The sudden drop in crude oil prices, nearing $80 per barrel on Oct. 15, has sent shudders through the state government. Ironically, the Department of Revenue has just started work on the Fiscal 2016 production and revenue forecast, which will be published in late November or early December. The drop in oil prices, which may last a while, pundits say, would undermine current FY 2015 revenues and push the $1.4 billion deficit that was projected at a $104/barrel average higher. In previous years a rule-of-thumb was that each $1 drop in oil prices, if it stayed low for the year, cost the treasury $50 million. Revenue officials say that’s more complicated now with the new SB-21 oil tax in effect. We’ll have to wait a few weeks until the revenue forecast to glimpse the future. (More on this in our upcoming Alaska Economic Report).