Permanent Fund

Permanent Fund
The Alaska Permanent Fund is a constitutionally authorized appropriation of oil revenues, established by voters in 1976 to manage a surplus in state petroleum revenues from oil, largely in anticipation of the then recently constructed Trans-Alaska Pipeline System. The fund was originally proposed by Governor Keith Miller on the eve of the 1969 Prudhoe Bay lease sale, out of fear that the legislature would spend the entire proceeds of the sale (which amounted to $900 million) at once. It was later championed by Governor Jay Hammond and Kenai state representative Hugh Malone. It has served as an attractive political prospect ever since, diverting revenues which would normally be deposited into the general fund.

The Alaska Constitution was written so as to discourage dedicating state funds for a particular purpose. The Permanent Fund has become the rare exception to this, mostly due to the political climate of distrust existing during the time of its creation. From its initial principal of $734,000, the fund has grown to $50 billion as a result of oil royalties and capital investment programs.[89] Most if not all the principal is invested conservatively outside Alaska. This has led to frequent calls by Alaskan politicians for the Fund to make investments within Alaska, though such a stance has never gained momentum.

Starting in 1982, dividends from the fund’s annual growth have been paid out each year to eligible Alaskans, ranging from an initial $1,000 in 1982 (equal to three years’ payout, as the distribution of payments was held up in a lawsuit over the distribution scheme) to $3,269 in 2008 (which included a one-time $1,200 “Resource Rebate”). Every year, the state legislature takes out 8% from the earnings, puts 3% back into the principal for inflation proofing, and the remaining 5% is distributed to all qualifying Alaskans. To qualify for the Permanent Fund Dividend, one must have lived in the state for a minimum of 12 months, maintain constant residency subject to allowable absences,[90] and not be subject to court judgments or criminal convictions which fall under various disqualifying classifications or may subject the payment amount to civil garnishment.