to Alaska Permanent Fund Formula
Change Would Protect Fund, Put Inflation-Proofing in Constitution
September 25, 2003
"Recognizing the obligation that the Permanent Fund must be there for future generations, just as it has been for us, I am pleased to endorse the Permanent Fund Trustees' recommendation," Murkowski said. "During my campaign for governor last year, I made the commitment that I would oppose any change to the Permanent Fund without a vote of the Alaska public. In keeping with that promise, I support this proposal, which can only be implemented by a constitutional amendment, and thus requires voter approval before it can take effect."
Currently, all income from the Permanent Fund is deposited into the state's general fund. The uses of that income are set in statute to cover inflation-proofing and dividends. Unallocated, excess income accumulates, and has been frequently deposited into the Permanent Fund by the Legislature in the past.
Under the Trustees' new proposal, referred to as a "percent of market value" or POMV approach, the income the fund generates will stay in the fund. Each year, the fund managers would deposit up to 5 percent of the entire value of the Permanent Fund into the general fund.
"This mechanism, in effect, becomes a spending limit on the fund, because no more than 5 percent could be appropriated each year," Murkowski said. "It also would serve to stabilize the performance of the fund, and therefore, the amount available for dividends."
"I want to hear Alaskans' views about such proposals, and I will be discussing the matter with knowledgeable Alaskans, including former governors. The most important piece of the plan for the future of the Permanent Fund is to adopt a percent of market value mechanism, which is all I am endorsing tonight."
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