Budget transfers more than $10 billion to Permanent Fund’s protected principal

The finance conference committee meets on Saturday, June 7.

Juneau, Alaska (KINY) - A joint House and Senate committee in the Alaska Legislature today completed work on an operating budget. The proposal achieves historic budget cuts, resulting in a $600 million surplus and the smallest budget in 15 years.

The budget includes $4.3 billion in unrestricted general funds for agency and statewide operations – a reduction of $190 million over last year – and transfers more than $10 billion from the Permanent Fund’s earnings reserve account into the fund’s constitutionally protected corpus.

“This budget delivers significant reductions to government spending, keeps Alaskans safe, and protects the Permanent Fund for our kids and grandkids,” said Senator Bert Stedman, R-Sitka, co-chair of the Senate Finance Committee. “Locking up $10 billion-plus into the Permanent Fund’s constitutionally protected vault will keep it out of reach of future Legislatures. It will ensure our descendants always benefit from the resource wealth accumulated over the past 40 years.”

$19 billion of Alaska’s $65.3 billion Permanent Fund currently sits in an earnings reserve account that can be spent by the Legislature with a simple majority vote. To protect these funds, the Legislature’s proposed budget moves over $10 billion from the earnings reserve into the constitutionally protected corpus, which cannot be accessed without amending the state’s constitution.     

“The people of Alaska sent us here to make the hard decisions for the long-term benefit of all Alaskans, and that’s exactly what we intend to do,” said Senator Natasha von Imhof, R-Anchorage, co-chair of the Senate Finance Committee. “We locked away $10 billion into the Permanent Fund’s principal, taking more than half the earnings off the table, forcing all state spending to be in line with our annual revenues and protecting our savings accounts for emergencies.”

The Legislature’s proposed budget is the smallest since fiscal year 2005, adjusted for inflation and population.

“This budget delivers solid results for Alaska families and businesses,” said Senate President Cathy Giessel, R-Anchorage. “We managed to reverse government spending back 15 years – that’s a huge achievement.”

The operating budget now moves back to the House and Senate, where a vote is expected in each body on Monday, June 10.      

 

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