First Measure Introduced to Address Structural Deficit
I have introduced my first piece of legislation: a House Joint Resolution to send a constitutional amendment to voters to fully protect the Alaska Permanent Fund in the Constitution. This critical measure--HJR 9--will prevent the Legislature from blowing a key part of the Permanent Fund in a spree.
Currently, the Permanent Fund is structured as two accounts: the Principal and the Earnings Reserve Account. The Alaska Constitution prohibits the spending of the Principal without a vote of the people. The Earnings Reserve Account, on the other hand, is entirely available for the Legislature to spend by a simple majority vote. The Legislature adopted statutes in 2018 that allow for the sustainable spending (or "draw") of Permanent Fund earnings, but those statutes could not stop the Legislature from passing budgets that spend Permanent fund earnings well beyond sustainable limits. Adoption of this proposed constitutional amendment would combine the Permanent Fund Earnings Reserve Account and the Permanent Fund Principal into a single constitutionally protected account that would guarantee sustainability. (The statutes adopted in 2018 established the "Percent of Market Value" ("POMV") system, so this proposed constitutional amendment is sometimes called "constitutionalizing POMV.")
Adopting this constitutional amendment will keep the Legislature from using the Permanent Fund Earnings Reserve Account as a piggy bank and thus ensure the health and growth of our state’s renewable financial resource. The Permanent Fund's Trustees have recommended this change since 2000. This constitutional amendment was also urged by the Fiscal Policy Working Group, a bipartisan and bicameral group of lawmakers who proposed a comprehensive solution for the State of Alaska's structural deficit in 2021.
If HJR 9 passes the Legislature and is approved by voters, the change will align the Permanent Fund with best practices in the financial industry. The constitutionally limited POMV draw will serve as a cap on revenues and an effective spending cap, limiting the amount of money that the Legislature can appropriate to no more than five percent of the Permanent Fund's total market value.
As a lifelong Alaskan who voted for the constitutional amendment establishing the Permanent Fund and helped create the Permanent Fund Dividend, I am proud to introduce this resolution to help provide a secure financial future for Alaska. HJR 9 does not address the size of the Permanent Fund Dividend or what specific percentage of the POMV draw is spent on state services like schools, roads, public safety, and public health, leaving those questions to be decided by other measures.
Rep. Alyse Galvin, I.-Anchorage, likes to call this measure the "Protect Our Permanent Fund Forever Act." She is one of nine cosponsors of HJR 9, meaning that it already has the support of one-quarter of the House. I presented this resolution to the House Special Committee on Ways and Means, and I will continue to work to send this common-sense fiscal solution to voters.
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Meetings in the District
Hello! Senator Löki Tobin and I are joining Anchorage Assembly members Christopher Constant and Dr. Daniel Volland to host a constituent Town Hall Meetings on Saturday, March 18th. The event will be held at the Pioneer School House (437 E. 3rd Ave.) from 10 to 11:00 am. This event will be a legislative update where we will hear and listen to people about their concerns and the best ways to address them. I look forward to seeing you there.
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Chris Mello, Government Hill constituent and Board Member of Blood Bank of Alaska; and Robert Scanlon, Chief Executive Officer of Blood Bank of Alaska
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Speaking on "Hello Alaska," A Podcast about Alaska
I had the opportunity to speak with Pat Race on the podcast "Hello Alaska." We talked about Alaska's structural deficit and our state's complicated fiscal politics. The podcast link is below under the name "The Just Right Gang."
Podcast with Hello Alaska and Rep. Cliff Groh
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Pat Race, Juneau Podcaster
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