If you happen across some information about Alaska’s current financial situation, you probably get the impression that we are in dire straights. When oil prices crashed 77% in late 2014, the State’s oil revenues collapsed – leaving a gaping hole in the budget. By all accounts, we’ve been deficit spending ever since. But that is[…]
I wrote a piece a few weeks back about how Alaska’s current investment earnings laws don’t work together. They create a paradox in which the budget deficit gets smaller if investment earnings get worse. In the extreme, we could balance the budget by losing $7 billion in the stock market. Because that makes absolutely no[…]
There was a little bit of a sparring match during the PFD working group meeting last week. Senators Hughes and Stedman seemed to have different impressions about the Percent of Market Value (POMV) approach to managing the Permanent Fund. But, the fireworks came in the form of a misunderstanding about how inflation proofing works. Let’s[…]
Over the last five years, Alaska has pivoted from being a Petro-state to a Trust Fund kid. Thanks to years of saving and re-investing a quarter of our oil royalties, we now have over $66 billion in the bank. And, those billions of dollars go to work every day, bringing billions of friends home to[…]
This week’s article is inspired by a question that came up during the Bicameral Working Group on the PFD hearing a few days ago. It centers on a portion of the PFD calculation. Here’s the gist: Under the current law, the sum of the earnings over the last five years is multiplied by 21% in[…]