Leg with Louie – May 4

The 30th AK State Legislature will likely run out its beleaguered tenure these final weeks by passing SB 26. This bill would institute a system of “Structured Draws” from the earnings of our nest egg, the $66 billion Permanent Fund. Passage of this proposal will cast into history the inviolable armor of the fund and will normalize the use of its earnings by future legislative bodies.  SB 26 sets the course for a new reliance on one main source of income for Alaska.

Living off of fund earnings. Under SB 26, Alaska (59 this year) will have deemed itself ready for early retirement, and will live out the rest of its days on the golf course, sipping iced tea laced with Metamucil until eternity calls. Under SB 26 Alaska will become a Trustafarian: one of those flagrant examples of carefreeness able to subsist entirely on investment earnings secured by the shrewd work of forebears into a Trust Fund. Perhaps Alaska will move to the Homer Spit for the summer, or Missoula, Montana or Eugene, Oregon etc. to kick some hacky-sack in a reefer cloud near its VW Vanagon.

If it passes, SB 26 will be a significant milestone in our history, though not an unexpected one.  

Once the legislature begins using the Earnings Reserve draw for government each year it will change our perception of the fiscal problem in Alaska, as well as our understanding of the purpose of the Permanent Fund.  Alaskans’ money will become State of Alaska money.

Keep an eye on this one. It is a big deal. Foes of the “Structured Draw” policy have reason to gird for a referendum battle.

Louie Flora, Government Affairs Director