Gov. not raiding fund

Posted: Wednesday, May 05, 2004

In response to the inflammatory and misleading letter from Erik Lie-Nelsen in Sunday's edition of the Empire, let me assure your readers that the governor and the Legislature are not "raiding" the permanent fund.

The POMV or endowment concept is a management tool which has been advocated by the Alaska Permanent Fund Board of Trustees since August of 2000. It manages the fund just like hundreds of other endowment funds are managed, including Anchorage and Sitka. It provides a 5 percent constitutional limit on how much money the Legislature could remove from the fund.

Legislatures since 1976 have had the authority to spend as much of the earnings reserve portion of the permanent fund as they desired. Yet they have bent over backwards to be generous to the fund, depositing more than $7 billion extra into it, and inflation-proofing it for another $7 billion. That's half of all the money that is in the fund, which means your dividends have been substantially bigger than they would have been, notwithstanding the Legislature's ability to spend the earnings reserve. Finally, if the endowment concept had been in place today, each Alaskan would receive $80 more in his dividend check this October than would be the case under the status quo.

If the current proposal is passed and results in $1,000 dividends, how is that a tax on the poor and politically weak?

Moreover, what about the need to maintain public services? For example, where does the money come from to pay for education? It comes from what would be left over after paying dividends - this year more than $900 million that sits in the earnings reserve.

Gov. Murkowski is not raiding the permanent fund. He has a plan for how the permanent fund can finally be put to the use for which it was intended, the fund is protected, and still pays a $1,000 dividend. All Alaskans should support this effort.

Bill Corbus

Alaska Department of Revenue commissioner



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