Financial returns have been less than needed to keep the fund’s spendable account full, potentially endangering the state budget.
The Alaska Permanent Fund isn’t running out of money, but it may be running out of money that can be spent.to beat inflation and the demands of the state treasury, the Permanent Fund’s spendable reserves may be exhausted within four years.
The trustees have directed corporation staff and outside experts to begin analyzing the situation and intend to finish a paper, likely with formal recommendations to the Legislature, later this year.recommended fixing the spendable account. In 2000, trustees went so far as to draft a proposed constitutional amendment. That was never adopted, and the problem has persisted.
“Inflation is like a thief in the night,” former Permanent Fund Corp. board chairman Elmer Rasmuson said in 1982. Lawmakers occasionally canceled the annual inflation-proofing payments in order to save money in the earnings reserve for the Permanent Fund dividend, but they always resumed. The same thing could happen again when the Legislature convenes in 2024, reducing the chances that the spendable account will run out of money soon — but it also creates a long-term problem.
“We’ve got to keep track of inflation, or you slowly erode your Permanent Fund. So you can skip or lighten up a year if you want. But you’ve got to keep up in the long run,” said Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee.But if the Legislature continues inflation-proofing at the expected rate, it will reduce the amount of money in the earnings reserve, increasing the chances of an eventual short-term fiscal crisis.
As envisioned, a constitutional amendment would combine the Permanent Fund’s two accounts into one. The state treasury would take a percentage of the fund’s overall value each year to pay for dividends and services, and legislators wouldn’t be able to spend more than that percentage without amending the constitution again.
“I think that’s a challenge in the political environment. All things involving the Permanent Fund are thrown into the bucket and talked about at the same time,” Stedman said. Oil prices right now are running higher than expected, and the Alaska Legislature could do something similar to New Mexico if trends continue, but it isn’t seen as likely.
At a special Oct. 30 meeting of the Alaska Permanent Fund Corp. Board of Trustees in Juneau, the board will consider changing the corporation’s strategic plan.
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Alaska Permanent Fund leaders may recommend constitutional amendment to fix fiscal problemFinancial returns have been less than needed to keep the fund’s spendable account full, potentially endangering the state budget
Weiterlesen »
University of Alaska Fairbanks spearheads $13.9 million study on climate change’s impact on Western AlaskaThe University of Alaska Fairbanks is spearheading a study that will look into climate change’s impact on Western Alaska.
Weiterlesen »
WeWork makes David Tolley permanent CEOCiara Linnane is MarketWatch's investing- and corporate-news editor. She is based in New York.
Weiterlesen »
Fiery Tundras and Plump Bears: Autumn’s Majesty on Alaska’s Kodiak IslandScience, Space and Technology News 2023
Weiterlesen »
Remnants of Typhoon Bolaven taking aim on Southeast AlaskaEx-Typhoon Bolaven is now an extratropical low, but the remnants of what was a beast of a storm just last week are still packing a pretty mean punch.
Weiterlesen »
Alaska Federation of Natives joins feds in case against state over subsistence rightsAFN argues that Alaska wants to ‘destroy’ the rural subsistence priority. Attorney General Treg Taylor said the group is mischaracterizing the issue as one that pits the state against Alaska Natives.
Weiterlesen »