Proposal could restructure Permanent Fund
House Joint Resolution 9 would combine the two accounts comprising the Permanent Fund
ANCHORAGE, Alaska (KTUU) - A new proposed amendment to the Alaska Constitution could restructure the Permanent Fund.
Rep. Cliff Groh of Anchorage alongside lawmakers from both sides of the aisle announced the proposal of House Joint Resolution 9, a constitutional amendment they hope will “fully protect the Alaska Permanent Fund in the Constitution.”
If the amendment passes, then both accounts that comprise the Permanent Fund will be subject to constraints limiting how much of the account balance can be spent.
A driving force behind the proposal, Groh worked in the legislature in the 1980s helping author the laws currently governing the Permanent Fund.
Rep. Groh emphasized that under current rules, lawmakers could spend the entire Permanent Fund earnings with a simple majority vote. This amendment would combine the two accounts that constitute the Permanent Fund — the earnings reserve and the principal — to create a single constitutionally protected account. It would restrict lawmakers from spending no more than 5% of the market value of the account using a percent of market value system.
As to whether the amendment will raise or lower PFD checks, Rep. Groh said, “This proposed constitutional amendment is agnostic on that question.”
Rep. Groh drives a sharp distinction between PFD checks distributed to Alaska state residents and the proposed amendment.
“While I personally am in favor of enshrining the rights of the Permanent Fund dividend in the constitution, this constitutional amendment would address a very different question, which is, shall the Legislature be able to overspend, or overdraw from the Permanent Fund?”
In a press release, Rep. Jesse Sumner of Wasilla offered an illustrative metaphor to stress the need for regulations on the Permanent Fund.
“We can’t leave a critical part of the Permanent Fund out there looking like a tempting piggy bank for the Legislature,” Sumner said.
The resolution requires approval by two-thirds of the House and the Senate, whereupon it will not be subject to veto by the governor but will be placed on the next ballot.
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