Alaska Permanent Fund

The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and future generations of Alaskans.

also believed that the legislature too quickly and too inefficiently spent the $900 million bonus the state got in 1969 after leasing out the oil fields.

[citation needed] The corporation is to manage for maximum prudent return, and not—as some Alaskans at first wanted—as a development bank for in-state projects.

[9] Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years.

However, an individual is not eligible for a PFD for a dividend year if: The amount of each payment is based upon a five-year average of the Permanent Fund's performance and varies widely depending on the stock market and many other factors.

[21] In 2008, Governor Sarah Palin signed Senate Bill 4002[22] that used revenues generated from the state's natural resources and provided a one-time special payment of $1,200 to every Alaskan eligible for the PFD.

To date, the general fund has amassed a debt of approximately $4 billion to the CBR to maintain a stable level of public spending.

The CBR is based on the assumption that the general fund deficit will remain constant over time (allowing paybacks to balance draws).

allege the state uses resources from the CBR to avoid reducing the budget, acknowledging debt, or increasing taxes.

According to them, falling oil revenues and growing spending requirements will leave paybacks consistently lower than draws, causing the CBR to fail.

Former state senator Dave Donley (R-Anchorage) recognized that the high vote requirement to spend CBR money (¾ of each house) had a perverse and unintended consequence.

Indeed, in 1999, with oil prices going as low as $9 per barrel and Alaska's oil consultant Daniel Yergin forecasting low prices "for the foreseeable future", the State put an advisory vote before Alaskans, asking if government could spend "some" part of Permanent Fund earning for government purposes.

(Oil prices rose dramatically, starting about two weeks after Yergin's prediction, to above $60 per barrel, though the quantity produced continues to fall.)

That is, legislators willing to appropriate the Fund's annual earnings are constrained by the high political costs of any measures leading to a decrease in the public's dividend.

In 2000,[35] the APFC Board of Trustees proposed changing the Permanent Fund's management system to a Percent of Market Value (PoMV) approach which would require an amendment to the state constitution.

[36] This price shift caused an 80 percent decline in state revenue[37] and resulted in a multibillion-dollar budget gap.

Estimated costs comprise a very small portion of the total payment, suggesting that crime-related concerns of a universal cash transfer program may be unwarranted.