Risks integrity of Permanent Fund for future generations

 

SITKA – Gov. Mike Dunleavy on Monday line-item vetoed the $5.4 billion transfer from the Alaska Permanent Fund’s Earnings Reserve Account to the Permanent Fund’s Principal.

 

“Governor Dunleavy’s decision to veto the legislature’s $5.4 billion deposit into the principal of the Permanent Fund enables irresponsible budgeting and risks the integrity of the Permanent Fund for future generations of Alaskans,” commented Rep. Jonathan Kreiss-Tomkins (D-Sitka), sponsor of House Bill 31

 

Beginning in 2018, the Alaska Legislature has moved aggressively to protect the assets of the Alaska Permanent Fund for future generations, by transferring funds from the Earnings Reserve Account (“ERA”) of the Permanent Fund (current balance: $14.4 billion), which is available for appropriation by simple majority vote, to the Principal of the Alaska Permanent Fund (current balance: $51.8 billion), which is constitutionally protected from appropriation for the benefit of future generations.

Year

Bill

Transfer Amount

Action

2018

HB 286 (operating budget amendment)

$5.5 billion

No vote

2019

HB 31

$5.5 billion; amended to $8 billion in House Finance Committee

Passed through House Finance

2019

HB 39

$9.4 billion

Passed by legislature and transmitted to governor. Governor Dunleavy  vetoes $5.4B of the $9.4B transfer; $4B is successfully transferred June 28, 2019.

2019

HB 2001

$5.4 billion

Passed by legislature July 2019 and transmitted to governor. Governor Dunleavy vetoes all $5.4B (again) August 19, 2019

 

The urge to spend the easily accessible cash in the Earnings Reserve Account has increasingly been in the forefront of legislative deliberation. On July 24, House Minority Republicans introduced an amendment to HB 2001 that would’ve unsustainably spent down the Permanent Fund — effectively, a tax on future generations — in order to fund a $3,000 PFD. However, the amendment failed by a 20-11 vote.

 

On July 28, by a 6-5 vote, the Senate Finance Committee passed an amendment to unsustainably spend down the ERA of the Alaska Permanent Fund to fund a $3,000 PFD. This action was reversed on the Senate floor one day later, 11-9.

 

The need to protect the real value of the Alaska Permanent Fund is even more urgent than when Rep. Kreiss-Tomkins introduced HB 31 at the start of the 2019 legislative session.

 

Rep. Kreiss-Tomkins is also the sponsor of HJR 18, and at 30, is the legislature’s second youngest member. He commented: “This year’s proposed deposits into the Principal of the Permanent Fund were just the beginning of the needed work to make the Permanent Fund truly permanent. Ultimately, the all, and not just part, of the Permanent Fund must be constitutionally protected from unsustainable spending proposals to ensure that generations of Alaskans well beyond my own can benefit from Alaska’s resource wealth, just as our current generations have benefited.”

CONTACT
Kevin McGowan
Office of Rep. Jonathan Kreiss-Tomkins
(907) 465-3306

Kevin.McGowan@akleg.gov