A state consultant told Alaska lawmakers Wednesday the Permanent Fund had a strong year, but one state senator said how much the dividend will be valued was separate from the fund’s performance.
JUNEAU , Alaska - A state consultant told Alaska lawmakers Wednesday the Permanent Fund had a strong year, but one state senator said how much the dividend will be valued was separate from the fund’s performance.
“The dividend is a separate issue with what we’re talking about today,” Sen. Bert Stedman, R-Sitka and Senate Finance Co-Chair told Alaska’s News Source as he left the hearing. ”We’re talking about the survival and viability of the permanent fund.” The dividend was mentioned sparingly throughout the 2-hour hearing, largely in reference to how the dividend used to be calculated and appropriated. The fund’s strong performance comes down to its diversified nature, and the tempered draws lawmakers have taken, said Greg Allen, CEO of Callan Associates, an investment consultant for the Permanent Fund, during the hearing. “The permanent fund in the United States is like a miracle,” Allan said. “This did not happen in any other state. Nothing close to this. The amount of savings that you have per citizen here, it’s fantastic.”In statute, lawmakers are essentially only allowed to draw 5% of the permanent fund annually based on its market value over the past several years each year to fund programs, or what many Alaskans watch closely, the dividend. If they wanted to, they could pull out more from the earnings reserve with a simple majority in both bodies and the governor’s signature, but lawmakers and the consultant said that reality wasn’t advisable for the fund’s longevity. “I’ve always thought that 5% is too high,” Stedman said. “I’m looking forward to the discussion with all the committee members to see what their individual thoughts are.” There are pros and cons to spending the full 5% draw, the Callan presentation showed. The more left in the fund, the more it can grow but the less the state uses. The more taken out, the less value the fund has but the state has a greater ability to spend.That would leave between $2.96 billion — if the PFD reaches $1,400 — and $3.32 billion for other state spending if the PFD comes in at $800. If Gov. Dunleavy’s proposed full statutory dividend of $3,650 were approved, it would cost the state $2.16 billion and leave $1.6 billion for other state spending. Lawmakers are weighing those numbers against declining oil revenue, which has reduced what the state can spend outside of the permanent fund — thus the need to draw more funding out of the fund.Data presented at the hearing showed that over the past five years, the average draw has been at about 4.5%, meaning .5% of what they’re able to pull out remains in the permanent fund. “When you have these big global financial events, the odds of beating inflation plus 5 go way down,” Allen said. “There’s going to be a period in our future where the permanent fund, which providesThough it still leaves a little to be held and accrue more value, 4.5% is more than double the average in years past, which was only about a 2.3% draw before 2019. “Kudos to everyone who managed to not spend that money because it’s really coming in handy now,” Allen said. Before the committee is a push to restrict how much lawmakers can draw. One avenue is to constitutionalize the draw, eliminating lawmakers’ ability to exceed the cap by the legislature and the governor’s whim. That would be a potentially daunting undertaking to pass a constitutional amendment. Two-thirds of both chambers are needed to approve a proposal and then it goes to the people of Alaska, where a simple majority is required to amend the state’s founding document.Sen. Lyman Hoffman, D-Bethel also co-chair of the committee, and Stedman both said they were interested in a proposal putting the limit at 4.5%. There is a constitutional amendment presentedMother, 2 minors, deported from Alaska to Mexico by ICE overnight, husband says ‘I heard her screaming’: Rapid deportation case may signal change of pace in Alaska immigration proceedings‘It was incredibly swift’: Why an Alaska family was removed to Mexico this week, one son sent to Tacoma ICE facility FridayTwo years after two men went missing on overturned boat, driver of boat arrestedBreakdown of the 2026 Anchorage election ballot Former chief of staff for state senator makes first court appearance on child sex trafficking charges
Permanent Fund Anchorage Dividend Juneau Callan Associates Alaska Constitution Rep. Andy Josephson Mike Dunleavy
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