cases will transfer the burden to the local communities.

Fortunately, Anchorage is well positioned to weather this latest economic storm. For the past five years, my administration has worked diligently to become a more efficient and cost effective government, without reducing essential services. An example is our 2015 budget that was recently approved by the Anchorage Assembly. Amazingly, the budget is $3 million less than the 2014 budget, and continues our efforts to contain the unsustainable spending and property tax growth of the previous administration.

Our frugal management has allowed us to establish significant operating and emergency reserve funds that can help us through downturns. Our finance team has taken advantage of strategic debt refinancing and has invested our trust fund wisely to earn top returns. This overall financial performance has earned Anchorage an AAA bond rating from Standard and Poor's, the highest rating a city can receive. Of the 4,000 cities rated by S&P, only a few hundred have an AAA rating, placing Anchorage into truly elite company.

Anchorage's diverse economy helped us weather the 2008 Great Recession and will help us remain stable in the years ahead. Tourism in Anchorage had a record setting year in 2014 and the outlook is good for 2015.

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