Entering its third full week of the session, Alaska’s Legislature continues to look at a variety of spending cuts and revenue options.
On February 2, the Senate Finance Committee heard SB 21, a proposal of Sen. Bert Stedman to restructure how Permanent Fund earnings are appropriated. Currently the $56B in the fund are constitutionally protected, but the bill proposes further limiting the amount of money that can be withdrawn from the principal to 4.5 percent of market value, based on a rolling five-year average.
That rate falls within the five-percent range the Alaska Permanent Fund Corporation recommends as “sustainable” – withdrawing more than that risks depleting the fund principal. Stedman expressed his concern that, out of fiscal need, legislators may end up raiding the fund in such an unsustainable way.
“We have to protect it from ourselves. We are the appropriators,” Stedman testified to the committee.
About half of that 4.5 percent would go toward PF dividend payments, with the rest either going to fund core public services, increasing the dividend, or reinvesting into the fund principal.
Chairing the committee, Sen. Mike Dunleavy questioned whether a constitutional amendment would be more suitable for the proposed plan, to which Stedman responded timing was an issue. The state is facing an estimated $3.5B spending deficit this year, which will exhaust available savings within the next year and a half if allowed to continue.
After the hearing, SB 21 remains in committee, and has not yet been scheduled for a further teleconference.
On the House side, on January 30, Rep. Dan Ortiz proposed House Joint Resolution 9, which would urge the federal government to continue working with its Canadian counterpart to investigate the long-term, regionwide downstream effects of mines either operating or proposed in British Columbia. Specifically the resolution wants to support preservation of the Stikine, Taku and Unuk rivers, which are shared transboundary waters and significant to the region’s fishing and culture.
The resolution has been referred to the House Special Committee on Fisheries and the Resource Committee after first reading.
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