Alaska\u2019s budget crisis has state leaders paying new attention to the Alaska Permanent Fund, and doing something that they\u2019ve never done before: Show up at the fund\u2019s Goldbelt Building headquarters for meetings of its board of trustees.<\/p>\n
The six-member board rotates its quarterly meetings around the state, usually holding them in the Anchorage, Fairbanks and Juneau population centers. But it\u2019s been unable to attract much attention, even with meetings scheduled in Juneau during the legislative session so elected officials can attend.<\/p>\n
It wasn\u2019t long ago that the board was even questioning whether the session meeting in Juneau made sense, given the lack of interest shown by legislators and others in attending.<\/p>\n
At the fund\u2019s Board of Trustees meeting in Juneau last week that all changed, with Gov. Bill Walker, Lt. Gov. Byron Mallott, Senate President Pete Kelly and House Speaker Bryce Edgmon and others all making appereances.<\/p>\n
Sitting in the Permanent Fund are tens of billions that would solve the state\u2019s budget problems, but only if state leaders can persuade the public to let them spend it.<\/p>\n
Walker used his appearance before the board to advocate for his proposal to use the Permanent Fund, instead of oil revenue, to fund state government.<\/p>\n
\u201cOur money makes significantly more revenue than our resources coming out of the ground, and we need to acknowledge that,\u201d Walker said.<\/p>\n
Walker told the trustees and staff that past state leaders, Gov. Jay Hammond and others, have put the state in an enviable financial position by saving for the future.<\/p>\n
\u201cPutting money aside was very wise,\u201d he said.<\/p>\n
And Alaskans have been very protective of the fund, which helped it to grow to its current $55 billion.<\/p>\n
Among the reasons for the fund\u2019s popularity, said Mallott, is the dividend, which provides Alaskans with a personal stake in the fund through an annual check.<\/p>\n
\u201cThe dividend was brought in to cement the loyalty of Alaskans to the fund,\u201d said Mallott, who as a former chair of the Board of Trustees, as well as a former executive director of the Alaska Permanent Fund Corporation, and knows as much about its history as anyone.<\/p>\n
That loyalty and dividend have made the fund what\u2019s known as the \u201cthird rail\u201d of Alaska politics, akin the electrified rail of some subway systems that can be fatal to touch. In Alaska, proposing to a raid on the Permanent Fund, and spending proposals are usually called \u201craids\u201d by opponents, can be politically dangerous.<\/p>\n
But Walker says Alaska has no choice.<\/p>\n
\u201cIt\u2019s time that we touched that third rail,\u201d he told the trustees, and told them they\u2019d be part of the state\u2019s fiscal solution.<\/p>\n
\u201cYou will be a huge part of making this shift in our economy going forward,\u201d he said.<\/p>\n
Walker kicked off the discussion of use of the Permanent Fund with a proposal to spend it, but got Alaskans\u2019 attention to the seriousness of the issue by vetoing about half of last year\u2019s dividend amount.<\/p>\n
He later acknowledged that he\u2019d done more than just touch the third rail.<\/p>\n
\u201cI\u2019ve been hugging it,\u201d he said.<\/p>\n
Walker and Mallott said the Permanent Fund was going to be just one of the parts of a solution to the state\u2019s fiscal gap, however.<\/p>\n
\u201cIt\u2019s very necessary that we have additional revenue sources, and of which we ourselves are responsible for paying for government services that are provided to us and our children,\u201d Mallott said.<\/p>\n
That\u2019s going to put new expectations on the fund and its managers when the fund\u2019s earnings are being counted on to pay for state services, he said.<\/p>\n
\u201cIt ain\u2019t going to be all about the dividend anymore,\u201d Mallott said.<\/p>\n
Later, Sen. Kelly met with the trustees, and offered some push back to the possibility of the trustees getting involved in political questions, highlighting possible differences between the legislative and executive branches about use of the fund.<\/p>\n
\u201cWe appreciate so much that this board, in particular, are not political agents,\u201d he said.<\/p>\n
The trustees, however, have gotten involved in the question of spending the fund in the past, including as a board endorsing former Gov. Frank Murkowski\u2019s \u201cpercent of market value\u201d approach for restructuring the fund more than a decade ago, during a previous fiscal crisis.<\/p>\n
High oil prices and a new oil tax system led to waning interest in Murkowski\u2019s POMV, but by the time that fiscal crisis had ended Murkowski has been voted out of offices, placing third in a Republican primary in 2006 that was won by Sarah Palin.<\/p>\n
Board chair Bill Moran indicated that he wanted others to deal with the political quesions, while the trustees focused on managing the permanent fund.<\/p>\n
\u201cWe\u2019re here for the people of Alaska,\u201d he said. \u201cGive us the charging orders and we\u2019ll move ahead with them,\u201d he said.<\/p>\n
<\/p>\n
<\/p>\n
\u2022 Pat Forgey is a freelance reporter based in Juneau.<\/b><\/p>\n
<\/p>\n
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