Which industry is the largest source of government revenue in Alaska?

• A. Fisheries
• B. Tourism
• C. Oil and Gas
• D. Real Estate

Answer: (C)

Oil and gas revenues are the backbone of Alaska’s government finances. The state earns most of its unrestricted General Fund money from royalties paid by oil producers, severance taxes on extracted oil, and corporate income taxes tied to oil development. This money has long dominated the budget, helping fund programs and the Alaska Permanent Fund that provides residents with annual dividends.

Fisheries and tourism are important to Alaska’s economy and communities, but they do not contribute as large and stable a stream of revenue to the state budget as oil and gas. Real estate plays a smaller role in state revenue overall. That concentration of revenue in oil and gas is why this industry is the largest source of government funding in Alaska.