Alaska Permanent Fund
The Alaska Permanent Fund is a constitutionally established permanent fund managed by a state-owned corporation, the Alaska Permanent Fund Corporation. It was established in Alaska in 1976 by Article 9, Section 15 of the Alaska State Constitution under Governor Jay Hammond and Attorney General Avrum Gross. From February 1976 until April 1980, the Department of Revenue Treasury Division managed the state's Permanent Fund assets, until, in 1980, the Alaska State Legislature created the APFC.
As of 2019, the fund was worth approximately $64 billion that has been funded by oil and mining revenues and has paid out an average of approximately $1,600 annually per resident. The main use for the fund's revenue has been to pay out the Permanent Fund Dividend, which many authors portray as the only example of a basic income in practice.
History
Shortly after the oil from Alaska's North Slope began flowing to market through the Trans-Alaska Pipeline System, the Permanent Fund was created by an amendment to the Alaska Constitution. It was designed to be an investment where at least 25% of the oil money would be put into a dedicated fund for future generations, who would no longer have oil as a resource. This does not mean the fund is solely funded by oil revenue. The Fund includes neither property taxes on oil company property nor income tax from oil corporations, so the minimum 25% deposit is closer to 11% if those sources were also considered. The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and future generations of Alaskans. Some 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. This belief spurred a desire to put some oil revenues out of direct political control.The Alaska Permanent Fund Corporation manages the assets of both the Permanent Fund and other state investments, but spending Fund income is up to the Legislature. 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. The Fund grew from an initial investment of $734,000 in 1977 to approximately $53.7 billion as of July 9, 2015. Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend.
The fund is a member of the International Forum of Sovereign Wealth Funds and has therefore signed up to the Santiago Principles on best practice in managing sovereign wealth funds. The Fund's current chief investment officer is Marcus Frampton.
In July 2015, execute director Michael J. Burns died having led the corporation since 2004.
Alaska Permanent Fund Corporation
The Alaska Permanent Fund Corporation is a government instrument of the State of Alaska created to manage and invest the assets of the Alaska Permanent Fund and other funds designated by law.Board of trustees
The Board of Trustees are governor-appointed- Jason Brune, chair, appointed in 2022 by Gov. Dunleavy
- Adam Crum, Vice-chair, appointed 2022 by Gov. Dunleavy
- Ryan Anderson, appointed 2023 by Gov. Dunleavy
- Craig Richards, appointed 2021 by Gov. Dunleavy
- Ethan Schutt, appointed 2020 by Gov. Dunleavy
- John Binkley, appointed 2025 by Gov Dunleavy
Permanent Fund Dividend
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. The PFD is calculated by the following steps:
- Add fund statutory net income from the current plus the previous four fiscal years.
- Multiply by 21%
- Divide by 2
- Subtract prior year obligations, expenses and PFD program operations
- Divide by the number of eligible applicants
Although the principal or corpus of the fund is constitutionally protected, income earned by the fund, like nearly all state income, is constitutionally defined as general fund money.
The first dividend plan would have paid Alaskans $50 for each year of residency up to 20 years, but the U.S. Supreme Court in disapproved the $50 per year formula as an invidious distinction burdening interstate travel. As a result, each qualified resident now receives the same annual amount, regardless of age or years of residency.
Payments from the fund are subject to federal income tax. Alaska has no state income tax, but part-year residents who leave the state may be taxed on them by their new state of residence.
The PFD is a Basic Income in the form of a resource dividend. Some researchers argue, "It has helped Alaska attain the highest economic equality of any state in the United States... And, seemingly unnoticed, it has provided unconditional cash assistance to needy Alaskans at a time when most states have scaled back aid and increased conditionality."
Annual individual payout
This is the fund's history of annual individual payouts, in USD.| Year | Dividend amount | Inflation-adjusted dividend amount | Notes |
| 1982 | 1,000.00 | ||
| 1983 | 386.15 | ||
| 1984 | 331.29 | ||
| 1985 | 404.00 | ||
| 1986 | 556.26 | ||
| 1987 | 708.19 | ||
| 1988 | 826.93 | ||
| 1989 | 873.16 | ||
| 1990 | 952.63 | ||
| 1991 | 931.34 | ||
| 1992 | 915.84 | ||
| 1993 | 949.46 | ||
| 1994 | 983.90 | ||
| 1995 | 990.30 | ||
| 1996 | 1,130.68 | ||
| 1997 | 1,296.54 | ||
| 1998 | 1,540.88 | ||
| 1999 | 1,769.84 | ||
| 2000 | 1,963.86 | ||
| 2001 | 1,850.28 | ||
| 2002 | 1,540.76 | ||
| 2003 | 1,107.56 | ||
| 2004 | 919.84 | ||
| 2005 | 845.76 | ||
| 2006 | 1,106.96 | ||
| 2007 | 1,654.00 | ||
| 2008 | 2,069.00 | Dividend came with a $1,200 Alaska Resource Rebate | |
| 2009 | 1,305.00 | ||
| 2010 | 1,281.00 | ||
| 2011 | 1,174.00 | ||
| 2012 | 878.00 | ||
| 2013 | 900.00 | ||
| 2014 | 1,884.00 | ||
| 2015 | 2,072.00 | ||
| 2016 | 1,022.00 | Dividend was estimated to be $2,052 but Governor Bill Walker's veto reduced it | |
| 2017 | 1,100.00 | Dividend was estimated to be over $2,300 however it was reduced by legislative action | |
| 2018 | 1,600.00 | Dividend was estimated to be $2,700 however it was reduced by legislative action | |
| 2019 | 1,606.00 | ||
| 2020 | 992.00 | ||
| 2021 | 1,114.00 | ||
| 2022 | 3,284.00 | $662 energy relief portion of dividend was deemed non-taxable | |
| 2023 | 1,312.00 | ||
| 2024 | 1,702.00 | ||
| 2025 | 1,000.00 | To be issued starting October 2nd |
Constitutional Budget Reserve
The Constitutional Budget Reserve is a companion fund to the Permanent Fund which was established in 1991 to ease problems from the variability of oil revenue, which vary depending upon the price of oil in the market. Deposits into the CBR consist of settlements of back taxes and other revenues owed to the state. Draws from the CBR into the general fund require a 3/4 vote of each house of the legislature and must be repaid. 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 size of the debt owed to the CBR has raised doubts over repayment. The CBR is based on the assumption that the general fund deficit will remain constant over time. Believing this to be mistaken, critics 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 recognized that the high vote requirement to spend CBR money had a perverse and unintended consequence. The high vote requirement was meant to ensure that draws from the CBR would be rare, but in fact such draws are common. Donley explained that the high vote requirement really empowers the minority party, who can then get what they want in a Christmas tree bill in exchange for their votes. Donley thus explains why both parties can and do use the higher voting rule requirement to more frequently spend from the CBR.